Syria is seeking contractors to deliver its programme of wastewater modernisation projects, which comprises construction of about 200 wastewater treatment plants over the next 10 to 15 years. It is also looking to increase the amount of wastewater it re-uses and to streamline the operation and management of its sewerage.

In the past there was not enough focus on wastewater, so the government is working to fix the situation

Jihad Abujamus, Arabtech Jardaneh

But first it must update its forms of contracts to operate in line with other international markets. International development banks, such as the European Investment Bank (EIB) and Germany’s KfW Bankengruppe encourage the use of the Fidic form of contract (developed by the Federation of International Consulting Engineers) for use throughout the region and it is being adopted by Syria. 

Vast water industry opportunities in Syria

There are vast opportunities in the water and wastewater sector for firms that form relationships with the government and a diverse range of overseas companies already work in Syria, from countries including Iran, Kuwait, Germany, Malaysia and China – in part due to the availability of support from financial institutions in these countries.

Design and build remains the agreement of choice for project delivery in the country, although recently the government has begun to look at alternatives.

“We are trying to introduce more private sector involvement through the use of forms of contract such as design, build and operate (DBO),” says a source within the Ministry for Housing and Construction (MHC).

This is the body in overall charge of sewerage services but operationally each of the countries 13 governorates has its own administrative body to run its sewer networks.

To date only 30 per cent of the country’s wastewater currently undergoes any sort of treatment and this is concentrated in the main cities of Damascus, Hama, Homs and Aleppo. Together these cities house about 57 per cent of the Syrian population. In terms of the sewerage, approximately 95 per cent of cities and major towns are covered. Coverage is closer to 45 per cent in rural areas.

Improving the coverage rates is vital for Syria, which suffers badly from ground and surface water pollution caused by untreated domestic and industrial effluent being deposited into water bodies. In addition, ground water recharge rates lag behind extraction rates and illegal connections and wells are commonplace. Preventing the pollution of existing resources and re-using treated effluent would go a long way to improving both sanitary and economic conditions for the country.

The government is well aware of the issues and has laid plans for improving the wastewater system. Under Syria’s five-year plan for 2012 to 2017 the government seeks to ensure that the private sector is involved in its delivery. To this end, the introduction of a Public-Private Partnership (PPP) law is under way via the recently established PPP Unit within the Ministry of Finance. It is understood that, although Syria will keep provision of waste-water as a public service, PPP project delivery arrangements such as build, operate and transfer (BOT) contracts are on its agenda.

Recent BOT developments have failed to take off. The most notable was the plan for two treatment works in Damascus (at Jaramana and Swuedah) to be delivered and operated by the Syrian-Qatari Holding Company (SQH) joint venture. SQH was established in November 2007 with a signed agreement between the respective governments and the resulting company was set up with capital of $5bn. Capital in kind through contribution of assets was made by the Syrian government, while the Qatari government put in cash. Since then the company has launched projects in the energy, fertilisers and health sectors. 

Wastewater projects on hold

In October 2009, SQH signed a memorandum of understanding with the MHC to develop the two wastewater schemes, which together are expected to serve more than 500,000 people by 2040. Hassan Mukayed, chief executive of SQH, confirmed to MEED that the projects are on hold.

An insider at MHC explained that this was due both to uncertainty over the legislative framework and to an inability to reach an agreement over financing.

“There were two issues. The first was the fact that the law is still being developed. The second is the fact that drinking water and wastewater are already heavily subsidised by the treasury, so there are issues regarding investor tariffs and cost recovery. The investors wanted heavy conditions and collaterals,” says the source.

However, the MHC is still intent on launching BOT wastewater projects and discussions are ongoing with Kuwaiti and Saudi Arabian firms. Delivery of the PPP law, a timetable for which is unclear, will give investors, including the Qataris, more certainty.

For now, ongoing projects are being delivered the traditional way, via design-and-build or lump-sum turnkey contracts. Major wastewater treatment works are under way at Latakia and Tartous on the Mediterranean Coast. The successful contractor was wastewater specialist Tehran Mirab Company of Iran, which confirmed that the contract value for the schemes is $59m.

Sea discharge in Syria

Latakia consists of four main districts (Latakia, Jable, Al-Querdaha and Al-Hafeh) and the new plant is designed to service Latakia City and Jable. In mid-2007 it was reported by the Japan International Co-operation Agency (JICA) that Syria’s sewer network has 13 outlets discharging into the Mediterranean.

“The biggest outlet is a triple box culvert. Huge volumes of raw sewage were observed discharging from one of these. Even sewage collected by vacuum tanker was discharged into the sea at the end of the same box culvert,” states the JICA report.

The Latakia treatment plant was originally expected to be built by French water specialist OTV using French financing. The deal fell through and Syria decided to finance the project as a lump-sum turnkey scheme. Iran’s Tehran Mirhab was awarded the contract for this and for the sewage treatment plant in the neighbouring governorate of Tartous in May 2008.

Meanwhile, Malaysia’s Weida has also been busy building wastewater projects in the country. Its first was a plant serving 120,000 people at Zabadani, which was officially handed over to the government in April. The work was part of a wider $107m contract to develop a sewerage masterplan for a population of 4 million. This includes five sewage treatment plans and 15 water treatment plans delivered on a turnkey basis. Finance was provided by Export-Import Bank of Malaysia.

Improvements to existing works are also on the Syrian agenda. The country’s largest treatment works is the 500,000 cubic metres a day (cm/d) facility serving Adra. It is currently being upgraded to improve quality standards. 

“The sector is booming. In the past there was not enough focus on wastewater, so the government is now working to fix the situation,” says Jihad Abujamus, operations director for agriculture, wastewater and environment at Jordanian consultant Arabtech Jardaneh.

With regard to future projects financing, options will certainly include grants and loans from development banks, which are offering debt cancellation of previous loans against social infrastructure investment. DBO is a second option being explored and BOT is on the horizon. Sources say that rural Aleppo is expected to become the next BOT.

“Satellite towns hold great potential for BOT,” he says, and points to an EIB study which is assessing financing options for wastewater infrastructure in rural areas.

Aleppo currently benefits from the 345,600cm/d Aleppo City wastewater treatment plant, which JICA identified as in need of an upgrade to improve its efficiency.

“Inlet wastewater quality is quite different by season,” says JICA’s report. It all comes down to the insufficient study on fundamental conditions, such as temperature, mechanical/biological treatment efficiency and industrial wastewater quality. Therefore, plant rehabilitation […] is desirable.”

From upgrades to new builds, Syria certainly faces an uphill challenge when it comes to modernising its wastewater sector. Significant effort has already gone into the process and much is being done to encourage new firms in to the country through the use of international contract forms and legislative change. But development of the PPP law is the key to getting BOT projects under way. But Syria’s inexperience with such schemes, combined with inherent inefficiencies lingering in the multi-tiered management of its wastewater assets, mean that much more remains to be done if modernisation is to be achieved over the next decade.