Kuwait’s National Assembly has voted to scrap plans for the country’s first independent water and power project (IWPP) at Al-Zour North. The recommendation means the government will now need to decide whether the scheme should be retendered, cancelled or progress as planned.

The news follows the resignation of Kuwait’s Finance Minister, Mustapha al-Shamali, after a lengthy grilling from members of parliament in May. Parliament has voted on aspects relating to Al-Shamali’s responses, including those relating to certain aspects of the project. 

Kuwait’s Electricity & Water Minister Abdelaziz al-Ibrahim has criticised the recommendation to cancel the project as it would delay the launch of the facility and deprive Kuwait of much-needed power generating capacity.

The Partnerships Technical Bureau (PTB) selected UK/French company IP-GDF Suez, Japan’s Sumitomo and Kuwait’s AH Sagar & Brothers Group as preferred bidder to build the project in February (MEED 23:2:12).

The group submitted the lowest bid to build the project with an annual equivalent payment (AEP) value – the yearly payment to the developer over the lifetime of the project – of KD127.1m ($453m).

The second-lowest bid, which was entered by Japan’s Marubeni and Kuwait’s Alghanim, was named second-ranked bidder. The group submitted an AEP bid of KD132.5m. Malaysia’s Malakoff International, South Korea’s SK Group and the local National Industries Group also submitted a bid of KD171.7m.

Five groups responded to the request for proposals (RFP), but only three financial bids were opened in early February. The financial envelope for a bid submitted by Japan’s Mitsui, Kuwait’s Kharafi Group and Kuwait’s Ahmadiah was not read out at the bid opening.

Another bidding group was disqualified ahead of the commercial bid opening (MEED 2:2:12). A bid submitted by Acwa Power, Kuwait’s GIC and South Korea’s Samsung C&T was rejected following a technical evaluation.

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 & 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.

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