Kuwait must deliver on PPP programme

10 February 2015

Little progress made in the six years since the country established a public-private partnership body to develop major infrastructure projects

Kuwait’s newly restructured public-private partnership (PPP) body’s move to initiate the prequalification process for its next two independent water and power projects (IWPPs) will have been welcomed by both Kuwaiti citizens and the international utilities and project finance sectors.

With Kuwait’s population continuing to grow at rapid pace, and much of its utility infrastructure in need to upgrading, progress with these major power and water schemes is vital.

The Ministry of Electricity and Water (MEW) predicts demand for both power and water will almost double by 2022, and time is running out to build the planned projects in time.

The country’s maiden PPP project, the Al-Zour North 1 IWPP, had been viewed as the country’s pathfinder scheme. It was often stated that once the tricky initial project had been negotiated, the others would follow seamlessly. However, with the signing of the final Al-Zour North agreements in December 2013, more than five years after the country’s PPP structure was established, the government went back to the drawing board to build a more efficient and decisive structure.

While the country’s reformed PPP body, the Kuwait Authority for Public Partnerships (KAPP), has raised optimism about Kuwait finally delivering on its major PPP infrastructure programme, the new body has a stiff challenge ahead.

Although the utility sector may have the most pressing needs, KAPP has also been mandated to develop numerous other important infrastructure schemes such as the Umm al-Hayman wastewater treatment plant and the planned metro.

With oil prices having dropped to their lowest point since 2009, the time is perfect for Kuwait to welcome the private sector on board to provide the significant capital expenditure required. Despite having at one point in history having led the Gulf’s development, since the first Gulf war the country has fallen significantly behind many of its GCC neighbours in terms of industrial and infrastructure investment, despite holding the world’s sixth-largest proven oil reserves.  

To ensure that the needs of its population are met and the country can develop and diversify its economy, Kuwait must deliver on its PPP programme without fail.

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