Low bid emerges for Kuwait IWPP role

MEED    29 October 2020 (Last Updated October 29th, 2020 09:40)

Low bid emerges for Kuwait IWPP role

Two teams compete for the transaction advisory role for Al-Zour North 2 and 3 and Al-Khiran 1 power and water projects in Kuwait

A team led by UK-based Ernst & Young (EY) has submitted a low bid of KD1.2m ($3.9m) for the transaction advisory services contract for the planned Al-Zour North 2 and 3 and Al-Khiran 1 independent water and power producer (IWPP) projects in Kuwait.

The other team, led by KPMG Advisory, has offered KD1.6m for the contract.

MEED has contacted the Kuwait Authority for Partnership Projects (Kapp), EY, and KPMG to confirm the tender’s status.

The Kuwait Authority for Partnership Projects (Kapp) opened the financial envelopes from both teams on 21 October, it has been confirmed.

KAPP announced that two teams had passed the contract’s technical evaluation stage last week.

The two teams are:

  • Ernst & Young (EY) (finance) / Atkins (technical) / Addleshaw Goddard (legal) (all UK-based)
  • KPMG Advisory (finance, local) / DLA Piper (legal, UK) / ILF Consulting (technical, Austria)

Kapp received four bids for the contract on 23 July and opened the technical bids five days later.

UK-based PWC and Rodl Middle East led the teams whose technical bids failed at the evaluation stage.

It is the second time the transaction advisory services contract for both schemes has been tendered.

Kapp first tendered the contract in December 2018 after it received expressions of interest (EOIs) from developers a month earlier.

It cancelled the tender in October last year.

Kuwait started the procurement process for the two power and water projects simultaneously, following the 2017 cancellation of the previously planned Al-Zour North 2 IWPP, which was cancelled 14 months after bids were submitted.

Merged plans

The Al-Zour 2 and 3 IWPP will merge the previously planned second and third phases and will have a generation capacity of 2,700MW and a desalination capacity of 165 million imperial gallons a day (MIGD).

The Al-Khiran 1 IWPP will have a power generation capacity of 1,800MW and a desalination capacity of up to 125 MIGD.

In November 2018, MEED reported that Kapp received EOIs from developers for the two IWPPs.

Kuwait has struggled to make progress with its IWPP programme, following the commissioning of its first IWPP, Al-Zour North 1, in late 2016.

Following a number of delays to the tendering of the country’s first IWPP, the government amended the country’s public-private partnership (PPP) legislation in 2014 and reformed the national PPP body, changing its name to Kapp from the Partnerships Technical Bureau.

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