French/local team takes Fajr 2

24 February 2006

A local/French consortium has been awarded the estimated Eur 200 million ($239 million) contract to build the Fajr 2 power plant in Bandar Imam. The group emerged as the low bidder for the contract after the opening of commercial proposals by the client, National Petrochemical Company (NPC), earlier this month (MEED 24:6:05).

The Nikan consortium comprises Kayson Group, Ameran Ofogh and Niroo Tavan, all local, and France's Alstom. Under the 33-month contract, the group will carry out the construction of the 640-MW gas turbine plant, which will also produce steam, on an engineering, procurement and construction (EPC) basis. The contract also involves construction of a desalination plant using reverse osmosis (RO) technology and other facilities including offsites. The other bidder was a partnership of Germany's MAN Ferrostaal and the local Oxin Sanat.

The plant was originally planned to have capacity of 820 MW but NPC decided to reduce the scope. It will be operated by Fajr Petrochemical Company, a wholly-owned NPC subsidiary, which is the utilities provider for Bandar Imam petrochemical industries. A 250-MW expansion to the existing Fajr 1 plant was awarded last year to MAN Ferrostaal. France's Air Liquide built the original plant (MEED 11:2:05).

The local power market has slowed significantly in recent months despite the rapid growth in electricity consumption. All national power generation projects are now being tendered privately - either on a build-own-operate (BOO) or build-operate-transfer (BOT) basis. The former are being pursued mainly by local developers, few of whom have the experience, financial backing or capacity to complete the schemes. The latter are being negotiated with foreign developers, most of whom are increasingly averse to Iran's political risk.

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