Kuwait’s Partnerships Technical Bureau (PTB) has rejected a bid led by Saudi Arabia’s Acwa Power to build the country’s first independent water and power project (IWPP) at Al-Zour North.

Five bids were submitted in September 2011. The PTB conducted technical evaluations of the bidders. Only those bids deemed technically compliant will have their commercial offers opened.

Four groups have been invited to a commercial bid opening on 5 February:

• Malakoff International (Malaysia), SK Group (South Korea) and National Industries Group (Kuwait)
• Mitsui (Japan), Kharafi Group (Kuwait) and Ahmadiah (Kuwait)
• Marubeni (Japan) and Alghanim (Kuwait)
• Sumitomo, IP-GDF Suez (UK/France) and AH Sagar & Brother Group (Kuwait)

The bid submitted by Acwa Power, Kuwait’s GIC, and South Korea’s Samsung C&T has been rejected. While the PTB has not yet stated the reasons behind the rejection, it is believed that the Acwa Power bid may have been deemed non-compliant due to the structure of its plans for the desalination component of the project.

The group proposed the use of large multi-effect desalination (MED) and reverse osmosis (RO) desalination units manufactured by Japan’s Sasakura. However, Sasakura has only commissioned smaller units for previous projects. The PTB’s bid documents specified that the proposed large-sized technology must have been used in previous projects.

After the commercial bids from the other four groups are opened and assessed, a selection will be made. The winning developer group will design, finance, build, operate and maintain the plant, which will have a capacity of 1,500MW of power and 102-107 million gallons a day (g/d) of desalinated water.

The project is required to successfully achieve early power of at least 200MW by no later than 31 December 2013. At least 400MW is to come online no later than 15 February 2014 and at least 600MW by 31 March 2014. The project is to enter commercial operation by 31 May 2015.

The project will use natural gas as its main fuel and gas oil as back-up fuel. Gas and gas oil will be provided by the Electricity and Water Ministry. The desalination plant will use either a 100 per cent thermal process or a hybrid process. In the case of a hybrid solution, the capacity of the reverse osmosis plant is not to exceed 25 per cent of the total desalination capacity.

A special-purpose vehicle will be established as a Kuwaiti Public Joint Stock Company, with 40 per cent owned by the successful bidder. The remainder will be held by a combination of Kuwaiti public entities directly and Kuwaiti nationals.

Kuwait has adopted the IWPP model for all its future power and water schemes over 500MW and is already planning four more projects at the Al-Zour North site.

Phase two is to have the same capacity in power and water as phase one. Phase three will add 800MW in power capacity and 50 million g/d, phase four will add 1,000MW and phase five will add 25 million g/d of water capacity to the site. Phases one and two are expected to be fired on natural gas with gas oil as a back-up fuel.

The PTB is advised by France’s BNP Paribas, US law firm Chadbourne & Parke and Germany’s Lahmeyer International.