Kuwait to issue new tender for power plant build, April

NEW TENDER: The Kuwait government has estimated that the new 2,000 megawatt plant will cost less than $2.4bn to build. (Getty Images)

Kuwait has announced it plans to issue a new tender for the construction of a power plant in April, which will cost far less than original estimates of more than KD700m ($2.4bn), according to a government official.

Six firms previously pre-qualified to bid to build the 2,000 megawatt Subbiya plant would be invited to reapply, said Khaled al-Wasmi, assistant undersecretary at the Ministry of Electricity and Water.

"I expect the new tender to be issued during the first or second week of April ... Due to the economic situation and global recession, the cost is expected to fall significantly," he said, without elaborating.

Bidders and the government have so far failed to reach a deal over shouldering the hedging risks for the plant as banks showed little appetite for the transasction, which was offered in Kuwaiti dinars, sources familiar with the deal said in February.

Wasmi said the quotation for the tender would be valued now as 60 percent in international currencies such as the euro, yen or US dollar, with the remainder in dinars.

Initial bids for the plant, which is due to come on stream in 2011, ranged from KD760.69m to KD930.47m, the ministry said in November.

The six pre-qualifiers included Germany's Siemens, US General Electric Co, Japan's Mitsui & Co and Marubeni Corporation, Spain's Iberdrola Ingenieria Y Construccion and Canada's SNC-Lavalin Limited.

Peak demand strains the capacity of the power grid in the desert state, where air-conditioning is widely used.

Kuwait, with one of the world's highest per capita power consumption rates, has said it plans to boost power capacity to around 16,000 megawatts from 10,000 MW by 2012.
(Reuters)

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