The Public-Private Partnership System in the State of Kuwait, whereby a private investor invests in land owned by the state, in one of the projects proposed by the Public Authority for Public-Private Partnership Projects in cooperation with a public entity after signing a contract with him. During which the implementation, construction, development, operation or rehabilitation of a service or infrastructure project, and the provision of financing for it, its operation, management and development, during a specified period after which it shall be transferred to the state.
Partnership project company concept
It is the company that is established to implement one of the partnership projects that are put forward in accordance with the provisions of the Public-Private Partnership Law.
Establishment of public-private partnership projects companies
The project company shall be established by the Public Authority for Partnership Projects between the public and private sectors, or the winning investor with whom negotiations succeeded in reaching a final agreement to implement the project, and the main purpose of this company is to implement the announced project, to which the rights and obligations of the winning investor shall devolve.
Determining the capital of partnership projects companies and the type of partnership system
The capital with which a public-private partnership project company is established is determined on the basis of the offer submitted in the winning investor’s bid. The type of partnership system on the basis of which the project is being proposed and the method of offering and implementing the project are also determined, after the approval of the Higher Committee for Public-Private Partnership Projects on him.
Procedures for establishing companies for partnership projects between the public and private sectors
Establishment of the alliance company
In the event that an alliance wins a project, this alliance must establish one or more alliance companies in accordance with the laws of the State of Kuwait according to the needs of the project, in order to give the assembly the correct legal entity and give it the necessary legal personality that allows it to carry out its obligations, and the partnership contract is not signed Only after establishing the alliance company.
In the event that the project company is established as a public joint stock company, the consortium company owns the investor’s share in the public joint stock company that was put up in accordance with the provisions of the Public-Private Partnership Law, and the rights and obligations of the winning investor shall devolve to it.
Establishment of a Kuwaiti public shareholding company
First: Partnership projects that do not exceed sixty million Kuwaiti dinars
The Public Authority for Partnership Projects between the Public and Private Sectors, in cooperation with the Public Entity, presents partnership projects whose cost does not exceed sixty million Kuwaiti dinars in a competition between investors wishing to invest in the project. The winning investor or the winning consortium establishes the project company or the consortium company and owns its entire capital.
Second: Partnership projects whose cost exceeds sixty million Kuwaiti dinars
Partnership projects with a total cost of more than sixty million Kuwaiti dinars are put up for competition between investors wishing to invest in the project. After the project is launched and the winning investor is determined, the authority will establish a public joint stock company for the project, notify the Ministry of Commerce and Industry of the trade name chosen for the company, and determine the approved capital. The company’s shares are distributed according to the following percentages:
- A percentage of not less than six percent (6%) and not more than twenty-four percent (24%) shall be allocated to public authorities entitled to own shares.
- At least twenty-six percent (26%) of the shares shall be allocated for the winning investor to subscribe for in accordance with the provisions of the Public-Private Partnership Law, taking into account the percentage allocated to the owner of the initiative.
- Fifty percent (50%) shall be allocated for public subscription to 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.
Third: Projects whose value does not exceed two hundred and fifty million Kuwaiti dinars
As an exception from offering partnership projects whose cost exceeds sixty million Kuwaiti dinars for competition between investors and the authority to establish a public joint stock company for the partnership project, the winning investor may individually establish the project company and own all of its capital. For the number of founders and shareholders of the closed joint-stock company, unless the winning investor decides to establish a one-person company, and the same rule applies to the consortium company in the event that the parties to the alliance are less than the minimum required to establish and own the entire capital of the closed joint-stock company in accordance with the Companies Law.
And based on the decision issued by the Council of Ministers and the proposal of the Supreme Committee, to put up some development projects of a special nature whose total cost does not exceed two hundred and fifty million Kuwaiti dinars for competition between investors. If the total cost exceeds this amount, a Kuwaiti public shareholding company shall be established for the project.
Investment Term for Partnership Projects
The investment period that is proposed in accordance with the provisions of the Public-Private Partnership Law may not exceed fifty years starting from the date specified in the contract for the completion of construction and equipping work or for completion of development work. The use of the land in advance in the tender documents of these projects, and the period of use of the land is parallel to the period of the investment.
Dissolution of partnership projects companies and assignment of the project
The project company or the consortium company may not be dissolved, its legal form changed, or its capital reduced except after the approval of the Higher Committee for Partnership Projects between the public and private sectors.
The contracting investor may not assign the project or his share in it, in whole or in part, to others, or change the legal form of the project company or alliance, except after the expiration of an appropriate period determined by the Supreme Committee after operating the project to ensure its implementation, and the assignment entails that the assignee replaces the contracting investor In the project company or the consortium company in all its rights and obligations.
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