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Kuwait to probe two contracts awarded to foreign firms

The Kuwaiti National Assembly has voted to probe alleged irregularities surrounding the award to foreign contractors of two major contracts – the Subiya Causeway and the Al-Zour North Power Plant – together worth approximately $5bn.

At the instigation of some MPs, Kuwait’s political assembly agreed, by a close vote, to form a special panel to investigate the matter, according to reports.

Twenty-three MPs voted for the proposal, while 20 MPs sided with the government in opposing it.

A five-MP panel has been convened and must conclude its investigation within three months.

The Subiya Causeway contract was awarded in 2011 to a consortium led by Hyundai Engineering

The first contract, awarded in 2011 to South Korea's Hyundai Engineering and Construction Co. and the local Combined Group Contracting Co., is for the 37.5-km causeway linking Kuwait City with Subiya, across Kuwait Bay, at a cost of $2.6bn.

The second is for building a power and water desalination plant in Al Zour area, south of Kuwait City, for $2.5bn to produce 1,500MW of electricity and over 100 million gallons of drinking water daily.

The contract was awarded to Japan’s Sumitomo Corp, France’s International Power-GDF SUEZ and Abdullah Hamad Al-Sager and Brothers.

Speaking against the measure, government ministers reportedly warned MPs that the probe would send a “wrong message to investors” and foreign contractors.

They also warned that any disruption to progress at the Al Zour power plant could result in power shortages in the future.