Interview: Adel Al Roumi
In the wake of new legislation, to what extent have public-private partnership (PPP) projects been able to attract participation from foreign companies?
ADEL AL ROUMI: The government has established a PPP programme to promote and support increased private sector participation in infrastructure PPP projects in Kuwait. Law No. 7 of 2008 sets the foundation for the implementation of these projects in the country and combines the goal of attracting private sector participation based on competitive and transparent rules with the social objective of ensuring that the economic benefits of private investment are shared among Kuwaiti citizens. It is important to plan ahead before starting the tendering process and this is why the PTB collaborated with the World Bank to develop guidelines that focus on setting transparent and equal opportunities for international and local investors.
Most projects tendered by the PTB have attracted major developers and investors. For the independent water and power producer (IWPP) project in Az Zour North, 17 international consortiums expressed their interest, and for the Um Al Hayman project, PTB received more than 52 requests to participate.
What steps has the PTB taken to favour quality and value in tenders rather than price?
AL ROUMI: According to Law No. 7 of 2008, each project tender goes through a bidders qualification phase, known as a request for qualification (RFQ), before moving on to the request for proposal. During the RFQ, the PTB examines the bidder’s/consortium of bidders’ financial and technical experience, financial standing and track record, as well as legal forms, before announcing the final list. Only investors with sufficient experience are able to present their proposals. Because the PTB and its higher committee acknowledge the importance of quality and value in tenders over price, a technical evaluation always precedes the financial one, and looks into the responsiveness of the bidder to the project’s terms of reference, proposed methodology and work plan, in addition to innovative technologies. The technical evaluation is usually considered more important than the financial side. And bidders who exceed a specified percentage in the technical evaluation qualify to proceed to the financial proposals evaluation.
How can Kuwait remain attractive to international companies and in what ways can it compete with the flexibility of other GCC states?
AL ROUMI: Kuwait is at present the only country among GCC states with a legal framework in place for PPP projects, through Law No. 7 of 2008 and its bylaws. The responsibility of managing, auditing and executing PPPs is being assigned to the PTB, which is an independent regulatory unit. This ensures that processes, information and standards are transparent, while also helping to avoid any potential conflict of interest, strengthening the procuring bodies and increasing the private sector’s confidence in tendering procedures.
Kuwait is financially committed to its PPP mega-projects, with the aim to create opportunities for private sector partners, as well as to provide new employment, transfer relevant knowledge and technology, and improve services at the state level.
What will be the catalyst to jumpstart the implementation of the National Development Plan (NDP)?
AL ROUMI: Projects planned by the PTB are aligned with the NDP. Phase 1 of the Az Zour North IWPP is in fact the first project awaiting approval under the NDP and is one of the first PPPs to be tendered in Kuwait. As such, preparation and implementation of the project must cover all the identified sectors to fairly manage its risk allocation. It is important to boost the support from government entities for PPP programmes as many are key stakeholders that can affect the success of projects.
The lesson to be learnt is that the PTB must keep the positive momentum generated by the approval of Az Zour North, which is hoped will become a catalyst in the success of Kuwait’s PPP programme in the long term.
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