‘A schedule has been drawn up that will see prequalications completed in time for RFPs [requests for proposals] to be issued in January 2004,’ says a project source. ‘We are then looking at about three months to go through the bidding process, with a preferred bidder selected by June. The target is for first power by the summer of 2006. This is a fast-track project.’

The speed of decision-making is expected to be accelerated by the active involvement of the Court of the Crown Prince in the project. It is acting alongside the Ministry of Finance & National Economy (MoFNE) and between them they have taken over the project from the various other government agencies previously involved, such as the Ministry of Electricity & Water (MEW), the Ministry of Oil and Bahrain Petroleum Company.

The first phase of the project will see the installation of 380-420 MW of generating capacity. No decision has yet been reached on whether the additional capacity will be installed in one or more further phases.

Although the project is likely to be initially approached as an IPP, the possibility remains that the 60 million gallons a day (g/d) of water capacity currently proposed under the Hidd III project may be transferred and the IPP could be converted into an independent water and power project (IWPP).

A decision is also awaited on how the offtake agreement will be shaped. ‘The likelihood is that it will be a familiar 20-year PPA [power purchase agreement] with MEW, but there is the possibility that a new offtaking entity will be established as part of the re-engineering of the power and water sectors,’ says the project source.

The project, located at the Hidd complex, will be given an as-yet-undecided new name. It is the first product of the sector study, commissioned by the government, which is being conducted by UK-based management consultant Ernst & Young (E&Y), Germany’s Lahmeyer International, the UK’s Hyder Consulting, law firm Myers & Brownand LECGof the US (MEED 13:6:03).

The kingdom’s current installed electrical generating capacity stands at 1,810 MW, with peak load demand of 1,550 MW during the summer. Water demand peaks at 88 million g/d, of which 68 million g/d is provided through desalination.