KUWAIT: The National Assembly yesterday overwhelmingly passed the new public tenders law which governs the awarding of public projects worth billions of dinars every year. The Assembly also began debating the budgets and final accounts of government departments and authorities and approved five of them. It will continue debating budgets today.
The new public tenders law, which was described as historic as the process of its amendment took almost three decades, allows for the first time foreign companies to take part in public projects without a local agent as the case has been for over a half century. The law also reforms the process of awarding projects by allowing the Central Tenders Committee (CTC) to pick up the second lowest bid if it is technically better. CTC board has been expanded to seven members three of whom will be replaced after two years. The law also exempts oil rigs and exploration from the need for prior supervision and also exempts all military procurements from the same.
MP Saadoun Hammad protested at exempting the oil rigs and exploration saying the matter had already been rejected during the initial debate last week. MP Jamal Al-Omar said the State Audit Bureau should investigate in future Kuwait’s investments in Areva, the French nuclear and renewable energy giant, which Omar claimed Kuwait’s losses amounted to half a billion euros. Some reports have said that Kuwait Investment Authority (KIA) was considering pulling out of the investment.
The assembly then began debating the budgets of a large number of government departments and authorities and later the state budget before going into summer recess early next month. Head of the assembly Budgets Committee MP Adnan Abdulsamad said as a result of the sharp drop in oil prices, the budget deficit for the 2016/2017 fiscal year soared to around KD 12 billion. He said the committee tried to cut budget allocations but the cuts have been way below ambitions because of the lack of cooperation from ministries and departments and because the finance ministry did not make extra effort.
Later, MPs debated and approved the budgets and final accounts for the Development Bank, Public Authority for Housing Welfare, the Central Bank, Public Institution for Social Security (PIFSS) and the newly-established Transport and Roads Authority. A number of MPs criticized the budget and management of PIFSS whose previous director is facing legal action in a corruption scandal. MP Hamdan Al-Azemi said the Institution has been holding a huge amount of cash which does not serve its investments. He also said the current director worked under the previous one and as a result should not remain in his position.
Finance Minister Anas Al-Saleh said PIFSS is holding plenty of cash because if its conservative investment policy. He also said that the Public Prosecution informed him that no one of the current PIFSS officials is involved in the corruption scandal. A number of MPs also criticized the government’s failure to make any progress in diversifying sources of income away from oil.
In a related development, Minister of Social Affairs and Labor, Minister of State for Planning and Development Hind Al-Subaih said yesterday that the five year plan 2016-2020 has 32 mega projects costing KD 23.5 billion. She said that oil projects account for 42 percent of the cost of mega projects followed by 32.4 percent for transport. Subaih said the council of ministers has approved the development plan for the 2017/2018 fiscal year which has 165 projects costing KD 4.7 billion, in addition to 121 projects continuing from the previous years at a cost of KD 4.3 billion.