Kuwait cancels PPP hospital project

25 November 2013

Project to build New Physical Medicine and Rehabilitation hospital is suspended

Kuwait’s Partnership Technical Bureau (PTB) has announced that it has cancelled the public-private partnership (PPP) project to build the New Physical Medicine and Rehabilitation hospital. No reason was given for the cancellation, although the PTB said that due to its decision, the procurement process ‘will not be progressed’.

In 2012, the PTB had invited companies to prequalify to design, build, finance and operate the hospital. The planned hospital, which was to be a collaboration between the PTB and the Health Ministry, was to be located on the site of the existing physical medicine and rehabilitation hospital in the Al-Andalus area of Kuwait city. Plans for the hospital were for it to contain 500 beds and cover a total area of 271,800 square metres.

Under the proposed PPP agreement, Kuwait’s Health Ministry was to enter into a contract to operate the hospital for approximately 25 years. In March 2011, UK consultancy firm PricewaterhouseCoopers (PwC) was awarded a ($1.8m) transaction advisory contract for the hospital project.

The move is the latest blow to Kuwait’s development plans, which hinge on attracting greater private sector involvement in the economy. The country’s first public-private partnership, the Al-Zour North independent power and water scheme, has yet to achieve financial completion almost a year after the project was first mooted due to political opposition.

Four other large privatisation projects in Kuwait were also put on hold earlier this year after the Communications Ministry ordered a review of the plans while it considered bringing them back under government ownership.

The schemes include the PPPs to develop the Kuwait rail and metro projects, and PPP contracts to part-privatise the Public Post Office and communications network. The Partnerships Technical Bureau, the government body created to push forward Kuwait’s PPP plans, has stopped work on the four schemes while the Communications Ministry reviews whether they should be procured as PPPs or developed through direct government procurement. Advisers working with the PTB on the four schemes also were suspended.

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