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Dubai Municipality has selected groups for the first two packages of the flagship Dubai Strategic Sewerage Tunnels (DSST) project ahead of announcing formal contract awards, sources have confirmed to MEED.

The AED80bn ($22bn) public-private partnership (PPP) scheme comprises three packages: J, W and Links, and covers the construction of two sets of deep tunnels terminating at pump stations at Warsan and the Jebel Ali sewage treatment plants (STPs). The project also includes over 200 kilometres of sewer links.

Package W will be awarded to a consortium led by Etihad Water & Electricity (UAE) alongside Tamasuk Holding (Saudi Arabia) and Alkhorayef Water & Power (Saudi Arabia), sources told MEED. This package has an estimated capital expenditure cost of about $3bn.

MEED understands that the engineering, procurement and construction (EPC) contractor for this package comprises a consortium involving three Chinese companies: China Civil Engineering Construction Corporation (CCECC), Shanghai Tunnel Engineering (STEC) and China Railway 14th Bureau (CRCCC14). France-headquartered Veolia will be the operator for the project.

Package J will be awarded to a consortium led by Vision Invest (Saudi Arabia) alongside Suez Water Company (France). This package has an estimated capital expenditure cost of less than $2bn.

According to a source, a group involving China State Construction Engineering Corporation (CSCEC) and local firm DeTech Contracting will be awarded the EPC contract.

MEED previously reported that three groups were bidding for the project, which is being procured by Dubai Municipality’s sewerage and recycled water projects department.

The bid packages included equity partners, an appointed operator and a construction contractor.

In April, the two winning consortiums were asked to submit best and final offers.

The third bidding consortium led by Plenary Group (Australia), alongside Itochu (Japan) and Infrastructure Holding (UAE), did not submit a final offer.

Construction work for the DSST scheme was previously categorised in multiple packages under the Warsan Strategic Tunnel Scheme (Package W) and the Jebel Ali Strategic Sewerage Scheme (J1 North, J2 South, J3 Jebel Ali Links).

However, the packages were restructured and renamed before J and W were tendered last November. 

It is understood that the overall DSST scheme, valued at about $22bn, reflects total lifecycle costs, including both capital expenditure and long-term operations.

Phase 2 Links

The Phase 2 Links package is the third package being tendered under the DSST scheme. It was tendered in January and has a bid submission deadline of 30 June.

At least two groups are preparing to bid for the Links package.

According to a source, the first group comprises an EtihadWE-led consortium, alongside China Civil Engineering Construction Corporation (CCECC), National Marine Dredging Company (NMDC) and China Railway Construction Corporation 11th Bureau Group (CRCC 11) as EPC contractors. France’s Veolia would act as operator.

MEED understands that Plenary Group will lead a second bidding consortium, while China State and De Tech Contracting are also preparing to bid for EPC works on the project, sources said.

The three packages are being procured under 30-year design, build, finance, operate and maintain concession models.

The DSST project aims to convert Dubai’s sewerage system from a pumped network to a gravity-based system, enabling the emirate to replace existing sewage pumping stations and meet long-term capacity needs.

The programme also marks the first time the municipality will implement In-Country Value (ICV), a local content programme that promotes economic benefits.