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KAPP Solicits Proposals for 50-Year Fixed Telecom Network Project

Official Announcement:

The Kuwait Authority for Partnership Projects (“KAPP”), in conjunction with the Ministry of Communications of Kuwait (“MOC”), officially declares on this day, December 24th, 2023, the commencement of a solicitation process for qualified local and international enterprises and consortiums. This solicitation invites the submission of Statements of Qualification (“SOQ”) for the Fixed Telecommunications Network Development Initiative (hereinafter referred to as “the Project”). This invitation is extended in accordance with Law No. 116 of 2014, governing Public-Private Partnerships, and its implementing regulations (collectively, the “PPP Law”).

Project Overview:

The Project envisages the formation of a public-private partnership entity, structured as a public joint-stock company (hereinafter referred to as “the Project Company”). The mandate of the Project Company includes the design, financing, construction, operation, maintenance, and eventual transfer of the MOC’s network assets. This encompasses both active (equipment and devices, switches, ONT, OLT) and passive infrastructure (central buildings and offices, local exchange spaces, ducts and cables, dark fiber), in addition to the copper network infrastructure (fixed telephone lines) (collectively, “MOC’s Active Infrastructure”).

Project Goals:

Speed: Achieving industry-standard bandwidth capabilities, starting with 10 Gbps.

Coverage: Expanding fiber network coverage to a minimum of 90% of Kuwaiti households by the year 2028.

Service Enhancement: Upgrading commercial offerings and customer service quality.

Employment Opportunities: Creating employment and training prospects for Kuwaiti nationals in the Information and Communication Technology sector.

Cost Efficiency: Reducing operational expenditures for MOC.

PPP Agreement:

The Project will be executed following a comprehensive model encompassing design, finance, build, operate, maintain, and transfer, as prescribed by the PPP Law. MOC will serve as the contracting authority, engaging with the Project Company. The tenure of the PPP Agreement with MOC is stipulated to be 50 years, inclusive of a maximum 5-year period allocated for design, financing, and construction phases. The Project Company is charged with the enhancement and expansion of the fiber network to achieve a target of 90% coverage across households and businesses within five years of the PPP Agreement.

Consortium and Equity Structure:

The Project Company will operate as a public joint-stock company. The successful bidder is expected to acquire an equity stake ranging from 26% to 44% in the company. The leading member of the consortium must retain a minimum of 35% equity in the consortium, while other consortium members are required to hold at least 15% of the consortium’s shares.

Legal Advisory Services:

Al-Hossam Legal is poised to provide comprehensive legal services in the realms of privatization, public-private partnerships (PPP), Independent Water and Power Projects (IWPP), and various government and infrastructure projects. We extend our expertise to project sponsors, developers, bilateral and syndicated lenders, equity investors, operators, and contractors, offering a full spectrum of legal services in government and PPP/IWPP projects.

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