Egypt drops PPP for Abu Rawash wastewater project

16 February 2017

Contract for wastewater plant expansion scheme had been awarded in 2015

Egypt’s Construction Authority for Potable Water & Wastewater (CAPW) has dropped plans to procure the Abu Rawash wastewater treatment plant under the public-private partnership (PPP) model.

In August 2015, CAPW, in cooperation with the Ministry of Water and Wastewater Utilities (MOWWU) and Egypt’s PPP Central Unit, awarded a contract to a consortium of the local Orascom Construction and International Consultants for Agency & Trade (Icat), Spain’s Aqualia, and France’s Veolia to develop the Abu Rawash wastewater treatment plant expansion under a PPP structure.

The winning consortium signed a 25-year deal with CAPW. The tendering of the project has been overseen by the PPP Central Unit.

However, MEED reported in 2016 that the government was considering dropping plans to develop the scheme under the PPP model and switch it to a more conventional EPC model. MEED has now confirmed that the project has been dropped from the PPP Central Unit’s list, and is planned to be developed under a conventional model.

According to sources close to the scheme, CAPW is hoping to move ahead with the project with the same consortium under an EPC contract with a long operation and maintenance (O&M) structure.

The Abu Rawash project is planned to expand the capacity of the existing 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 scheme has faced several delays since it was first launched. The PPP Central Unit initially produced a list of prequalified companies allowed to bid to build the plant in early 2011, but due to delays resulting from the political uprisings and changes in specifications, the project owner decided to restart the process earlier this year.

CAPW and the PPP Central Unit received bids in January 2015 from three consortiums, and subsequently shortlisted proposals from the Orascom consortium and Kuwait’s Kharafi National.

The dropping of the PPP structure for the project is a blow for Egypt’s planned PPP programme, with the Abu Rawash scheme having been the first PPP scheme launched since the 2011 revolution and was regarded as a key trailblazing project for the rest of the country’s prospective PPP programme.

Cairo has faced a number of challenges with planned PPP in the power and water sectors due to currency issues and disputes over international arbitration clauses in contracts.

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