Kuwait to make airport award decision in March

09 March 2016

Public Works Minister considering options to obtain green light for contract award

Kuwait Public Works Minister Ali al-Omair is expected to make a decision during March on whether to obtain approval for the award of the Kuwait International Airport’s Terminal 2 contract.

“The minister will decide whether to send the contract for a second review to the State Audit Bureau, which rejected the contract on its first review, or to send it directly to the Ministers Council,” a source familiar with the project tells MEED.

Sending the contract directly to the Ministers Council instead of sending it for a second review to the State Bureau, however, is considered to be more practical.

”If the contract is rejected by the Audit Bureau on its second review, Al-Omair will still then have to send the contract to the Ministers Council for another review anyway,” says the source.

The Audit Bureau is understood to have cited the project’s weakness in terms of structural planning and design, in addition to high cost, in rejecting the contract during the first review.

Some sources in Kuwait, however, argue that these reasons are beyond the Audit Bureau’s remit. “How could [the price] be too high, when a thorough feasibility study has been done and the technical specifications were clearly determined [by independent consultants], and the offers were made against those specifications?” another source told MEED previously.

In the event that the Ministers Council likewise rejects the contract, the final option would be for the public works minister to retender the project. If this happens, this would mark the third time that Kuwait’s multibillion-dollar Terminal 2 airport project is tendered. The contract was first retendered in early 2015 after the low bid exceeded the estimated cost of the project by 39 per cent and failed to meet the technical requirements.

A Turkish/local team comprising Limak Holding and the local Kharafi National submitted the lowest bid, at $4.3bn, for the construction of the new airport in August 2015.

Several members of the Kuwait parliament has alleged that the public works minister, before Al-Omair took over the post, committed financial and administrative irregularities in the contract and award process for Terminal 2 and threatened to subject Al-Omair to a parliamentary inquiry if the contract is awarded without a review.

The total investment required in developing Kuwait International is expected to reach $6bn. In addition to the new terminal, an estimated $3bn will be spent on widening runways, enhancing control tower facilities and building new cargo facilities.

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