Joint venture of Samsung Engineering, Invest AD and United Utilities wins contract
Bahrain’s Public Works Ministry has awarded the contract to build a wastewater treatment plant and sewage conveyance system at Muharraq to a consortium of South Korea’s Samsung Engineering Company, Abu Dhabi financial services firm Invest AD and the UK’s United Utilities International.
The joint venture offered the lowest price of BD0.550 ($1.46) a cubic metre. Bids were opened in May 2010 and the group was named as preferred bidder in July. All the bids were supported by a minimum of 75 per cent committed finance.
All three partners in the consortium are providing equity for the project, with Samsung committing 45 per cent, Invest AD 35 per cent and United Utilities 20 per cent.
The project is being debt financed by the Export-Import Bank of Korea (Kexim), Japanese lender Sumitomo Mitsui and French banks Natixis and Credit Agricole. The banks joined the deal towards the end of 2010 and will together provide around $300m. Financial close is expected to follow shortly.
The project in Muharraq, in the northeast of the capital, Manama, is the first of its kind in the region as it also incorporates a wastewater collection network component.
The plant will process 100,000 cubic metres a day and is scheduled to achieve completion after 30 months. Samsung Engineering and United Utilities will handle operations and maintenance for 24 years after completion.
The bid offered by Spain’s Acciona and Kuwait Finance House, the second cheapest offer at BD0.6072 a cubic metre, was named second ranked preferred bidder.
The third rank bidder – with an offer of BD0.6896 a cubic metre – is Saudi Arabia’s Saudi Oger with Korea Water Resources Corporation and Samsung C&T, both of South Korea.
The two most expensive bids were rejected. The bids were entered by the UAE’s Metito with Germany’s Berlinwasser with an offer of BD0.7165 a cubic metre and another from France’s Degremont and Japan’s Sumitomo with an offer of BD0.7426 a cubic metre.
The government of Bahrain is being advised on the project by Germany’s Fichtner, UK bank HSBC and UK law firm Norton Rose.
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