First awards on horizon as framework comes together
Doubts over Kuwaits ability to move forward with public private partnership (PPP) projects have grown as delays on the Kuwait Authority for Partnership Project (KAPP) programme extended in 2016.
As of November three major projects worth $6bn are under technical evaluation, including the flagship Al-Zour North 2 independent power & water project. A fourth, the Kuwait schools development programme, has moved into financial evaluation.
If contract awards happen as planned in the first quarter of 2017, Kuwait will have astounded its critics to become a trailblazer for regional PPP. The schools project would be the first PPP of its type in the Middle East, while other countries have also struggled to procure the waste and wastewater projects Kuwait is attempting under a PPP structure.
Progress is being made on bringing stakeholders such as the Fatwa and Legislation Department on board, and creating standardised templates for KAPPs projects. This will ease the financing process, encourage developers to bid and speed up procurement.
A number of challenges are ahead of KAPP as it moves towards awarding projects. They include Kuwaits usual suspects, the National Assembly and the State Audit Bureau, which often find fault with project decisions.
They also need to maintain confidence and interest in the developer, investor and financier market, even as other GCC countries begin to compete for attention. This will require progress on the next round of PPP projects, most notably the rail schemes which are facing serious delays.
KAPP also needs to deepen the market by offering a transparent pipeline of future projects to reassure investors that Kuwait is a PPP market worth cracking.
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