Decree No. 78 of 2015 Issuing the Executive Regulations of Law No. 116 of 2014 on Public-Private Partnerships

Decree No. 78 of 2015
Issuing the Executive Regulations of Law No. 116 of 2014 on Public-Private Partnerships

Article One

The provisions of the Executive Regulations of the aforementioned Law No. 116 of 2014, the texts of which are attached to this Decree, shall be applied.

Article Two

The Ministers, each within his own competence, shall implement this Decree, which shall come into force from the date of its publication in the Official Gazette.

Executive Regulations of Law No. 116 of 2014 on Public-Private Partnerships

Chapter One – Definitions

Article 1

In the application of the provisions of these Regulations, the following terms shall have the meanings set out opposite each of them:
– The Law: Law No. 116 of 2014 on Public-Private Partnerships.
– The Regulations: the Executive Regulations of Law No. 116 of 2014 on Public-Private Partnerships.
– Guidance Manual: the manual prepared by the Authority on PPP Projects to serve as guidance in applying the provisions of the Law and these Regulations.
– Final feasibility study: a feasibility study prepared by the Winning Investor of the project.
– Contract Documents: the set of contracts and their annexes that are signed for the implementation of a PPP Project and that together form an integral whole for the implementation and interpretation of the PPP Agreement.
– Letter Agreement: one of the Contract Documents, signed between the Public Entity, the Authority and the Winning Investor, to which the final agreed Contract Documents are attached, and which contains conditions precedent consisting of specific and preparatory obligations for the valid entry into force of the PPP Agreement.
– Confidentiality Agreement: one of the Contract Documents under which its parties undertake to ensure the confidentiality of the information exchanged in connection with its implementation, and which is signed before the Project Tender Documents are obtained.
– Substitution Agreement: one of the Contract Documents that regulates the terms and conditions for replacing the Contracting Investor with another investor who takes its place with the same or better qualification specifications and Terms of Reference on the basis of which the project was awarded, in order to complete the contract term.
– Construction period: the period specified in the PPP Agreement for completing the construction and equipping works or the development works; it begins from the date of signing the PPP Agreement and is not counted as part of the investment period.
– Investment period: the period specified in the PPP Agreement, which begins from the date of completion of the construction and equipping works or from the date of completion of the development works, in whole or in part, as provided in the Project Tender Documents, and which shall not exceed (50) fifty years.
– Pre-qualification: the procedures undertaken by the Authority to verify the capabilities of investors wishing to invest in a PPP Project before allowing them to submit their technical and financial bids.
– Post-qualification: the procedures undertaken by the Authority to verify the capabilities of investors wishing to invest in a PPP Project through a comprehensive bid covering qualification and the technical and financial proposals.
– Consortium Company: the company incorporated in the State of Kuwait by the Winning Investor, directly or indirectly, as provided in the Project Tender Documents, to implement the project directly or to own shares in the Project Company, as the case may be.
– Competitive Dialogue: the rules and procedures conducted by the Authority when tendering the project in two stages for the purpose of receiving the private sector’s proposals on the components of the project and the terms of its tender.
– Concept proposer: any natural or legal person, Kuwaiti or foreign, who submits to the Authority a Concept for implementing a project under the PPP Model through a preliminary feasibility study of the project that is consistent with the State’s strategy and development plan, with a view to its approval and tendering in accordance with the provisions of the Law.
– Request for Expression of Interest: an optional stage through which the Authority surveys the interest of the parties wishing to participate in a PPP Project.
– Initiative: an innovative PPP Project of a creative Concept unprecedented in the State of Kuwait, approved by the Higher Committee on the basis of a comprehensive feasibility study submitted by its proposer to the Authority, and having an economic or social return consistent with the State’s strategy and development plan.
– Distinguished Project: a PPP Project approved by the Higher Committee and based on a comprehensive feasibility study submitted by the Concept proposer, and having an economic or social return consistent with the State’s strategy and development plan.
– Financial Close: the date on which the financing contracts are concluded between the Project Company and the Lenders to commence the financing of the project and to transfer the amounts agreed with the Lenders in accordance with the ratios specified in the Project Tender Documents and the PPP Agreement.
– Competition Committee: the joint team formed by a decision of the Authority, with the approval of the Higher Committee, for each project separately, to review, study and prepare the project’s papers and documents and to evaluate the technical and financial bids and to propose the award of the project, and whose membership includes, in addition to such of its employees as the Authority deems fit, representatives of the Public Entities concerned with the project being tendered.
– Grievances Committee: the committee formed in accordance with the provisions of Article (32) of the Law to consider complaints and grievances submitted by interested parties against decisions or procedures issued by the Higher Committee or the Authority.

Chapter Two – Methods of Proposing PPP Projects and the Mechanism for Their Approval

Article 2

Proposal of PPP Projects
The proposal to tender and implement Public-Private Partnership Projects shall be made by one of the following parties:
1. Public Entities: a Public Entity wishing to propose a project falling within its competence under the PPP Model shall submit a request to the Authority accompanied by the comprehensive feasibility studies of the project in accordance with the provisions of the Law, its Executive Regulations and the Guidance Manual.
2. The Higher Committee: approving the request of the Public Entity concerned to tender a project under the PPP Model, and proposing PPP Projects to Public Entities.
3. The private sector: the private sector may submit to the Authority Concepts that include a preliminary feasibility study in accordance with the Authority’s requirements, for implementing a project and approving its tender in accordance with the provisions of the Law.
The Authority, in coordination with the Public Entity, shall review and complete the feasibility studies submitted by the aforementioned parties, as the case may be, in preparation for submitting the appropriate recommendation thereon to the Higher Committee.
The Authority may prepare the comprehensive feasibility studies of the project and its Tender Documents, and in all cases the Authority may seek the assistance of such local and foreign consultancy entities and specialised firms as it deems appropriate for this purpose, in accordance with the provisions of the laws and regulations.

Article 3

Competition Committee
The Authority shall, after the approval of the Higher Committee and as the interest of work requires, form for each PPP Project a committee called the (Competition Committee), in which the Public Entity or Entities whose competences and powers correspond to the nature of the project shall be represented by at least one member whose grade is not lower than that of Assistant Undersecretary, provided that technical, financial and legal expertise is represented therein. The Committee shall review, complete or prepare the project’s studies, papers and Tender Documents and approve them. The Committee shall also be competent to evaluate the technical and financial proposals and to supervise the public session set for opening the financial envelopes of the technically accepted proposals.
For its meetings to be valid, at least three quarters of its members shall be present. It shall issue its decisions or recommendations by a majority of the votes of the members present, and in the event of a tie, the side on which the chairman has voted shall prevail. The Committee may also seek the assistance of such specialists as it deems fit, without their having the right to vote.
The Committee shall be deemed the single window through which the Investor deals, and the Committee member shall be vested with all the powers of the Public Entity he represents, within the limits of the Committee’s competences, so that he may participate in taking its necessary decisions or recommendations without referring back to that entity.

Article 4

Mechanism for Approving Concepts Proposed by the Private Sector
The Authority, in coordination with the proposed Public Entity, shall submit the results of the preliminary studies of the Concepts submitted by the private sector to the Higher Committee, accompanied by its recommendation to approve the project in principle as an Initiative or as a Distinguished Project, or to reject it. If the Concept of his project is accepted, its proposer shall be granted six months to prepare its comprehensive studies, unless the Authority decides, based on the nature of the project, to grant him an additional period for that purpose, in accordance with the rules and procedures set by the Authority and approved by the Higher Committee.

Article 5

Mechanism for Approving Proposed Projects
The Authority shall submit to the Higher Committee the results of the comprehensive study, whether prepared by the Competition Committee, the private sector or the Public Entity, accompanied by its recommendation to approve the project and tender it under the PPP Model, or to reject it. Where it is recommended to approve the tender of the project under the PPP Model, the recommendation shall include the following:
1. The proposed method of competition for tendering the PPP Project, whether by auction or tender.
2. The type of PPP Model proposed for approval.
3. Identification of the Public Entity or Entities with whose nature and objectives the project is compatible, to take part in preparing the tender documents, approving the technical outputs and participating in the evaluation of proposals in preparation for awarding the project, signing the PPP Agreement and following up implementation and operation until transfer to the State.
4. The proposed timetable for the procedures and stages of tendering the project.
5. The proposed investment period.
6. The proposed exemptions and privileges, as well as any special advantage where the project is a Concept proposed for approval.
7. The service proposed to be provided, and its economic, social or service importance, or any of them, or whether it is a development or improvement of an existing service, a reduction of its costs or an improvement of its efficiency.
8. Any request for the allocation of land for the project, if any.
9. Any other criteria or requirements according to the nature of the project and the Guidance Manual.

Article 6

Decision of the Higher Committee on PPP Projects
The Higher Committee shall issue its decision on the projects submitted to it in light of the recommendations submitted to it by the Authority in accordance with the preceding Article.

Chapter Three – Project Feasibility Study

Article 7

Criteria for Preparing the Feasibility Study
The project to be tendered for investment under the PPP Model shall, according to its feasibility study, meet the following criteria:
1. The project shall meet the technical, legal and environmental requirements and be economically viable, and the benefits accruing from it to the State and to the beneficiaries of the service it provides shall be appropriate according to the frameworks specified in the feasibility study and the professional standards approved for that purpose.
2. It shall be established by comparing the implementation of the project under the PPP Model with its implementation by the Public Entity, provided that the comparison is made in light of the following elements, collectively or individually:
a. The cost of implementation (Value for Money).
b. Risk allocation.
c. Transfer of knowledge or use of technology.
d. The project shall have a rewarding financial return for the Investor, and the investment risks in it shall be allocated in a manner acceptable to the private sector, so as to create an opportunity for competition for it and encourage the Lenders to finance it.
e. Any other criteria or requirements specified by the Guidance Manual.

Article 8

Preliminary Feasibility Study
The preliminary feasibility study shall include an initial analysis of the elements of the comprehensive feasibility study. The Guidance Manual shall set out the general framework for preparing the feasibility study for PPP Projects, including the service proposed to be provided, its economic, social or service return, and the benefit and returns expected from it, as well as the methods of comparison between tendering it under the PPP Model or by the Public Entity, taking into account the allocation of the investment risks of the project, whether at the stage of its construction, implementation or operation, as well as the project’s estimated life, the financial, social and economic aspects, and such other matters as best professional practice requires in this regard.

Article 9

Comprehensive Feasibility Study
The comprehensive feasibility study shall in particular include determining the technical and operational dimensions of the project Concept and the economic dimensions, having regard to the following rules:
1. The technical aspects of the project.
2. The operational aspects of the project.
3. Assumptions on the project’s ability to recover its cost and the expected internal rate of return of the project.
4. Assumptions on the participation of the private sector in the project and its interest in participating in its implementation.
5. The expected total cost of the project, including the proposed capital, in addition to the anticipated operating and maintenance costs for a single year of operation.
6. A schedule allocating the project risks.
7. Determining the economic benefits expected from the project.
8. Proposing the customs, tax or other incentives and exemptions necessary for the success of the project.
9. Determining the Investor’s role.
10. Determining the contractual framework of the project.
11. Setting the procedures that ensure competition in selecting the Investor.
12. Determining the legal documents.
13. Determining the roles and responsibilities of the parties proposed to participate.
14. Setting a timetable for implementing the project, including the proposed construction period and the investment period.
15. Sources of financing.

Article 10

Preparation of the Feasibility Study
The Public Entity wishing to tender any project falling within its competence for implementation under the PPP Model shall prepare the comprehensive feasibility study of the project in accordance with the provisions of the Law, its Regulations and the Guidance Manual. It shall also prepare the Terms of Reference of the study, which specify the tasks and elements of the required research relating to the project, and submit them to the Authority for approval.
By way of exception to the foregoing, the Authority may prepare the feasibility study of the PPP Project in cooperation and coordination with the Public Entity, provided that the Public Entity provides the data, documents and studies necessary for that purpose. The Authority may seek the assistance of whomever it deems appropriate for this purpose, whether local or foreign consultancy firms or other public entities, according to the nature and needs of the project.

Article 11

Elements of the Total Cost for Preparing the Feasibility Study
The total cost of the PPP Project shall be determined in light of what is set out in its feasibility study, provided that it includes the following elements:
1. The market value of the right of usufruct of the project land, if any.
2. The value of the assets that the Public Entities provide to the Investor, or the consideration for the right of usufruct thereof.
3. The estimated costs of implementing the project, including capital costs, comprising incorporation, design, construction, financing and equipment expenses.
4. The estimated costs of operating the project for one year.
5. Any other costs consistent with the nature of the project.

Article 12

Project Period and the Bases for Calculating It
The feasibility study shall include a recommendation on the proposed time period for implementing the PPP Project according to its nature and requirements, and in particular the proposed time period for the construction works, which, together with the investment period, constitutes the term of the PPP Agreement.
In determining the term of the PPP Agreement, the following bases shall be taken into account:
1. The economic or social benefits that the State seeks from the project in accordance with its strategic plan.
2. The proposed capital cost of implementing the project.
3. The expected cost of financing the project, the potential revenues, the return on capital and the internal rate of return of the project.
4. The expected cash flows of the project.
5. The time period necessary to achieve an appropriate return that makes the PPP Project attractive to companies of experience and good reputation to compete for it, so as to enable high quality of the services and infrastructure provided by the project to be achieved.
6. The optimal time period for the contracting Public Entity to recover the assets provided by the Investor and transfer them to the State, without contravening the special nature of each project and the maximum productive capacity of the equipment against the investment and operation period, in accordance with the recommendations of the manufacturers.

Chapter Four – General Principles for Tendering PPP Projects

Article 13

Tender Stages – Expression of Interest
The Authority may announce a Request for Expression of Interest for PPP Projects, as a procedure preceding the qualification procedures, in order to ascertain the extent of the private sector’s interest in participating in the implementation of the project before taking the procedures for its tender. The announcement shall be made in the Official Gazette and in such other local or international media through which announcement is consistent with the nature of the project, as well as by publication on the Authority’s website.
The announcement shall include a summary of the project, its objectives and the proposed site for its implementation, if any, and shall specify the method of submitting the request and any other information or conditions relating to the project, and the period for receiving requests for expression of interest shall not be less than two weeks from the date of publication of the announcement.
Requests for expression of interest may be accepted by electronic mail.
The Authority shall study the requests for expression of interest submitted by investors, and on the basis of that study the Authority shall determine whether or not it is feasible to take the legally prescribed procedures for inviting pre-qualification of those wishing to compete for the implementation of the project, in preparation for submitting a recommendation to that effect to the Higher Committee.

Article 14

Invitation for Qualification
After the Higher Committee has approved the PPP Project and the type of PPP Model and the method of its tender have been determined in accordance with the provisions of Article (8) of these Regulations, the Authority, in cooperation with the Public Entity designated by the Higher Committee, shall announce the invitation for qualification for the project in the Official Gazette, in at least two Kuwaiti daily newspapers in both Arabic and English, and in such other local or international media through which announcement is consistent with the nature of the project, as well as by publication on the Authority’s website.
The announcement of the invitation for qualification shall include the following:
1. Identification of the Public Entity or Public Entities competent for the project.
2. A summary of the project and its objectives.
3. The experience required for qualification.
4. The contracting system and its term.
5. The fee for obtaining the Qualification Documents; the Authority may defer its payment until the qualification documents are submitted.
6. The period prescribed for submitting qualification applications, the place of their submission and the postal or electronic address, as the case may be. The period for submitting qualification applications shall not be less than (15) fifteen days from the date of publication of the announcement in the Official Gazette, unless the qualification is post-qualification, in which case it shall be included in the period for submitting bids.

Chapter Five – Principles Relating to Qualification

Article 15

Every investor wishing to participate in a project tendered in accordance with the provisions of the Law shall prove its ability to carry out the project and fulfil its obligations if the competition is awarded to it and a contract is concluded with it.
The investor’s capabilities shall be verified through the qualification procedures. The Higher Committee may adopt the pre-qualification method or the post-qualification method, on the recommendation of the Authority and according to the nature of the project, in order to ensure the sound selection of investors capable of implementing each project separately.

Article 16

Pre-qualification
After the Higher Committee approves the feasibility studies and the Qualification Documents, the Authority shall announce the acceptance of qualification applications from investors wishing to invest in a PPP Project through pre-qualification procedures, in order to ascertain the ability of the qualification applicant to implement the project, on the basis of the principles and criteria specified in the qualification booklet.

Article 17

Post-qualification
The Higher Committee may decide to merge the qualification stage into the stage of inviting proposals, in which case the qualification of investors wishing to invest in the project shall be deemed post-qualification.
Post-qualification shall meet the same conditions as pre-qualification, and the investor wishing to invest shall submit the qualification documents in an envelope separate from the envelopes containing the technical and financial proposals.
The post-qualification envelopes shall be opened before the technical and financial envelopes are opened, and a list of the qualified investors shall be prepared and submitted to the Higher Committee for approval before the technical and financial proposals are studied and evaluated.
Investors who have not met the post-qualification conditions may recover their financial bond.

Article 18

Qualification Documents
Taking into account the special nature of each PPP Project, the Qualification Documents shall include the following conditions:
1. Instructions to those wishing to submit qualification applications, explaining the method of preparing and submitting the application.
2. A description of the PPP Project offered for investment, including its location, nature, main components and the area of land proposed for its implementation, if any.
3. A statement of the specific experience required of the investor to pass the qualification stage.
4. The qualification criteria.
5. The final deadline for obtaining the Qualification Documents, specified by date and hour.
6. The place and manner of submitting the Qualification Documents; the Higher Committee may decide therein to accept them by electronic means of communication.
7. The period specified for submitting the Qualification Documents, which shall not be less than (15) fifteen days from the date of publication of the qualification announcement in the Official Gazette.

Article 19

Qualification Applications Submitted by Consortia
Where a Consortium composed of several companies submits a qualification application, the Consortium shall designate a leader from among its members who, under official powers of attorney from the members of the Consortium, shall represent them before the Authority.
The leader of the Consortium shall be required to meet the experience conditions and the percentage that the leader of the Consortium is required to own, which shall be specified in advance in the Qualification Documents.
When evaluating qualification applications submitted by consortia, the qualifications and capabilities of each member of the Consortium shall be considered, as well as whether or not, taken together, they meet the qualification criteria and requirements. The qualification application shall be studied according to the role of each member of the Consortium, in line with the tasks it is proposed to undertake in terms of design, construction, equipping, operation, development, maintenance, rehabilitation or financing, according to the nature of the project and the type of PPP Model approved, and in accordance with the conditions set out in the Qualification Documents.
No member of a Consortium may apply for qualification through another Consortium except with the prior approval of the Authority.
Members of consortia that have been qualified may apply to the Authority to move from one Consortium to another, or to form new consortia among themselves, provided that the new Consortium meets the conditions set out in the Qualification Documents.

Article 20

Evaluation of Qualification Applications
Qualification requests shall be evaluated on the basis of the criteria representing the elements required to be met in the request and the relative weights of these elements, and in accordance with the conditions set out in the Qualification Documents, in particular:
1. The track record of the qualification applicant in the management, implementation and operation of PPP Projects.
2. Its similar experience, in terms of size and type, in PPP Projects in the sector in which the tendered project is classified.
3. The capacity of the qualification applicant to provide the technical and administrative requirements for the purpose of preparing the designs required for the PPP Project when it is tendered.
4. The capacity of the qualification applicant to provide the equipment and installations required to implement the project.
5. The financial solvency of the qualification applicant and its capacity to secure financing.
6. Any other criteria consistent with the nature of the project.

Article 21

Qualification Decision
The Competition Committee shall examine the qualification requests submitted by the Investors and prepare a report recording all of its work, the results of the evaluation of the qualification requests, the Investors whose participation in the next stage of the tendering is accepted, and the Investors proposed to be excluded together with the reasons for exclusion; a report thereon shall be submitted to the Authority.
After examining the aforementioned report, the Authority shall submit its recommendations regarding the qualification requests to the Higher Committee to take the appropriate decision thereon. The Authority shall notify the Investors of the final decision issued regarding the qualification requests at the address specified in their request.

Chapter Six – Principles Relating to Tendering the Project for Investment

Article 22

Tender Documents
The Public Entity, in cooperation with the Authority, shall prepare the Project Tender Documents in accordance with the provisions of the Law and submit them to the Higher Committee to take the appropriate decision thereon. The Authority may seek the assistance of local and international consultancy firms to review or prepare these documents.
The Project Tender Documents shall include, in particular, the following:
1. The Instructions to Bidders.
2. The Terms of Reference, including the technical and financial terms and specifications of the project and the formula on the basis of which the project is awarded.
3. The Confidentiality Agreement.
4. The form of the Contract Document and the language in which it is drawn up, including the draft PPP Agreement and the land lease agreements, if any.
5. The Letter Agreement – if the project is awarded to a Consortium – and the Substitution Agreement for replacing the Investor if it fails to perform its obligations.
6. Any other terms or documents consistent with the nature of the project.

Article 23

Instructions to Bidders
The Instructions to Bidders shall include, in particular, the following:
1. The method of preparing the bid, the number of sealed envelopes required and the contents of each, and the place of its submission. With the approval of the Higher Committee, and in accordance with the procedures it lays down, the bid may be submitted by a means of electronic communication that provides the necessary confidentiality.
2. The final deadline for submitting bids, specified by date and hour, provided that the period for submitting bids is not less than (90) ninety days from the date of publication of the announcement for the submission of bids in the Official Gazette.
3. The amount of the initial bid bond, which shall be paid in Kuwaiti dinars in the form of a certified cheque or a letter of guarantee issued or confirmed by a bank licensed to operate in the State of Kuwait, in accordance with the form set out in the Instructions to Bidders.
4. The period of validity of bids and the mechanism for extending it.
5. That the financial proposal be priced in the official currency of the State of Kuwait at the time of its submission.
6. The documents and information that the Investor submitting a bid is required to attach to the proposal.
7. The documents required from any Consortium submitting a bid, including a copy of the Consortium agreement certified by the official authorities, and a statement of the person authorised to represent the Consortium and the instrument of his authorisation.
8. A statement of the amount of the performance bond required to be submitted by the Contracting Investor, which shall be submitted in the form of a letter of guarantee issued or confirmed by a bank licensed to operate in the State of Kuwait, together with a statement of the wording of this bond, the period within which it shall be submitted after the selection of the Winning Investor, its period of validity and the mechanism for extending it.
9. A statement of whether the PPP Project is tendered for investment on the basis of a Concept approved by the Higher Committee as an Initiative or a Distinguished Project, and a statement of the percentage set by the Higher Committee as a preference margin, or the percentage allocated to the proposer of the accepted Concept of the shares of the public shareholding company to be incorporated to implement the project.
10. Any other terms that are necessary, in accordance with the nature of the project and best professional practice, to complete these instructions.

Article 24

Terms of Reference
Taking into account the nature of each PPP Project, the type of partnership and the PPP Model, as well as the approved method of competition and the considerations specific to the method of its implementation, the request-for-bids document shall include the following elements:
1. The detailed information available on the project, including its specifications, the proposed site for its implementation and the characteristics of the services required from it.
2. The technical, financial, legal, environmental and other requirements necessary for the submission of proposals and the implementation of the project.
3. The formula approved by the Higher Committee as part of the Project Tender Documents on the basis of which the project is awarded, which shall be set in light of the relative technical, financial and legal weights and the allocation of risks in the project.
4. The area of the land allocated to the project – if any – and the value of the right of usufruct thereof, and any assets existing thereon or that the Public Entity will provide to the Contracting Investor, and whether any consideration will be collected in return for the usufruct thereof.
5. A statement of the costs of preparing the studies and the amounts due to the Concept proposer – if any – and other costs that the Contracting Investor is required to pay to the Authority at Financial Close.
6. The incentives and exemptions to be granted to the project.
7. A statement of the criterion for determining the essential, non-negotiable matters (Material Deviation) that would affect competition between the accepted bids.
8. A statement of the number of envelopes comprised in the bid, provided that the envelopes are separate, signed by the Investor or its legal representative, and marked on their face with an indication of their contents.
9. Any other terms that are necessary in accordance with the nature of the project.

Article 25

Contract Document
Taking into account the nature of each PPP Project, the type of partnership and the PPP Model, as well as the approved method of competition and the considerations specific to the method of its implementation, the PPP Agreement Document shall include, in particular, the following:
1. The PPP Agreement.
2. The land lease agreements, if any.
3. The Letter Agreement.
4. The Substitution Agreement.
5. The Confidentiality Agreement.

Article 26

PPP Agreement
The PPP Agreement shall include, in particular, the following:
1. The subject of the agreement.
2. The term of the agreement, including the construction period and the investment period.
3. The obligation to construct the project.
4. The specification of the services and the charges for them.
5. Representations, warranties and undertakings.
6. Operating procedures.
7. Testing and the evaluation mechanism.
8. Operation of the project.
9. The accounting method and the currency of payment.
10. Insurance.
11. Records and reports.
12. Assignment.
13. The cases in which the agreement is rescinded without the need for notice or a court judgment.
14. Liquidation of the project and termination of the agreement in the public interest.
15. The bases of compensation.
16. The approved language of the agreement.
17. Methods of dispute resolution.
18. The right of usufruct of any in-kind assets provided by the State.
19. The technical, environmental, financial and economic requirements of the project.
20. Security and safety conditions.
21. Any other terms governing the relationship between the parties and their obligations.

Article 27

Bases for Collecting the Consideration for Services
The PPP Agreement shall include the bases on which the Project Company collects the consideration for the services it provides or the works it performs, by both or either of the following two methods:
1. Through the Public Entity, in return for:
(a) Providing the service in conformity with the agreed performance standards.
(b) Use of the service or infrastructure provided by the PPP Project.
(c) A minimum level of expected demand for the service or infrastructure provided by the PPP Project.
(d) Completion of specified, agreed stages of implementation, operation or infrastructure, provided that they are agreed upon in the approved timetable for the implementation of the project.
(e) Achievement of an internal rate of return specified in the Project Tender Documents.
2. From beneficiaries of the service or infrastructure other than Public Entities, within the framework of the mechanism for calculating the consideration specified in the PPP Agreement.

Article 28

Method of Determining the Value of the Consideration
The PPP Agreement shall specify the method of calculating the consideration that the Project Company receives for the service or for the infrastructure works implemented, in accordance with the nature and requirements of the PPP Project, and the following considerations and bases shall be taken into account in determining this consideration:
1. That the prices of the services and works provided through the PPP Project be appropriate in light of the considerations relating to their level of quality.
2. Taking into account the interest of the consumer and the prices of similar services and works if economic prices are applied to them.
3. Achieving an appropriate financial return for the Investor, in accordance with the bases set out in the feasibility study of the project and on the assumption that the necessary efficiency is achieved in the implementation and operation of the project.
4. That, when determining the prices of the services and works provided by the project – where they are specified in the agreement – inflation rates be taken into account, and that these prices be linked to clear adjustment indicators throughout the term of the agreement to address debt service and exchange rates if this would adversely affect the Investor’s returns or disturb the financial balance of the agreement, so that the price of the service and its updating are automatic and agreed upon in the agreement documents.
5. Any support provided by the State to the project.

Article 29

Methods by Which Public Entities Collect Any Consideration from the Investor
The Public Entities shall collect from the Project Company the consideration for any in-kind assets they provide to the Investor for use in the project, observing the following rules:
1. Collecting the appropriate value for those assets, taking their opportunity cost into account.
2. The level of the rate of financial return expected to be achieved from the project.
3. The nature and requirements of the project.
4. The effects of the value of the consideration collected for the in-kind assets provided by the State and of the land rent on the price of the service, for the purpose of taking the appropriate decision regarding its value.
5. The total cost of the project.
6. The internal rate of return expected from the project.
The Higher Committee, upon the recommendation of the Authority, shall determine the consideration that the Public Entity collects from the Project Company in return for the assets it provides and the project land – if any – in light of any of the foregoing bases that are consistent with the nature of the tendered project.

Article 30

Exemptions and Incentives
The Terms of Reference shall include the incentives offered to Investors for submitting their proposals and the incentives enjoyed by the winning contractor, including exemption from income tax or any other taxes, customs duties or any other fees, on the basis of a decision of the Higher Committee, in addition to the other incentives provided for in Law No. 116 of 2013 on the Promotion of Direct Investment in the State of Kuwait.
The Authority, in cooperation with the Public Entity, shall propose the incentives and the tax and customs exemptions that are consistent with the nature of the project when preparing the Project Tender Documents, and shall prepare a report thereon to be submitted to the Higher Committee to take the appropriate decision thereon.
The decision of the Higher Committee issued in this regard shall be binding on all State authorities competent to implement it.

Article 31

Invitation to Submit Bids
The Authority, in cooperation with the Public Entity, shall invite the Qualified Investors to obtain the Project Tender Documents and submit their bids. The invitation shall be made by publication in the Official Gazette and in at least two Kuwaiti daily newspapers, in both Arabic and English, and in other local or international media through which advertising is consistent with the nature of the project, as well as by publication on the website of the Authority, as the Authority deems appropriate for this purpose.
The invitation to submit bids shall include the following:
1. The deadline for obtaining the Project Tender Documents and papers.
2. The Public Entity or Entities concerned with which the PPP Agreement and its annexes will be signed.
3. The investment period.
4. The location of the project, and a statement of whether it is established on land owned by the State.
5. The consideration for obtaining the Project Tender Documents and the manner of obtaining them, after the conclusion of the confidentiality agreement.
6. The final deadline for submitting bids, counted from the date of publication of the invitation in the Official Gazette, specified by date and hour, and the method and place of their submission, taking into account the nature of each project.
7. The customs or tax incentives and exemptions enjoyed by the project.
After the approval of the Higher Committee, bids may be submitted by a means of electronic communication that provides the necessary confidentiality.

* Clause (6) replaced by Decree No. 39 of 2016 (Kuwait Al-Youm, Issue No. 1277, 28 February 2016).

Article 32

Inquiries Relating to the Project Tender Documents
The Authority, in coordination with the Public Entity, may request clarifications from those who have submitted qualification requests or bids regarding any query or ambiguity it may find in these documents, and it may, at any stage of the tendering, request additional information, data or documents confirming the capacity of the Investor to implement the project; the clarifications and documents submitted by the Investor in this regard shall form an integral part of its bid.
Investors may submit inquiries regarding the terms of qualification or competition in accordance with the conditions and controls specified in the Qualification Documents and the Project Tender Documents.

Article 33

Amendment of the Terms of Reference
The Authority, in coordination with the Public Entity, may amend the Tender Documents before the deadline for submitting bids, provided that sufficient time is allowed for the Qualified Investors to prepare their bids.
Such amendments shall be issued by an addendum signed by the Director of the Authority and approved by the Higher Committee in light of the proposal of the Competition Committee. The Authority shall invite the Qualified Investors who have purchased the Tender Documents to receive that addendum free of charge, and these addenda shall be deemed an integral part of the Tender Documents.
In all cases, these amendments shall not prejudice the acquired rights of the Qualified Investors.

Article 34

Tendering the Project in Two Stages
The Higher Committee may, upon the recommendation of the Authority, decide to tender the project in two stages in accordance with the nature and requirements of the project, and to conduct a competitive dialogue as a first stage for the purpose of obtaining clarifications regarding the elements of the technical and financial proposals submitted at this stage; final bids shall be submitted in the second stage.
Where the project is tendered in two stages, the Authority, in coordination with the competent Public Entity, shall, in the first stage, prepare the Tender Documents, which shall include the following:
1. General information on the project and its characteristics, or its performance standards and indicators, or its financing requirements, or the basic contractual arrangements relating to it, and any other information the Authority deems necessary.
2. Requiring the Investor to submit its proposals regarding its comments on the contents of the project documents, to be examined by the Competition Committee and used as guidance in the stage of preparing the final Project Tender Documents.
3. That the initial proposals not include any financial information or data regarding the competitive prices that the Investor will offer; the proposals submitted at this stage shall be limited to technical, legal, environmental or general financing matters and other matters permitted by the Terms of Reference.
After receiving, examining and studying the initial proposals, the Authority may invite the Investors who have submitted proposals to conduct a competitive dialogue with them regarding the proposed comments on the components of the project or its initial tender terms. It is a condition that the Investors, if invited, be granted equal dialogue periods among themselves.
The Authority, in coordination with the Public Entity, shall review the project specifications, the proposed performance standards and indicators, the financing arrangements, the contractual terms and other matters on which a competitive dialogue has been conducted, in order to determine which of them are consistent with the public interest, in preparation for introducing the appropriate amendments to the final Project Tender Documents, which are prepared by the Competition Committee in accordance with the rules provided for in the Law, its Regulations and the Guidance Manual. The Authority shall review and study these amendments, prepare the appropriate recommendations thereon and submit them to the Higher Committee to consider approving them as the Project Tender Documents.

Article 35

Elements of the Bid Submitted by the Investor
Taking into account the nature of each PPP Project, the bid shall be submitted comprising separate envelopes in accordance with the Tender Documents. In the case of post-qualification, the bid shall include a qualification request in a separate envelope. The bid shall include, in particular, the following:
1. Identification of the legal representative of the qualified individual Investor, or of the qualified Consortium consisting of more than one Investor, and identification of a representative of that Consortium who, under official powers of attorney from the members of the Consortium, shall represent them in the qualification procedures, together with a certified copy of the agreement concluded between the members of the qualified Consortium.
2. The technical proposal, which shall include:
(a) The proposed means and technical method for providing the public service or implementing the project structure in accordance with its tender terms and documents.
(b) The proposed arrangements relating to the design of the project and the implementation of the construction works required to achieve its objectives, as well as the provision of any equipment or installations required for that purpose.
(c) The proposed timetable for the implementation of the project.
(d) The technical and administrative units competent to implement and operate the project, and the main subcontractors proposed to be engaged to implement the works.
(e) The information, data and proposed mechanism for observing the standards of environmental protection, security and safety.
3. The financial proposal, which shall include:
(a) The expected costs of preparing the designs of the project and of its construction, operation and maintenance.
(b) The cost and sources of financing the project.
(c) The expected investment return from the project.
(d) The financial cost to the State in light of the approved formula for awarding the project.

Article 36

Receipt and Safekeeping of Bids
Bids shall be submitted to the Authority by a person authorised to submit them on behalf of the entity he represents. The Authority shall make the necessary arrangements to receive the bids containing the proposals and to keep them in a secure manner that ensures their preservation, and they may not be opened except when the Competition Committee convenes for this purpose.
The bid shall comprise the technical proposal, the financial proposal and the Investor’s bid bond in accordance with the provisions of this Law and consistent with the Project Tender Documents, and the qualification request in the case of post-qualification.
A bidder may not withdraw or amend its bid after the expiry of the deadline for submitting bids. Before that, it may withdraw from the Competition, or submit an alternative proposal in a new envelope stating that it is a new proposal, provided that it is submitted in the same manner prescribed for submitting the proposal and before the expiry of the final deadline for submitting proposals.

Article 37

Evaluation of Proposals
The Competition Committee shall evaluate the technical proposals on the basis of the criteria or weights provided for in the Project Tender Documents, before considering the financial proposal.
A bid that is not accompanied by the bid bond specified in the Tender Documents shall be excluded.
The evaluation of the technical proposal requires that the following be met:
1. The technical soundness of the proposal, including the technology and techniques used, in conformity with the requirements provided for in the Project Tender Documents.
2. Compliance with the environmental standards provided for in the Tender Documents.
3. Submission of evidence of the quality of the services or facilities to be implemented in the project and their conformity with the standards and performance indicators provided for in the Terms of Reference.
4. Consideration of the degree of consistency between the basic data of the elements of the project as set out in the technical proposal and the financial proposal.
5. The suitability of the proposed timetable for the implementation of the project and its effects.
The Competition Committee shall submit a report on the evaluation of the technical proposals, accompanied by its recommendation, to the Authority for consideration of its approval. The Authority shall notify the Investors whose technical proposals have been accepted, as well as those who have been excluded, and the latter may file a grievance with the Grievances Committee in accordance with the rules provided for in Chapter Ten of these Regulations.

Article 38

Session for Opening the Financial Envelopes
The Competition Committee shall allocate a public session for opening the financial envelopes of the proposals submitted by the Investors, to which the qualified Investors who have submitted a proposal for the tendered project shall be invited. A representative of the competent Public Entity or Entities shall also be invited to attend this session.
Immediately upon the opening of the public session, the Committee shall record the attendance and verify the integrity of the financial envelopes, and shall prepare minutes thereof.
The financial envelopes shall be opened in the alphabetical order of the bidders, and the value of each bid shall be read aloud and recorded in a schedule prepared for this purpose. If more than one price is stated in a single bid, the higher value shall be relied upon. This shall not prejudice the right of the Authority to exclude that bid in accordance with the conditions provided for in the Project Tender Documents.

Article 39

Determination of the Preferred Investor
The Competition Committee shall prepare a report evaluating the technical and financial proposals in light of the results of the public session, in preparation for submitting it to the Authority, including its recommendation determining the Preferred Investor and the next-ranked investor in terms of the preference of the bids submitted.
In light of the recommendation submitted by the Competition Committee, the Authority shall determine the Preferred Investor as the submitter of the best bid in accordance with the Terms of Reference on the basis of which the project was tendered. The Authority shall notify the investor concerned and the Public Entity of the investor determined as the Preferred Investor, in preparation for negotiating with it.
The Authority shall also notify all other investors who passed the financial bids stage of their ranking. The Authority shall retain the bid bond of the Preferred Investor and of the next-ranked investor, and it may release the bid bonds of the other investors unless it deems fit to retain them until the Winning Investor is selected, the term of the submitted bond expires, or the investors refuse to renew or extend their bonds in accordance with the conditions set out in the Project Tender Documents.

Article 40

Receipt of a Single Bid
If a single proposal is received, or if the other proposals are not eligible for consideration because they violate, or fail to satisfy, any of the conditions for participation in the Competition, the Competition Committee shall prepare minutes to that effect, to be submitted to the Director General of the Authority in preparation for presenting them to the Higher Committee together with the recommendation the Director General deems appropriate. The Higher Committee may decide to accept the single proposal, to re-procure the project, to make any amendment it deems appropriate to the Project Tender Documents, or to cancel the investment opportunity without any liability whatsoever.

Article 41

Procedures Where the Two Best Proposals Are Equal
Where two bids are equal such that each represents the best of the proposals submitted in accordance with the conditions of the Competition, the bid that includes the better technical proposal shall prevail in cases where the technical proposal carries weight in the project award formula.
Otherwise, upon the recommendation of the Authority and the approval of the Higher Committee, the competitors may be requested to submit two new financial proposals, within the limits of the proposal each of them submitted, in new envelopes. A public session shall be designated for opening them, to which the two submitters shall be invited, and the value of each proposal shall be read aloud. The Competition Committee shall prepare a report to that effect, to be submitted to the Authority in preparation for referring it to the Higher Committee to take its decision in this regard.
This shall be without prejudice to the right of the Higher Committee to cancel the Competition or re-procure it without any liability whatsoever.

Article 42

Negotiation with the Preferred Investor
The Authority shall invite the Preferred Investor to negotiate its proposal, the details and clarifications it addresses, and its reservations on the Tender Documents. The Authority shall specify in its invitation the matters covered by the negotiations and the period of time set for the negotiation. The Competition Committee shall, under the supervision of the Authority, conduct the negotiation with the Preferred Investor, and it may seek the assistance of such experts, specialists and local or foreign consultancy firms as it needs, with which the Authority contracts to accomplish its work.
In all cases, these negotiations may not address any contractual terms that the invitation to submit bids considered non-negotiable terms or material deviations (Material Deviation) according to the Project Tender Documents. Nor may any amendment be made to the technical and financial conditions on the basis of which the bids were evaluated, and the negotiations may not result in an amendment to the conditions of the Competition such as to favour the Preferred Investor or relieve it of its responsibilities as provided for in the Terms of Reference within the risk allocation schedule set out in the Project Tender Documents.
These negotiations shall be recorded in minutes signed by the investor and the negotiating parties, and the clarifications and details submitted by the Preferred Investor in this regard shall be deemed an integral part of its bid.

Article 43

Failure of Negotiations
If the negotiations fail to reach a final agreement with the Preferred Investor on the Contract Documents, the Authority shall serve notice on it that the negotiations with it are being stopped and shall require it to submit its final position in writing by way of the best offer it is able to make. This offer shall be submitted to the Higher Committee, accompanied by the recommendation of the Authority, to take a decision thereon.
If this offer is not accepted, or if the Preferred Investor refrains from submitting the required offer within the time limit granted to it, the negotiations with it shall be terminated upon the approval of the Higher Committee.
The Authority shall invite the submitter or submitters of the other bids, according to their ranking, to negotiate with them for the purpose of reaching a final agreement with one of them on the terms of contracting, after the time limits for filing a grievance against the decision to terminate the negotiation have lapsed and the grievance has been decided.
The Authority may not resume negotiations with the submitter of any proposal with whom negotiations have previously been terminated, nor may it negotiate with two or more bidders at the same time, nor may it waive, in favour of the next Preferred Investor, a condition that was rejected in the negotiations with the former Preferred Investor.
In all cases, the Higher Committee may cancel the investment opportunity and re-procure it.

Article 44

Award of the Competition
The award of the Competition shall in all cases be subject to the approval of the State Audit Bureau in accordance with the provisions of Article (31) of the Law. The Project Tender Documents, the bid of the Preferred Investor, any negotiations conducted with it and the final terms agreed upon shall be submitted to the State Audit Bureau, and the validity period of the bid bond shall be taken into account in this case.
After obtaining the approval of the State Audit Bureau, the Authority shall, in cooperation with the Public Entity, prepare a comprehensive report on the matter for submission to the Higher Committee, together with its recommendation to approve the Winning Investor and invite it to sign the Letter Agreement.

Article 45

Letter Agreement
If an agreement is reached with the Preferred Investor, and after the Higher Committee approves the recommendation to select it as the Winning Investor, it shall be invited to sign, with the Public Entity concerned and the Authority, the Letter Agreement to which the agreed Contract Documents are attached. These documents, with the exception of the Confidentiality Agreement, shall not produce their legal effects or be binding on the State until the conditions precedent to contracting set out in the Letter Agreement have been satisfied.
After the Letter Agreement is signed, the Authority shall return the bid bonds to the bidders, with the exception of the second investor ranked next after the Preferred Investor, until the PPP Agreement is signed with the Winning Investor, or until the validity period of the bid bond submitted with the second investor’s proposal expires and it refuses to extend it.

Article 46

Invitation to Sign the Contract Document
The Winning Investor and the Public Entities concerned shall commence the procedures necessary to implement the terms of the Letter Agreement in preparation for signing the PPP Agreement as approved by the Higher Committee.
If the Winning Investor is a Consortium, it shall establish one or more Consortium Companies according to the needs of the project, in accordance with the laws of the State of Kuwait and on the basis of what was agreed in the Letter Agreement. Each member of the Consortium shall submit all certified official documents required by the Authority or the Public Entity to prove its ownership of shares in the company established, whether directly or indirectly, and the guarantees provided by the Winning Investor towards the State shall be taken into account in this case.
In projects whose value does not exceed (60) sixty million dinars, or in projects exempted under the provisions of Article (16) of the Law, the Consortium Company may sign the PPP Agreement and implement the project directly. In other cases where a public shareholding company is required to be established for the project, the Winning Investor shall own, through the Consortium Company or Companies, the shares allocated to the private sector therein.
The Public Entity concerned shall sign the Contract Document, including in particular the final PPP Agreement, the land lease agreements (if any), and the Substitution Agreement for replacing the investor in the event of its failure to perform its obligations. In cases where more than one Public Entity has been designated for the project, a special annex to the terms of contracting may be allocated to the other Public Entities in line with the nature of their competence and their contractual obligations arising from the project, to be signed by them.
The rights and obligations of the Winning Investor shall be transferred to the Consortium Company or the Project Company, as the case may be. The Authority shall notify the Public Entity competent for the project thereof in order to set the date for signing the Contract Document and to invite the Project Company to sign it.

Article 47

Procedures in the Event of Withdrawal of the Winning Investor or Its Failure to Sign
If the Winning Investor withdraws or fails to sign the Letter Agreement or the Contract Document, or to submit the required final bond, or to establish the Consortium Company or the Project Company, or to subscribe to the shares of the public shareholding company allocated to it upon incorporation, the Authority shall submit a report thereon to the Higher Committee together with the recommendation it deems appropriate in this regard. The Higher Committee may issue a decision inviting the next-ranked investor to negotiate with it and reach a final agreement with it in accordance with the same rules and procedures followed with the former Preferred Investor.

Article 48

Forfeiture of the Bid Bond
The Authority may forfeit the bid bond without the need for notice or a court judgment in the following cases:
1. If the investor withdraws or amends its proposal after the final deadline for submitting proposals and before the expiry of their specified validity period.
2. If the investor fails to respond to the Authority’s invitation to enter into negotiations with it regarding its proposal, or acts abusively in the negotiations, after the lapse of (15) working days from the date the invitation was sent to it at its address stated in its proposal.
3. If the Winning Investor fails to commence the procedures for establishing the Consortium Company or the Project Company or for arranging the financing necessary for the project in accordance with the agreed terms, or fails to cover its share of the subscription to the shares of the public shareholding company within the time limit granted to it by the Authority in accordance with the requirements and instructions of the Authority.
4. If the Winning Investor fails to satisfy any condition precedent agreed upon in the Letter Agreement in preparation for signing the PPP Agreement.
5. If the Winning Investor fails to sign the Letter Agreement within a period of (10) working days from the date of its notification to sign it at its address stated in its bid.
6. If the Contracting Investor fails to submit the performance bond or any other bond provided for in the Terms of Reference within the period specified in the PPP Agreement.
7. Any other cases regulated by the Project Tender Documents.

Article 49

Substitution Agreement and Conditions for Replacing the Contracting Investor
With the approval of the Higher Committee, and upon the request of the Public Entity supervising the project, the Authority or the Lenders, the Contracting Investor may be replaced by another investor who takes its place to complete the contract term, in accordance with the terms agreed in the Contract Document and the Substitution Agreement, and in particular in the following cases:
1. If the Contracting Investor fails to perform its contractual obligations set out in the PPP Agreement, or breaches any of the terms, and fails to remedy this within the period available to it in accordance with the conditions provided for in the PPP Agreement, in a manner that affects the proper running of the PPP Project.
2. If the Contracting Investor commits serious errors that affect the regular and continuous running of the project, or lead to its suspension, or expose it to being declared bankrupt.
The PPP Agreement shall include a condition providing for the prior consent of the Contracting Investor to the assignment of ownership of its shares in the Project Company and of the other assets owned by the Project Company, in order to ensure the continuity of the project and enable the new investor to perform its contractual obligations.

Article 50

Substitution Request
If the Lenders request the replacement of the Contracting Investor with another, they shall submit a request to that effect to the Higher Committee, specifying whom they consider a candidate to take the place of the Contracting Investor, provided that this shall not prejudice the responsibility of the Lenders for the candidate they nominate or for their obligations set out in the PPP Agreement signed for the implementation of the project.
The Authority shall, in coordination with the Public Entity concerned, prepare a report setting out the proposed obligations to ensure the continuity of the project, in preparation for submitting it to the Higher Committee to take the appropriate decision thereon.
If the replacement is requested by the Public Entity or by the Authority, the requesting party shall prepare a report to that effect, attaching new Terms of Reference for announcing the replacement request and attracting a new investor to implement the project, provided that the terms agreed with the Lenders in the Substitution Agreement are observed. In this case, the period for submitting bids shall not exceed one month from the date the replacement request is announced in the Official Gazette, and the new investor shall satisfy the same conditions that the Contracting Investor was required to satisfy when the project was tendered.
In all cases, the selection of the new investor shall be subject to the approval of the Higher Committee, and the new investor shall satisfy the same qualification conditions on the basis of which the project was tendered, or better.

Article 51

Distressed Project
A project shall be deemed distressed if the Project Company is exposed to circumstances beyond its control that would impair the proper running of the project and prevent that company from performing its contractual obligations in accordance with the agreed terms.
The Contracting Investor or the Project Company shall exercise the necessary diligence to address the circumstances that led to the distress and work to remove their causes. If this is not possible, they may request the Higher Committee to place the project under the direct management of a Public Entity, or of another specialised company to manage it for consideration under the supervision of the Authority, provided that the investment shall be in the name and for the account of the Contracting Investor, without prejudice to the obligation of the Project Company to compensate the Public Entity for damages resulting from any breach of the PPP Agreement.
The substitute investor undertaking the management shall bear compensation for damages resulting from fault in its management, and the management for consideration shall end as soon as the causes of the project’s distress cease to exist or if the project is liquidated.

Chapter Seven – Concepts Submitted by the Private Sector

Article 52

Submission of a Concept through a Preliminary Feasibility Study
Any person, natural or legal, Kuwaiti or foreign, may submit to the Authority a Concept that includes a request to implement a project under the PPP Model, and this request shall be accompanied by the following:
1. A preliminary feasibility study showing the elements of the project and the initial estimates of its costs and benefits in accordance with the provisions of the Law and these Regulations and in line with the directions contained in the Guidance Manual.
2. Information about the Concept proposer and its experience and its administrative, technical and financial capabilities to implement the project or part thereof.
3. The monetary consideration set by the Higher Committee in return for studying the Concept and analysing the elements of the preliminary feasibility study.

Article 53

Preliminary Study of the Concept
The Authority shall correspond with the Public Entity or Entities with whose competence the Concept is consistent, to coordinate with them on completing the requirements of the feasibility study submitted by the Concept proposer.
The Public Entities shall provide the Authority with their responses as a matter of urgency, within no more than (20) twenty working days for matters requiring economic and financial analyses, and ten working days for matters not requiring such analyses.
Immediately upon receiving the responses of the Public Entities, the Authority shall study the Concept, prepare a report thereon accompanied by its recommendation, and submit it to the Higher Committee.

Article 54

Decision of the Higher Committee
The Higher Committee shall issue a decision accepting the Concept and considering it an Initiative, or accepting it and considering it a Distinguished Project, or rejecting it, in light of the recommendation of the Authority based on the feasibility study submitted by the Concept proposer.
The Authority shall notify the Concept proposer of the decision of the Higher Committee within five working days from the date of its issuance, and the proposer may file a grievance before the Grievances Committee if its idea is rejected.
The decision of the Higher Committee accepting the Concept shall include, in particular, the following:
1. Identification of the Concept proposer and the type of the Concept, whether an Initiative or a Distinguished Project.
2. The name of the proposed project and the service it provides.
3. The approved feasibility study costs.
4. The Public Entity.
5. The estimated value of the project.
6. The rights of the Concept proposer that have been approved, as the case may be, and the preference it enjoys (if any), or the percentage of the shares of the public shareholding company allocated to it (if any).

Article 55

Preparation of the Final Feasibility Study
Upon being notified of the preliminary acceptance of the Concept, its proposer shall:
1. Submit a final feasibility study of the project covering all technical, financial, environmental and other matters specified by the Authority in line with the nature of the project, the provisions of the Law and the Guidance Manual, within a period not exceeding (6) six months, which may be extended with the approval of the Authority.
2. Pay the monetary consideration in return for the analysis of the final feasibility study.
3. Submit a request specifying the percentage of the shares of the public shareholding company it wishes to own, which shall be allocated to the Concept proposer, not exceeding (10%) of the shares of the company to be established to implement the project, in cases where the value of the project exceeds (60) million Kuwaiti Dinars, without prejudice to its right to withdraw this request in whole or in part within a maximum period of one month from the date of publication of the announcement tendering the project for investment in the Official Gazette.

Article 56

Preparation of the Tender Documents and Ensuring Confidentiality
The Authority shall, in cooperation with the Public Entity or Entities specified in the decision of the Higher Committee, prepare the Project Tender Documents in accordance with the provisions of the Law, in a manner that ensures the non-disclosure of the confidential technical, economic and financial information of the project submitted by the Concept proposer, in particular the technical designs of the project, any technology proposed for its implementation, and any other information of a confidential nature.
It is a condition that the principle of confidentiality shall not prejudice the tendering of the project in accordance with the principles of free competition, such that, when the project documents are prepared, they include sufficient information or data to prevent the Concept proposer from monopolising the project and to ensure competition for it when tendered in accordance with the standards of transparency and fairness.

Article 57

The Initiative
Upon the acceptance by the Higher Committee of the feasibility study submitted by the Concept proposer and its consideration as an Initiative, its proposer shall have the following rights:
1. Recovery of the feasibility study costs as approved in the decision of the Higher Committee, plus 20% of this cost or two hundred thousand dinars, whichever is less. This amount shall be stated in the Project Tender Documents and shall be paid by the Project Company at Financial Close.
2. A preference of (5%) of the value of the best bid in favour of its bid that satisfies the conditions set out in the Project Tender Documents, unless the project is to be implemented through a public shareholding company.
3. Allocation of a percentage, determined by the Higher Committee, of the shares of the public shareholding company, not exceeding (10%) of its shares, at their nominal value plus the issue fee, to be deducted from the percentage specified for the investor referred to in Clause (2) of Article (13) of the Law, if the project is implemented through a public shareholding company. The Concept proposer considered as an Initiative shall promptly subscribe to the percentage specified for it within a time limit not exceeding (15) fifteen working days from the date of its notification thereof. If it does not subscribe to all or part of it, the provision of the aforementioned Clause shall apply thereto, without prejudice to the right of the Authority to forfeit the bond it submitted.

Article 58

Distinguished Project
The Concept proposer whose concept is accepted as a Distinguished Project shall have the right to recover only the costs of the feasibility study, as approved in the decision of the Higher Committee, plus 10% of their value as approved by the Higher Committee or one hundred thousand dinars, whichever is less. This amount shall be stated in the Project Tender Documents and shall be paid by the Project Company at Financial Close.

Chapter Eight – Procedures for Establishing Project Companies

Article 59

Establishment of the Consortium Company
The Consortium that wins a PPP Project shall establish one or more Consortium Companies in accordance with the laws of the State of Kuwait, according to the needs of the project. Where a public shareholding company is established, the Consortium Company shall own the Investor’s share in the public shareholding company that was offered in accordance with the provisions of the Law, and the rights and obligations of the Winning Investor shall devolve upon it.

Article 60

Establishment of a Kuwaiti Public Shareholding Company
The Winning Investor shall establish the Project Company for a PPP Project whose total cost does not exceed (KWD 60 million) sixty million Kuwaiti Dinars.
After the project has been tendered and the Winning Investor has been determined, the Authority shall establish a public shareholding company for a PPP Project whose total cost exceeds (KWD 60 million) sixty million Kuwaiti Dinars, and shall notify the Ministry of Commerce and Industry of the trade name chosen for the company; it shall also determine the company’s approved capital.
The company’s shares shall be distributed according to the following percentages:
1. A percentage of not less than (6%) and not more than twenty-four percent (24%) shall be allocated to the Public Entities entitled to own shares.
2. A percentage of not less than twenty-six percent (26%) of the shares shall be allocated for subscription by the Winning Investor in accordance with the provisions of the Law and the Regulations, taking into account the percentage provided for in Article (20) of the Law and allocated to the proponent of the Initiative, if any.
3. Fifty percent (50%) shall be allocated for public subscription by living Kuwaitis whose names are registered in the records of the Public Authority for Civil Information on the date of the invitation to pay the value of the shares, in accordance with the provisions of the Law and these Regulations.

Article 61

Establishment Procedures
The establishment of the public shareholding company and of the Consortium Company – if any – shall be subject to the provisions of Decree-Law No. (25) of 2012 Promulgating the Companies Law and its amendments, and to the laws in force and the procedures adopted by the Ministry of Commerce, insofar as they do not conflict with the provisions of the Law.

Article 62

Mechanism of Subscription by the Authority
The Authority shall write to the Public Entities that have expressed their wish to invest in the projects that are tendered by the Authority and for whose implementation it establishes a public shareholding company, in order to determine the percentage of shares that these entities wish to own out of the share allocated to Public Entities in accordance with the Law.
In the cases in which the Law has entrusted the Authority with subscribing on behalf of the Public Entities, the Authority shall subscribe for the portion of shares allocated to these entities, at the percentage of the value of the shares agreed in the memorandum of association and the shareholders’ agreement of the public shareholding company, which are signed by the founding partners. The shares shall be registered in the name of the Authority, with an indication in the prospectus of their allocation to the Public Entity that requested to own them, upon their transfer in accordance with the provisions of the Law.
The Authority shall ensure that the Winning Investor or the Consortium Company – as the case may be – has paid the subscription value for the percentage allocated to it of the value of the shares it won in the public shareholding company allocated to government entities.
After completion of the establishment procedures, the convening of the general assembly and the preparation of the prospectus for the public, the Authority shall subscribe on behalf of citizens at the percentage of the value of the shares allocated to them as agreed in the memorandum of association and the shareholders’ agreement of the public shareholding company, and the Authority shall supervise the completion of the company’s capital, between the issued capital and the authorised capital, in accordance with the terms agreed in the memorandum of association and the articles of association.

Article 63

Transfer of Shares
As soon as the project is fully operational, the Authority shall verify that the company’s authorised capital has been finally completed and shall value it in line with the actual construction costs. The authorised capital of the public shareholding company may not be amended except after the approval of the Higher Committee based on a recommendation of the Authority. This shall be in preparation for inviting the Public Entities and citizens to pay the value of the shares allocated to them.
If the Higher Committee approves, the Authority shall do the following:
1. Invite the Public Entities and the citizens on whose behalf the subscription was made to pay the value of this subscription to the State, including the nominal value of the share and the issue fees, without any other amounts. The invitation shall be made in the Official Gazette and the Kuwaiti media specified in the invitation decision, and shall state the total amount payable for each share, the place of payment, the accepted means of payment and the final deadline for payment, provided that the subscription value is paid within a period not exceeding sixty days calculated from the first day of the month following the month in which the invitation to subscribe was made.
2. The shares shall be transferred into the names of each of the Public Entities and citizens who have paid the value of the portion allocated to them, upon settlement and receipt of the value according to the total amount payable for each share, at the place of payment, by the specified means of payment and within the period specified in the announcement.
The Clearing Agency shall issue the receipts evidencing ownership of the shares in cooperation and coordination with the competent authorities.
The right of the Public Entities and citizens to subscribe for the company’s shares shall lapse with respect to the shares whose value has not been paid within the aforementioned deadlines and in accordance with the conditions set out in the invitation.

Article 64

Shares Whose Value Has Not Been Paid
The Authority shall offer the shares whose value has not been paid within the deadline referred to in the preceding Article, as well as fractions of shares resulting from the distribution process, for sale at their market value to Public Entities other than those whose right to subscribe has lapsed under the preceding Article, or to the Investor, or shall offer them on the stock exchange, as the Authority deems appropriate. The proceeds from the sale of these shares in excess of the nominal value of the share shall devolve to the State Treasury.
If the shares cannot be sold in accordance with the preceding paragraph, these shares shall remain registered in the name of the Authority on behalf of the State until they are disposed of.
The Authority shall have full shareholder rights in the shares for which it has subscribed, whether at establishment and until their transfer, or thereafter with respect to the shares whose value has not been paid. The Authority’s ownership of and subscription for the company’s shares, or its management of them on behalf of third parties, shall not result in the funds of this company being considered public funds under Law No. (1) of 1993 on the Protection of Public Funds.

Chapter Nine – Expired Contracts

Article 65

In cooperation with the competent Public Entity, the Authority shall, within a suitable period of not less than two years before the expiry of the investment period, evaluate the project in order to determine the consideration to be obtained by the State or the Investor, as the case may be. For this purpose, it may seek the assistance of whomever it deems appropriate, including local or foreign consultancy firms, to prepare a comprehensive study of the project and its Tender Documents, and it shall submit its recommendations in this regard to the Higher Committee.

Article 66

The Higher Committee shall issue a decision on the re-procurement of the project in light of the recommendations submitted to it by the Authority during the last year of the investment period. The Higher Committee may decide that the Public Entity shall manage, or manage and develop, the project directly, or that the project’s activity shall be terminated.

Article 67

The Higher Committee shall assign the Authority, in cooperation with the competent Public Entity, to tender the management, or the management and development, of projects one year before they devolve to the State, through a Competition in accordance with the nature of the project, and the Committee shall issue the necessary decisions regarding the procedures for tendering the project.

Article 68

Projects shall be re-procured and awarded after the expiry of the PPP Agreements in accordance with the provisions of these Regulations.

Article 69

The Investor whose agreement has expired shall have preference in the award if it participates in the Competition, in accordance with the following schedule of percentages:

Type of investor whose agreement has expired	Percentage
Projects in which no public shareholding company is established	5% of the best bid
Projects in which a shareholding company is established	10% of the best bid

Chapter Ten – Procedures for Considering Complaints and Grievances

Article 70

Grievances and complaints submitted by concerned parties regarding any procedure or decision issued in violation of the provisions of the Law and its Regulations shall be heard before the Grievances Committee established by a decision of the Council of Ministers in accordance with the provisions of Article (32) of the Law.
The complaint or grievance shall be submitted to the Committee within (15) fifteen days from the date on which the concerned party is notified of the decision or becomes aware of it.
The Committee shall have a Secretary who shall receive the complaints or grievances submitted to the Committee and prepare registers to record them together with the memoranda and documents attached to them. The Secretary shall also record the minutes of the Committee’s meetings, follow up the implementation of the decisions issued by it, and perform such other work as the Committee assigns to him.
The Secretary shall register the complaint or grievance immediately upon its receipt in a register prepared for this purpose and present it to the Chairman of the Grievances Committee no later than the end of the working day following the date of his receipt of the complaint or grievance; within the same period, he shall also notify the Higher Committee or the Authority of the submission of the complaint or grievance.
The Secretary shall stamp a copy of the grievance or complaint with a stamp showing the date of its submission and shall give the person submitting it proof of its receipt.

Article 71

The register provided for in the preceding Article may be an electronic register, in which case this register shall meet the conditions set out in Article (20) of Law No. 20 of 2014 on Electronic Transactions. The notification of the Higher Committee and the Authority of the submission of the complaint or grievance may also be made by email or fax, in which case it shall be sent to the email address and fax number specified by the Committee and the Authority.

Article 72

The grievance or complaint shall be in writing and shall include the following particulars:
1. The name, capacity, profession and address of the complainant or grievant, including the civil ID number or, for companies, the commercial registration number, and the telephone, fax and email details.
2. The substance of the complaint or grievance, and the documents supporting it.
3. The date of issue of the decision against which the grievance is made, and the date on which the grievant was notified of it or became aware of it.
4. The signature of the complainant or grievant, or of his legal representative, on the complaint or grievance.
5. The date of submission of the complaint or grievance.
6. The name and address of the person against whom the complaint or grievance is made, including telephone, fax and email details.

Article 73

The Grievances Committee shall hold its meetings whenever necessary, at the invitation of its Chairman and under his chairmanship. A meeting shall be valid if attended by at least four members, provided that they include the Chairman or his deputy. A member of the Committee who is absent from two consecutive meetings shall be deemed to have resigned by operation of law if he does not submit an acceptable excuse.

Article 74

The Grievances Committee shall consider the complaint or grievance submitted to it, and it may request from the concerned parties such clarifications and documents as it deems fit; it may also seek the assistance of such specialists as it deems fit to provide it with a technical opinion on a matter on which the decision on the complaint or grievance depends.
It shall issue its decisions or recommendations by a majority of the Committee members present; in the event of a tie, the side on which the Chairman voted shall prevail. The Committee’s deliberations shall be confidential.

Article 75

The Grievances Committee shall issue a reasoned recommendation on the complaint, or a reasoned decision ruling on the grievance, within a period not exceeding fifteen working days from the date of submission of the complaint or grievance.
The Secretary of the Committee shall notify the Authority, the Higher Committee and the complainant or grievant of the recommendation or decision of the Grievances Committee issued on the complaint or grievance, as the case may be, within a period not exceeding three working days from the date of issue of the recommendation or decision. The Secretary shall also follow up the implementation of the decisions or recommendations issued by the Authority.

Article 76

The Higher Committee may take such action as it deems appropriate regarding the recommendations or decisions issued by the Grievances Committee on complaints and grievances, and the decision of the Higher Committee in this regard shall be final.

Issued on 18 March 2015 and published in the Official Gazette Kuwait Al-Youm on 29 March 2015.