Kuwait committee wants to scrap bids for $4.8bn airport expansion
Consortium of Kuwait’s Kharafi National and Turkey’s Limak Holding said to have submitted lowest bid for terminal project
A committee of Kuwait’s Ministry of Public Works has recommended that all bids to build a new terminal at the country’s international airport be rejected, it has been revealed.
Abdulaziz al-Ibrahim, Kuwait’s Minister for Electricity, Water and Public Works, said a technical committee in the ministry had made the recommendation, according to state news agency KUNA.
Ibrahim did not give further explanation as to why the recommendation had been made, but asserted that all aspects of the bidding had been studied.
In November 2014, the tender committee for the project said a consortium of Kuwait’s Kharafi National and Turkey’s Limak Holding had submitted the lowest bid for the Kuwait International Airport contract, worth $4.78 billion.
According Al Watan, a local Arabic-language paper, ministry sources said that the lowest bid for the project exceeded the estimated costs by 39%. It also did not meet technical specifications, the sources added.
Other bidders for the project contract included China State Construction Engineering Corp and the Dubai-based contractor Arabtec.
Speaking to Big Project ME on condition of anonymity, a source from one of the contractors previously involved in the bidding process said that it would not be a surprise if there was a second round of tenders as “all the submitted tender prices were higher than the government’s expectations”.
The KUNA report did not confirm whether the technical committee’s recommendation to reject all bids would be adopted, or whether a new round of bidding would be arranged.
There are currently infrastructure projects worth tens of billions of dollars in Kuwait’s development pipeline, but the country’s government has struggled to implement a number of them due to bureaucratic delays, political tensions and allegations of corruption and inefficiency.
In a report about Kuwait in January 2014, Big Project ME spoke to local and international firms operating in the country and found that the general consensus was that Kuwait was failing to grasp the opportunities offered in its development.
“Development in Kuwait appears to be curtailed by numerous changes to the government, which have occurred at least every year for the past few years,” said Paul Wouterson, regional director for Faithful + Gould’s Kuwait offices.
Studies by Big Project ME revealed that the Kuwaiti government framework remains highly inclusive of administrative opinions.
A well-placed source from the country’s market, who requested anonymity for risk of commercial repercussions, went so far as to call this inclusive approach – accounting for and attending to every opinion from the governmental sector – the reason behind an eventual slowdown in the Kuwaiti construction market.
“Kuwait has a weak business environment compared with other GCC countries”, a 2014 Deloitte report on the country stated. It added that the country’s lengthy tendering process and favouritism as a major dampener for the private sector – from within and abroad, casting a gloomy portent for Kuwait’s future development.
