Housing authority planning to develop 45,000 units

Kuwait’s Public Authority for Housing Welfare (PAHW) is looking to appoint advisers on the development of two public-private partnership projects to develop thousands of new houses at an expected cost of several billion dollars.

The first project is for the development of a low-cost housing scheme, and the second is for the development of the Al-Khiran Housing City. Potential advisers have been asked to submit request for qualification (RFQ) documents by 18 April for the low-cost scheme, and by 1 May for the Al-Khiran city.

The Al-Khiran project involves the construction of a new city on the south side of Kuwait with 35,000 units. The low-cost housing project is for the development of around 10,000 units in Al Jahra governorate.

Although several financial, legal and technical advisory firms are understood to be considering bidding for the two roles, there is a lack of clarity as to why this process is not being done under the auspices of the Partnerships Technical Bureau (PTB), the body set up by Kuwait a few years ago to manage all public-private partnerships (PPPs) in the country.

It is also unclear if the PAHW process will be run according to the PPP guidebook that was written by the PTB to establish international best practice for the procurement of new projects developed in cooperation with the private sector.

“There are a lot of questions left unanswered about how this process will run, why the PTB is not involved, and what that means for what sort of government backstop these projects have,” says a source at one advisory firm considering bidding for the two projects.

The SR 1 billion contract is for the first phase of the Mutrafiah Housing Project at Jubail Industrial City, which includes the construction of 800 villas, the first of which will be available for occupancy in late 2014.

In its entirety, the Mutrafiah Housing Project will include 3,600 villas, representing a milestone in the Maaden Home Ownership Program (HOP) for employees.

All the villas and apartments are to be built at Jubail Industrial City within the confines of the Royal Commission lands which provide ready access to all the amenities required for a modern urban lifestyle, built in a green environment with close proximity to the sea.

“The HOP program demonstrates Ma’aden’s commitment to the security, health and well-being of its employees by helping to provide them with comfortable family housing,” said Maaden CEO Khalid Al-Mudaifer.

“Our employees are our partners in success; their dedication and performance will help Maaden achieve our vision of becoming a world class minerals enterprise. Today’s announcement is an investment in them.”

In addition to the Mutrafiah Project, another 256 family apartments at Jalmudah District in Jubail industrial City are currently under construction with the first batch of units targeted to be handed over by Q2 2013 for occupancy.

Maaden has appointed AECOM Arabia Ltd. as the Project Management Consultant to assist in managing their housing projects in Jubail Industrial City.

The ministry said that 17,600 units are currently being implemented. There is adequate land for the program.

He said the ministry has brought a foreign expert who will determine the mechanism to help distribute the housing units to individuals. Custodian of the Two Holy Mosques King Abdullah has ordered the construction of 500,000 housing units across the Kingdom as part of social welfare schemes. Construction is scheduled to be competed at the end of this year.

The housing units are intended to meet the needs of the lower income sector throughout the Kingdom.

Key criteria for receiving housing units stipulates that a beneficiary does not own a house, according to a ministry spokesman.

The foreign expert will finalize the distribution mechanism by the end of the year, he said. He said Saudi citizens will be given choice between loans provided by the Real Estate Development Fund (REDF), the housing unit or any other program approved by the Ministry.