Egypt’s Ministry of Housing, Utilities & Urban Development (MHUUD) is considering changing the Abu Rawash wastewater treatment plant (WWTP) to a conventional procurement model.

The selected developers, local Orascom Construction Industries, France’s Veolia and Spain’s FCC Aqualia had agreed the terms of a build, operate, transfer (BOT) contract with the PPP Central Unit.

The consortium is now in negotiations with MHUUD, as the client who will sign any contracts.

“The government still believes that the PPP setup is expensive due to the high interest rates on EGP loans and that it would be more efficient to finance through the national budget, hence they might switch to an EPC [engineering, procurement, construction] approach,” said a source close to the deal. “Nothing is formally confirmed, as these are all still discussions.”

The public private partnership (PPP) project involved the design, financing and expansion of the existing Abu Rawash plant from 1.2 million cubic metres a day (cm/d) to 1.6 million cm/d, as well as the construction of an advance secondary treatment stage. The contract also included the operation and maintenance of the whole plant for 22 years.

PPP Central Unit awarded the contract in August 2015, but signing was delayed due to a scarcity of hard currency needed to import equipment.

Orascom, Veolia and FCC Aqualia agreed with PPP Central Unit to reduce their foreign currency requirements from over $200m to around $100m.

“The developers have managed to reduce the needs for foreign currency through multiple exercises to enlarge the local content in addition to availing some dollars through equity injections, but that [was] when they were following the PPP route as initially tendered,” said the source.

In return, the Central Bank agreed to make dollars available to the developers.

FCC Aqualia told MEED in February that sourcing equipment locally would increase equipment costs by as much as half.

Abu Rawash WWTP is Egypt’s flagship PPP project, and the first major project to be tendered by PPP Central Unit since political unrest starting in 2011.