Bidders line up for IWPP advisory work

20 December 2002

Bids were opened in mid-December for three advisory packages on the kingdom's first independent water and power projects (IWPPs). Technical, legal and financial advisory contracts are expected to be awarded by the Saline Water Conversion Corporation (SWCC) and Saudi Electricity Company (SEC)in the first week of January (MEED 13:12:02).

The US' Kuljian Corporationis understood to have submitted the low bid for the technical contract. Other bidders include Mott MacDonald, Binnie Black & Veatchand British Power International, all of the UK, Germany's Fichtnerand Switzerland's Electrowatt Engineering Services.

Six groups bid for the financial advisory mandate: Societe Generalewith Arab Banking Corporation, Citibankwith its local affiliate Saudi American Bank, Credit Suisse First Boston, HSBC, Gulf Investment Corporationand ANZwith Riyad Bank.

Six groups bid for the legal advisory package. They are: Freshfields Bruckhaus Deringerwith The Law Firm ofSalah al-Hejailan; Clifford Chance with The Law Firm of Yousef & Mohammed al-Jadaan; White & Case with The Law Office of Hassan Mahassni; Akin Gump Strauss Hauer & Feldwith The Law Firm of Abdulaziz H Fahad; Al-Mehairi Legal Consultants - Bryan Cave; and Jones Day Reavis & Pogue.

January awards will allow the engineering, procurement and construction (EPC) package to be tendered in the second half of 2003, with an award in early 2004.

The scope of works includes four IWPPs: Shouaiba and Shuqaiq on the Red Sea coast and Ras al-Zour and Jubail on the Gulf coast. Bidders were asked to price a base offer for only the Red Sea projects and an alternative comprising all four plants. The Shouaiba, Ras al-Zour and Jubail projects are all about 2,000 MW, while the Shuqaiq project is slightly smaller.

The three larger projects were originally planned as part of the kingdom's gas initiative. The Shouaiba plant was to have been included in core venture 2, the part of the initiative now thought least likely to go ahead. The Jubail and Ras al-Zour plants fall within core ventures 1 and 3, which are still under negotiation between international oil companies and the government.

SEC and SWCC have set up a 50:50 joint venture company to carry out the IWPPs in partnership with a developer. The development company will then sell both the power and water to an offtaker, also owned by SWCC and SEC. The government has offered guarantees for the purchase of both products.

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