New PPP Regulations

Further to the publication of the new PPP law in August 2014, the corresponding executive regulations were published in the official gazette on 29 March 2015.

The new regulations provide developers with additional information and clarification on key procurement matters such as prequalification, bid submission requirements, bid bond requirements, bid evaluation procedures, selection of and negotiation with the preferred bidder, and award of the project. Such clarifications should provide developers with greater certainty as to the procurement process for important upcoming projects such as those mentioned below.

Developers may also be interested to learn that the new regulations permit developers to take the initiative and propose projects to the Kuwait Authority for Partnership Projects (KAPP) which, if accepted, offer certain economic benefits with respect to the costs of the feasibility study for such proposal.

The KAPP has yet to publish an updated PPP Project Guidebook, which developers will be looking towards for practical guidance as to how the new PPP law and regulations are to be interpreted.

Project Pipeline

The KAPP is currently procuring two major independent power and water production complexes in accordance with the new PPP law and executive regulations and the IWPP law and executive regulations.

The first of these complexes is Az-Zour North which is expected to be developed in 5 phases with a total capacity of 4,850 MW of power and 283 MIGD of water. The second of these complexes is Al-Khairan which is expected to be developed in 3 phases with a total capacity of 4,500 MW of power and 125 MIGD of water.

The KAPP was receiving qualifications for Phase 2 of Az-Zour North and Phase 1 of Al-Khairan up until 9 April 2015 and is expected to release the request for proposals (RFP) for Phase 2 of Az-Zour North ahead of the RFP for Phase 1 of Al-Khairan to avoid any overlap in the procurement process for, and to ensure a high level of private sector participation in, both projects.

The projects represent Kuwait’s second and third IWPP, building on the success of Phase 1 of Az-Zour North which established the Kuwaiti IWPP model in 2013.

PPP Infrastructure in Kuwait

Power and water are not the only sectors to be developed in accordance with the new PPP law and executive regulations.

The Government of Kuwait plans to spend USD$47.2 billion on infrastructure projects outlined for 2015 according to MarketResearch.com.

Together with the KAPP, the Ministry of Communications intends to procure a metropolitan rapid transit system (KMRT) and a railway system which are both in the feasibility and study phase. In addition, the Kuwait Municipality intends to procure the KABD Municipal solid waste to energy project, which is in the prequalification phase, and the Ministry of Public Works intends to procure the Umm Al Hayman wastewater project, which has completed the prequalification phase.