The GCC power projects market slowed in the second quarter of 2013, with the value of contract awards falling by 76 per cent from the first quarter. The value of project awards in the second quarter dropped to $1.2bn from the $5bn-worth of deals signed for the first three months of the year.
The award of contract awards in the GCC power sector was also down year-on-year, with the $6.2bn of contracts signed in the first half of 2013, down 9 per cent on the $6.8bn awarded over the same period in 2012.
Kuwait recorded the highest value of contract awards in the second quarter, with $445m-worth of deals signed. This is the second straight quarter Kuwait has been the regions most lucrative projects market, with $2.3bn-worth of power contracts awarded in the first quarter. The biggest contract awarded in the second quarter was the estimated $283m deal awarded to the local Alghanim International to install two 225MW turbines at the Al-Zour South power plant.
Kuwait will continue to award major utilities contracts in the second half of 2013 as the government seeks to develop its utilities infrastructure to cope with its rapidly growing population. In June, the Ministry of Electricity & Water (MEW) received bids from five companies for the contract to build and install eight 132kV substations at various locations in Kuwait. In 2011, the ministry pledged to spend $10.1bn on power generation and water schemes, and $8.7bn on transmission projects by 2014.
Saudi Arabia was the second-most active power market in the GCC for the first six months of the year, with contracts worth a total of $375m awarded in this period. The largest award was to Germanys Siemens to provide and install a substation and related infrastructure in Al-Kharj.
The value of project awards in the kingdom should increase sharply in the second half of the year, with the state power firm Saudi Electricity Company (SEC) currently evaluating bids for the contract to build the proposed 2,600MW Shuqaiq power plant. Heavy investment in the power sector will continue in the coming years as Saudi Arabia seeks to meet the expected growth in demand. It is estimated that the Saudi Arabias peak power demand will rise from the 48,367MW in 2011 to 75,000MW by 2020.
Just over $200m-worth of power contract awards were made in the UAE in the first six months of the year, which included a $55m substation project for the Dubai Electricity and Water Authority (Dewa) and a $50m contract for the Sharjah Electricity and Water Authority (Sewa). Abu Dhabi is also investing in expanding its utilities infrastructure, with the Abu Dhabi Water & Electricity Authority (Adwea) currently evaluating proposals for the planned 1,600MW Mirfa independent water and power project (IWPP).
In Oman, $141m-worth of contracts were awarded in the power sector in the first half of 2013. The largest contract was the estimated $98m deal awarded to Saudi Arabias National Contracting Company to build the 132kV Musandam grid substation and overhead transmission line.