Water. Desalination + reuse
Issue link: https://fhpublishing.uberflip.com/i/792465
Water. desalination + reuse March 2017 On Site 23 and the project team "walked into all these little traps," says Biffen. But pretty soon they began to understand the local business culture and landscape, and to develop contacts and friendships that could help to move the project forward. One of the bigger challenges was around specifying the technology and equipment required by a modern power station. Previously, projects executed in Kuwait were limited to using equipment on an approved list, on which local agents receive a mark-up of somewhere between five and 15 per cent. The approved list did not include the right equipment for the project. "We had to start again, and go through an approvals process. We have tried to introduce international standards, but they were not always fully accepted or understood," says Biffen. In a context where there are no approved standards and there is no precedent for private companies operating, gaining permissions from organisations such as KFD was a new experience for all involved. "You're pushing against the grain, doing things for the first time, and these guys like the KFD, they've never worked with a private company before," says Biffen. The engineering, procurement, and construction (EPC) contract was awarded to a consortium of HHI and Sidem, on a joint and several liability basis; and they provided some of the technology. Private operators own 40 per cent of the project, of which 17.5 per cent is Sumitomo, 17.5 per cent is Engie, and 5 per cent is Al Sagar, a local partner that also owns National Bank of Kuwait. The Kuwait Investment Authority and the Kuwait Pension Fund own 5 per cent apiece, and KAPP owns the remaining 50 per cent. The half owned by KAPP will now be offered as an investment The teams from Hyundai Heavy Industries, Sidem and Shamal Az Zour pose in front of the brand new water distillers on a late November morning in 2016, as the new plant was poised to begin commercial operations. Personnel from Sidem are sporting blue hard hats, and HHI and Shamal Az Zour wear white hats. continued from page 20 While the project structure was borrowed from other previously successful projects in the Middle East, it was introduced to Kuwait for the first time on Az Zour North. This represented an entirely new way of doing business for many personnel working at government-owned utilities and other entities in Kuwait, such as the Ministry of Electricity and Water (MEW) and the Kuwait Fire Department (KFD). "We are one of the first foreign and privately owned companies allowed to operate in Kuwait without a local business partner. We were like Jonny Foreigner turning up. All other companies have a Kuwaiti partner, and that's how business is done," explains Biffen. "If you want to open up a chain of restaurants in Kuwait, you have to find a partner who will work on your behalf. It's an old boys' network, that's how it works. We have some local partners but they're not there as a sponsor, to register our company, they're shareholders." At first, the new way of operating caused a few setbacks, Az Zour North Phase One borrowed a structure from previous similar size projects in the Middle East. As the first private company to operate independently in Kuwait, the delivery team faced unique challenges.