Infrastructure News

11/06/2018

German-Kuwaiti consortium sign contract for US$1.6 billion wastewater PPP in Kuwait

The Kuwait Authority for Partnership Projects (KAPP) has announced the commercial close of the Um Al-Hayman Wastewater Treatment Plant project. The selected developer, a consortium of WTE Wassertechnik GmbH Group and International Financial Advisors, has signed an agreement with the General Manager of KAPP and the Undersecretary of Ministry of Public Works to begin establishing the project company.

The project consists of the construction, operation, maintenance and management of a new wastewater treatment plant within the parameters of existing Um Al-Hayman plant in southern Kuwait, which will initially treat an estimated 500,000 cubic meters of average daily flow. The new plant will be expandable by 200,000 cubic meters per day with a final capacity of 700,000 cubic meters per day. The length of the PPP contract is 25 years, with a three-year construction period.

The project company will also establish a transmission network from AlEqaila pumping station to the new plant, a contingency route and a main electrical transmission substation, under a three-year Design-Build-Operate contract. The assets will then be handed over to the Ministry of Public Works.

KAPP has not released an official cost estimate for the project. However, the prolific investment holding company KIPCO (Kuwait Projects Company) disclosed a projected cost of US$1.6 billion earlier this year, quoting the National Bank of Kuwait.

The tender for the project was launched in May 2015. WTE was announced as having submitted the lowest bid in March 2017, though was not officially awarded the project until December. The extended period between then and commercial close was due to the delayed approval of Kuwait's Council of Ministers and KAPP of the final contract.

This project is the second PPP to be awarded in Kuwait since the new PPP law was passed in 2014. The first project was the AlZour North Independent Water and Power Project (IWPP), which involves a greenfield combined cycle gas-fired power and desalination plant, completed in December 2015.

A third project has been awarded and is awaiting final contract approval before commercial close. The project concerns solid waste treatment across a 500,000 m2 site in the Kabd area, 35km from Kuwait City. It was awarded to a consortium of Constructions Industrielles de La Méditerranée (CNIM), Gulf Investment Corporation (GIC) and Al Mulla Group in August 2017, and was approved by the Council of Ministers at the same time as the Um Al-Hayman project.