Amman seeks private partners for water projects

26 November 2010

Successful delivery of the Al-Samra wastewater project under a build-operate-transfer model has given Jordan a firm footing when it comes to launching public-private partnership projects

Key fact

For the Al-Samra wastewater treatment works, the government of Jordan provided 55 per cent of the project finance

Source: Ministry of Water & Irrigation, Jordan

Modern wastewater treatment began in Jordan in the 1960s at Ain Ghazal, Amman. The gravity sewer network collected about 60,000 cubic metres a day (cm/d) of wastewater and treated it using the activated sludge process, using bacteria to encourage solids in the sewage to coagulate and settle out of the liquid waste. Over time odour issues and ground water pollution became a problem.

The kingdom learned from this experience and opted for additional or alternative treatment processes at future works. Mechanical treatment and waste stabilisation ponds feature in the country’s current wastewater infrastructure. There are 26 works serving Jordan, including the kingdom’s first to be delivered under a build, operate and transfer (BOT) contract, the Al-Samra plant. 

Increasing wastewater capacity

The $169m Al-Samra works involved construction of a new 267,000cm/d plant, which began operating in April 2008. The developer is the Samra Project Company, a consortium which includes France’s Suez Environmental Degrémont and the US’ Morganti Group.

“Between 63 and 64 per cent of the country has adequate sanitation. We are currently increasing the capacity and part of the plan is to involve the private sector,” says Mohammad Najjar, director of the Program Management Unit at the Ministry of Water & Irrigation. “At Al-Samra, 55 per cent of up-front finance was provided by the government of Jordan, including a United States Agency for International Development contribution. About $90m was project finance (equity and debt).”

 By supporting Al-Samra’s capital construction costs, Jordan has followed a financial model whereby the long-term operational expenses paid under the BOT contract are covered by tariffs. Crucially, 90 per cent of the required electricity generation was provided by gas emissions, which were used to drive turbines at the plant, making it almost self-sufficient in power and saving about $3m a year. “We reduced the cost of treatment to an acceptable level so we can pay for the cost of treatment through what is collected from households,” Najjar says.

Such innovation is what Jordan will be looking for on its future wastewater contracts. But the ministry must first source up-front finance, which is more challenging in the current economic climate. “We are looking for a source of finance. Next year we will be asking the private sector to be involved in wastewater treatment and re-use,” Najjar says.

Pioneering re-use

Jordan is somewhat ahead of other states in the region when it comes to re-use. The kingdom currently re-uses 115 million cubic metres a year of treated sewage effluent – 95 per cent of all its treated water. The dedication to re-use is influencing plans for decentralisation of wastewater in rural areas. The ministry is considering setting up satellite treatment plants for collection from villages, creating mini-networks to which re-use is integral.

Forthcoming wastewater BOT deals are expected to include a wastewater project on the Dead Sea coast, where the growing number of hotels is lifting demand. Discussions are in progress with potential developers and, if all goes well, Jordan’s next PPP for wastewater could get under way in earnest in 2011.

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