South Korea’s Doosan Heavy Industries & Construction has been awarded a $3.4bn contract to build the Rabigh 6 power plant.
Saudi Electricity Company (SEC) has notified the company of the award and will sign the agreement construct the 2,800MW heavy fuel oil-fired plant shortly.
Doosan was the lowest bidder for the contract with a price of SR14.81bn ($3.95bn) when bids were submitted in December last year. Fellow South Korean company Hyundai Heavy Industries submitted the second lowest price of SR14.96bn. France’s Alstom offered two prices for the project, they were SR16.33bn and SR16.65bn (MEED 22:1:10).
The large price difference between the two low bidders and Alstom’s bid led SEC to negotiate with the two South Korean companies.
Doosan and Hyundai both lowered their prices in the months that followed in an effort to outbid the other.
Doosan was finally named the winning company on 8 September with an offer of $3.4bn in a combination of SR5bn and $2bn.
Apart from Hyundai, which priced the contract in Saudi riyals, the bidders submitted their offers in a combination of different currencies.
Saudi Electricity first tendered the project in 2008, but received only two bids from Hyundai Heavy Industries and a team of Arabian Bemco with South Korea’s Hanwha Engineering & Construction in August 2008.