Kuwait reignites PPP programme

18 May 2015

Public-private partnership programme has faced significant delays

  • Kuwait’s reformed PPP body restarts procurement process for three major utilities projects
  • Country’s PPP law was amended in 2014, following award of first independent water and power project
  • Kuwait’s PPP programme has struggled since it was launched in 2008, with only one scheme having been awarded to date

Kuwait has reignited its stalling public-private partnership (PPP) programme in 2015, with the newly formed Kuwait Authority for Partnership Projects (KAPP) restarting the procurement process for three long-delayed schemes.

KAPP, which has replaced the Partnerships Technical Bureau (PTB) as Kuwait’s PPP body, has started to move forward with three major utility projects since the beginning of May, all of which have been in the pipeline for several years. Progress with the schemes follows the request for qualification for the Al-Zour North 2 and Al-Khiran 1 independent water and power projects (IWPPs) earlier this year.

Those active or interested in Kuwait’s projects sector hope the recently reformed PPP body and amendments to the country’s PPP and IWPP laws will facilitate swifter progress with the country’s ambitious pipeline of PPP schemes.

Welcome news

“It is welcome news that the projects are starting to move,” says a source at a major international developer. “Kuwait is one of our key target markets and there are lots of schemes planned. The PPP programme has been very slow so far, but hopefully now the structural changes and legal changes will make things go faster.”

The first of the planned projects to be restarted is the Umm al-Hayman wastewater treatment plant, with KAPP reopening the prequalification process for the facility. It will have an initial treatment capacity of 500,000 cubic metres a day (cm/d). Six groups were prequalified for the scheme in 2012, but no further progress was made until now.

The plant will be designed so that it can be expanded to 700,000 cm/d in the future. Companies have until 9 July to submit prequalification entries for the contract. KAPP is developing the project in collaboration with the Ministry of Public Works (MPW).

Kabd project

The second project for which KAPP has restarted the prequalification process is the Kabd Municipality solid waste scheme, a waste-to-energy project that is planned to treat up to half of Kuwait’s municipal waste. The PTB had originally invited companies to prequalify for the scheme in March 2014, but after no tangible progress, KAPP has reinitiated the qualification process.

The proposed facility will be located in the Kabd area, about 25 kilometres from Kuwait City, and will occupy an area of about 500,000 square metres. The project is planned to have an initial capacity of 3,275 tonnes a day (t/d).

The third project that KAPP has brought back to life is the Al-Abdaliyah integrated solar combined-cycle (ISCC) power project, which will run on a combination of solar power and gas. Companies have until 30 June to submit prequalification entries for the ISCC plant, which will contain a 60MW solar component and have a total capacity of 280MW.

KAPP, in collaboration with the Ministry of Electricity & Water (MEW), will oversee the creation of a joint stock project company, which will build, operate and transfer the project for an investment period of 25 years. The UK’s HSBC was appointed as financial consultant for the scheme in September 2013.

The decision to reform Kuwait’s PPP body and update legislation covering the transactions followed the award of the contract for the country’s first IWPP, Al-Zour North 1, in December 2013, which suffered numerous delays during the tendering and procurement process. In 2014, parliament approved amendments to the PPP and IWPP laws, and the executive regulations for the new PPP were published in March 2015.

Due to the rapidly growing demand for power and water services emanating from a population increasing at a rate of about 3 per cent a year, KAPP’s initial focus will be on major utilities projects planned to meet forecast demand and prevent a supply shortfall. The organisation is also planning to oversee the development of major metro, rail and tourism projects through partnerships with the private sector.

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