Kuwait probes 'secret deals' in $5bn of contracts

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Kuwait will investigate allegations of secret deals in relation to two government contracts worth US$5bn awarded to foreign-led consortia.

A number of MPs claim political bargaining and irregularities were involved in the awarding of contracts to build the Subbiya Causeway and Al-Zour North Power Plant to South Korean, French and Japanese contractors last year, according to AFP.

On Wednesday the Kuwaiti parliament approved the establishment of a panel to investigate the allegations.

The government opposed the plan.

Minister of Electricity, Water and Public Works Abdulaziz al-Ibraheem claimed the probe would send the "wrong message to investors" and potentially discourage future foreign contractors.

One of the contracts under review is to build a power and water desalination plant in Al-Zour, south of Kuwait City, worth US$2.5bn. It was awarded to Japanese company Sumitomo Corp, France's International Power-GDF SUEZ and Kuwait’s Abdullah Hamad Al-Sager and Brothers last year.

The new plant would produce 1,500 megawatts of electricity and more than 100m gallons of drinking water daily.

But al-Ibraheem said if the investigation delayed the project, the country would be forced to announce power cuts next year.

Kuwait’s power capacity of 13,000 MW could be reached within a year, with its consumption already at 12,000 MW last year and growing by 800-900 MW annually.

"By next year, we will have zero reserve capacity without the project and we will be forced to adopt programmed cuts," the minister said.

The second contract – worth US$2.6bn - to be investigated was awarded to South Korea's Hyundai Engineering and Construction and Kuwaiti company Combined Group Contracting to build a 37.5km causeway linking Kuwait City and Subbiya, in north Kuwait.

The five-MP panel has three months to complete its investigation.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Crude control

Crude control

The startling fall in the oil price has renewed questions about...

Saudi Arabia, Kuwait shared zone tensions underlie oilfield closure

Saudi Arabia, Kuwait shared zone tensions underlie oilfield closure

Crude output from jointly-run offshore Khafji oilfield has been...

Petroleum producers shift attention from Middle East: Kemp

Petroleum producers shift attention from Middle East: Kemp

Following four decades of war, sanctions, nationalisation and...

1
Most Discussed