Acwa Power submits lowest bid for Saudi desalination plant

05 August 2018
Five bidders submitted prices for Rabigh 3 independent water project

The local Acwa Power submitted the lowest bid for the planned 600,000 cubic metres a day (cm/d) Rabigh 3 independent water project (IWP) in Saudi Arabia.

MEED reported in July that WEC had received five proposals for the Rabigh 3 project. The commercial prices were opened on 2 August.

Acwa Power submitted a levelised water cost bid of 199.2 halalas ($0.53) per cubic metre (hals/m3).

Acwa Power’s bid was marginally lower than the 202.1 hals/m3 price submitted by the consortium of Japan’s Marubeni, and the local Abdul Latif Jameel.

The full list of bidders and prices is:

  • Acwa Power (local), 199.2 hals/m3
  • Marubeni (Japan) / Abdul Latif Jameel (local), 202.1 hals/m3
  • Veolia (France) / Marafiq (local) / Amwal al-Khaleej (local), 211.7 hals/m3
  • Valoriza (Spain) / Al-Jumaih (local) / Al-Rashid (local), 228.8 hals/m3
  • Cobra (Spain) / FCC Aqualia (Spain) / Nesma (local), 261.6 hals/m3.

The client is aiming to sign the water purchase agreement with the successful bidder by 1 November, with financial close due by 31 December 2018. The scheduled commissioning date for the plant is December 2021.

The reverse osmosis (RO) desalination plant will have a capacity of up to 600,000 cm/d, expandable to 1.2 million cm/d. The project will have a 25-year concession period, with WEC as the offtaker, supported by a payment guarantee from the government.

The lead adviser for the IWP is the local Banque Saudi Fransi. The client has appointed Germany’s Fichtner Engineering and Consulting as the technical adviser, and the UK’s DLA Piper and Alderbrook as legal adviser and financial adviser respectively.

The client originally planned to tender and award a standard engineering, procurement and construction (EPC) contract to develop the plant. MEED reported in late 2015 that the Saline Water Conversion Corporation (SWCC) was planning to issue tender documents for the EPC deal by February 2016.

However, as with the vast majority of the kingdom’s major upcoming utilities projects, the plant will now be delivered through a public-private partnership (PPP) model as the kingdom seeks to reduce pressure on capital expenditure caused by lower oil revenues.

The Rabigh 3 desalination facility will service the cities of Jeddah, Mecca, Taif and surrounding villages.

SWCC is increasing the role of private investment in the desalination sector as part of the kingdom’s Vision 2030 initiative. It is also preparing to privatise existing assets.

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