The news that Dubal Holding, a distinct but related entity of Dubai Aluminium (Dubal), has been prequalified to bid on the emirates Hassyan coal-fired independent power project (IPP) has surprised those involved in the regions power market. It also raises the question of the long-term goal of liberalising Dubais power market.
For the state utility, Dubai Electricity & Water Authority (Dewa), appointing Dubal to develop and operate the countrys first major independent power project (IPP) would offer certain attractions. Dubal has proven over a period of more than 30 years that it is able to produce energy and operate one of the largest power plants in the emirate. The proven expertise would mean the new developer would offer a high chance of succeeding with Dubais first coal project.
However, while Dubal has a proven track record in the local market, its appointmentl may contradict the aim of liberalising the power market. While bidding for the Hassyan project is being conducted through an open public tender process to ensure transparency, one of the primary reasons for launching the project as an IPP is to encourage private participation in the power sector. If the contract for Dubais first major IPP is awarded to what is effectively a state-owned company, the emirates ambition to liberalise the utility market will be open to questions.
As Dubais first major IPP and the UAEs first major coal scheme, the Hassyan project is already an interesting development. The participation of Dubal in the bidding process has increased its intrigue even further.