Kuwait awards airport contract

30 May 2016

Council of Ministers approves award of $4.3bn deal to Turkish/local team

Kuwait’s Ministry of Public Works (MPW) has awarded the $4.3bn contract to build a second terminal at Kuwait International airport (KIA) to a team of Turkey’s Limak Holding and the local Kharafi National on 30 May.

The country’s Council of Ministers approved MPW’s request for the contract award in early May.

The airport scheme has been tendered twice. The team of Limak and Kharafi submitted the lowest commercial offer in both cases, offering $4.3bn for the contract during the second round of the tendering process.

While the evaluation of technical and commercial offers were completed in August 2015, the deal has undergone a series of reviews due to allegations made by MPs regarding financial and administrative irregularities during the tendering process.

The contract award was first put on hold upon the the resignation of former minister of public works Ahmad al-Jassar in September 2015.

Stiff opposition from some MPs with regard to the award saw newly appointed Minister of Public Works Ali al-Omair, who replaced Al-Jassar in late 2015, sending the deal for review in January to the State Audit Bureau, which rejected the contract.

Al-Omair then sent the deal to the Council of Ministers in April, and the body granted the approval in early May.

Terminal 2 is a key component of Kuwait’s masterplan to bring its airport capacity to 50 million passengers by 2048. The existing KIA has been operating beyond its capacity. It processed 10.2 million passengers in 2015, which is more than twice its design capacity.

Terminal 2 will have the capacity to handle 25 million passengers a year and feature 51 gates and stands. The construction work is expected to last 6 years.

The total investment required in the first phase of developing KIA is expected to reach $6bn. Apart from Terminal 2, a contract for a temporary passenger support terminal, with a capacity of 4.5 million passengers, is currently awaiting final approval. The temporary terminal is designed to accommodate additional air passenger traffic in the intervening years prior to the completion of Terminal 2 by 2022.

A joint venture of Turkey’s Cengiz Insaat Sanayi Ve Ticareta and the local First Kuwaiti General Trading & Contracting (FKTC) submitted a low bid of KD52.8m ($174m) for the passenger support terminal deal.

In addition to the new terminal, other schemes include the widening and construction of new runways, enhancing control tower facilities and building new cargo facilities.

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