A consortium led by the Mohammed Abdulmohsin Al Kharafi Group has been awarded a $390 million build-operate-transfer (BOT) project for the Sulaibiya Wastewater Treatment and Reclamation Plant, executives said.

They said that Kharafi's alliance with Ionics and Bechtel of the US and the UK's United Utilities was awarded the contract by the Central Tender Committee after months of delays and complaints by other bidders.

Some of Kuwait's biggest trading families had formed consortia with leading Western firms specialised in the field in a competition that triggered internal frictions over the project which is expected to be worth more than $1 billion over its 30-year life. But the second bidder in the troubled tender vowed to file a legal case challenging the outcome, after earlier complaining to authorities that Kharafi had allegedly failed to meet requirements.

"They have tried very hard to block this deal, but in the end we prevailed," said a Kharafi consortium executive when asked about the legal threat.

International Projects Development Company (IPDC), a consortium which includes France's Vivendi Water, was a close second in the tender for the plant - the first international BOT project in Kuwait.

The project, under review since 1997, calls for building a reverse osmosis treatment plant to produce potable-quality water for non-potable usage. It aims to produce some 375,000 cu m of water per day in its first phase.

Kharafi had secured an edge in April 2000 with the lowest price to supply the state with potable treated sewage water for non-potable uses. The group later stressed that its bid "fully complies to the letter of the tender document".