Kuwait Launches Tenders for Al-Zour North Independent Water and Power Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--The tender for the much-delayed Al-Zour North independent water and power project (IWPP) has been issued by Kuwait's Ministry of Electricity and Water.

Under the scope of the tender, which covers the first phase of the project, the winning bidder will be responsible for the construction of the plant on a design, build, operate and maintain basis.

A pre-tender meeting will be held with interested bidders on April 12, after which participants will have until May 30 to submit bids. The first phase of the plant, which will produce 1,500 megawatts (MW) of electricity and 102 million gallons per day of desalinated water, is scheduled to begin operations in April 2012 and enter commercial service in April 2013.

When all four phases of the project are complete, the plant will have an electricity production capacity of 4,800 MW and a total water desalination capacity of 208 million gallons per day. The cost for the fully completed project was estimated at more than $1.36 billion by the ministry in June 2008, when it announced plans to resurrect the project.

The Al-Zour project had been up for tender previously several years ago, but the project was cancelled, reportedly because of limited interest by qualified bidders. However, some sources blamed the lack of interest by the inflexible tender regulations in force in Kuwait at the time.

In December 2005, the ministry had prequalified seven companies to bid for the project. Only one bid was actually received by the deadline early the following year, from a consortium made up of Doosan Heavy Industries and Construction Company Limited (Changwon, Korea); Washington Group International, which has been part of URS Corporation (NYSE:URS) (San Francisco, California) since November 2007; and the privately owned Consolidated Contractors Company (CCC) (Athens, Greece).

For the current tender, the ministry has prequalified six bidders, consisting of local and international companies, or in some cases, a mixture of both. General Electric Company (NYSE:GE) (Fairfield, Connecticut) has combined with the local firm Abdulaziz Abdulmohsin Al-Rashed Sons Company (Kuwait City, Kuwait), while Mitsui & Company Limited (OTC:MITSY) (Tokyo, Japan) is working with Thuwainy Trading Company (Safat, Kuwait).

Another combination of international and local business interests is the grouping of the Spanish energy company Iberdrola Ingenieria y Construccion S.A. (MCE:IBE) (Bilbao, Spain) with Allied Technical General Trading and Contracting Company (Jubail, Saudi Arabia).

SNC-Lavalin Group Incorporated (TSX:SNC) (Montreal, Quebec) has teamed up with Heavy Engineering Industries and Shipbuilding Company (KUW:SHIP) (HEISCO) (Safat, Kuwait) and has been prequalified by the Ministry.

The remaining prequalified bidders are the local Matajer Al Khaleej General Trading and Contracting Company (Kuwait City, Kuwait) and Siemens AG (NYSE:SI) (Munich, Germany), both of which have prequalified as separate entities.

In August 2007, Siemens was awarded the $482 million contract to convert the Al-Zour South power plant to a combined-cycle plant.

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