The Aqaba Development Corporation has formally cancelled the PPP tender process and negotiations have ended with preferred bidder, the Aqaba Gateway Group.
The news will have come as a blow to the consortium – led by KGL Investment Company and Kuwait Gulf Link - who were looking at a 30-year contract with land and port rights under a long-term lease. The contract was scheduled to be signed in August 2009 but it is reported that they struggled to secure financing.
Although the losing bidders, a SPV headed by Bouygues Travaux Publics – was named as ‘alternate preferred bidder’ - the new port will be funded using the authority’s financing resources such as its corporate bonds.
Jonathan Brufel, Middle East head of infrastructure at Norton Rose, says that banks’ unwillingness to provide the 20-year-plus loan tenors "has led to a number of Middle East PPP projects being cancelled."