Kuwaiti Lawmakers Want Power Plant Contract Scrapped

In January the government signed a deal with a consortium led by France’s GDF-Suez to build the 1,500 megawatt Az Zour plant.

Kuwaiti lawmakers have called for the scrapping of a contract to build a gas-fired power and seawater treatment plant, a newspaper said, putting pressure on an important project in the Gulf state’s development plan.

Lawmakers and the government have often clashed over the awarding of large infrastructure contracts, and political infighting has held up investment and economic reforms in the major oil producer.

In January the government signed a deal with a consortium led by France’s GDF-Suez, and including Sumitomo Corp of Japan, to build the 1,500 megawatt Az Zour plant – part of plans to diversify the oil-reliant economy.

Some lawmakers criticised the tender process as not being transparent enough.

A parliamentary investigation commission recommended the contract be scrapped, al-Rai newspaper reported on Sunday on its website without giving details.

Al-Rai said the panel, however, had no objections to another project – a $2.6 billion causeway which is set to be built by South Korea’s Hyundai Engineering and Construction Co according to a contract signed in November.

A more stable political climate in Kuwait since the start of the year raised hopes that delayed projects in a 30 billion dinar ($108 billion) economic development plan announced in late 2010 may now go ahead.

In recent weeks however tensions have escalated between elected lawmakers and the government, which is picked by a prime minister selected by the ruling emir.

The development plan, which also includes building a new airport terminal and hospitals, is aimed at creating jobs outside of the oil sector and attracting foreign investment.