Limak signs $4.34bn deal to build Kuwait International Airport terminal

Turkey’s Limak Construction has been officially awarded the contract to build the new terminal at Kuwait International Airport (KIA). The development comes nine months after reports first emerged that it had won the work, and more than 18 months after reports said that all initial bids had been rejected. The company, which is part of […]

Turkey’s Limak Construction has been officially awarded the contract to build the new terminal at Kuwait International Airport (KIA).

The development comes nine months after reports first emerged that it had won the work, and more than 18 months after reports said that all initial bids had been rejected.

The company, which is part of the 50,000-strong Limak Holding group, submitted a bid of US$4.34 billion to carry out the work and was told by Kuwait’s Central Tenders Committee in August last year that its bid was the lowest.

Once complete, the new passenger terminal will have a capacity to handle 25 million passengers per year and be able to handle all aircraft types through 51 new gates and stands. The Foster + Partners-designed terminal is due to take six years to complete, but Limak’s contract also includes a further two-year maintenance contract.

The contract-signing ceremony was attended by Kuwait’s Minister of Public Works, Ali Al Omair, the president of its civil aviation directorate, Fawaz Al Farah and Limak Group vice-chairman Sezai Bacaksız.

The procurement process for the 708,000 square metre terminal has been running for several years. Foster + Partners’ designs for the project, which features an ability to generate 12 megawatts of solar power through 66,000 roof panels, were first unveiled in October 2011.

Limak and its Kuwaiti agent Kharafi National were initially revealed to have submitted the lowest bid to build the project — at $4.78bn — in November 2014. However, at the time, the Ministry of Works decided to reject all of the bids on the table, citing problems with the process, and re-tendered the project, before eventually re-awarding it to Limak for the slightly lower sum.

Mr Bacaksız said: “The project is more than an airport, it’s a link between the two countries; Kuwait and Turkey, between two economies, between two societies.

“As a result of this link, new technologies will be introduced and transferred, new jobs will be created locally, planned local procurement will be in the hundreds of millions of dollars, local businesses will flourish, all while we train and equip Kuwaiti men and women through various education and empowerment initiatives that we have planned for Kuwait over the next six years and beyond.”

More than one million cubic metres of concrete and over 100,000 tonnes of structural steel will be used in the terminal’s construction, which has been designed with a single roof canopy containing glazed openings aimed at letting in light while deflecting heat. It is hoped that once construction completes, the terminal will be awarded LEED Gold sustainability status.

The Gulf’s governments have continued to spend on developing airports despite challenges arising from lower oil prices constraining budgets, with Dubai’s recent award of a contract to Alec to expand Al Maktoum International’s terminal from a capacity of 5 million passengers to 26.5 million the most recent example.

Writing in Deloitte’s new GCC Powers of Construction report, the firm’s regional head of airports, Dorian Reece, said that several governments across the region are looking at alternative ways of funding airport development, including potential privatisations or public-private partnerships.

“Saudi Arabia has announced a pipeline of airport PPPs, building upon its recent announcement of granting an operate and maintain (O&M) concession for Riyadh Airport,” said Mr Reece.

The kingdom’s first PPP airport project opened at Madinah in July last year and was built by a consortium including Turkey’s TAV Construction, Al Rajhi Group and Saudi Oger.

The O&M contract for King Khalid International Airport’s new Terminal 5 building was awarded to Dublin Airports Authority International (DAAI) in February. DAAI’s sister firm ARI also secured a 10-year contract to run retail operations at Abu Dhabi International’s new Midfield Terminal Building in December 2015.

mfahy@thenational.ae

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Source: Business

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