ADWEA kicks off wastewater privatisation

22 November 2005
Abu Dhabi Water & Electricity Authority (ADWEA) has started the process of selecting advisers for a planned privatisation of two of the emirate's sewage treatment plants. The privatisation will be the first to take place in the Abu Dhabi sewerage sector and follows the late June decision to transfer sector responsibility to Abu Dhabi Sanitary Sewage Services Company, wholly owned by ADWEA, from the Sewerage Projects Committee (MEED 1:7:05).

The first two candidates for privatisation are the Mafraq sewage treatment plant, which has capacity of 340,000 cubic metres a day (cm/d), and the 55,000 cm/d Zakher sewage treatment plant in Al-Ain. ADWEA is planning to appoint technical, legal and financial advisers to prepare the request for proposals (RFP), which is due to be issued to developers in February. Under the planned schedule, submissions will take place next May, project execution in September and financial close by the end of 2006.

The privatisation is expected to follow ADWEA's independent water and power project (IWPP) model, with the selected developer taking a stake in a new project company, which acquires the existing assets and carries out expansion work on a build-own-operate basis. On its IWPP programme, ADWEA owns a 60 per cent stake and the foreign developer a 40 per cent share in the new project company, which signs a 20-year power and water purchase agreement with the government.

ADWEA is expanding its privatisation programme well beyond power and water generation. Both Abu Dhabi Distribution Company (ADDC)and Al-Ain Distribution Company (AADC)are being prepared for privatisation, the first step of which will be the award of eight-year operation and maintenance contracts to international contractors (MEED 28:10:05).

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