Large differences in Disi prices

19 December 2003
The Ministry of Water & Irrigation opened on 17 December commercial bids for the contract to build and operate the Disi water project to supply drinking water to Amman. Two international consortia are bidding for the 40-year build-operate-transfer (BOT) project, which will nearly double Amman's drinking water supply.

According to the bid opening prices, the Arab Bank-led Jordan National Consortium for Disi Project (JNCDP) is the low bidder, having offered prices ranging between JD 551 million ($391 million) and JD 572 million ($406 million). Its quotes are well under the Saudi Oger-led consortium prices, which ranged between JD 636 million ($451 million) and JD 836 million ($593 million).

The JNCDP consortium comprises Arab Bank, Housing Bank for Trade & Finance, Group5 and Rand, both of South Africa, Edgoand Astra, both local, and Cyprus-based Joannou & Paraskevaides(J&P - Overseas). The Saudi Ogerdeveloper team includes the US' Black & Veatch and is supported by a joint venture of Athens-based Consolidated Contractors International Company (CCC)and Turkey's Tekfenas the engineering, procurement and construction (EPC) contractor.

The consortia were each asked to submit two prices for the project (see table). The first price - bid 1 - is to supply 120 million cubic metres a year (cm/y). Bid 2 is to supply 100 million cm/y. The bidders also submitted alternative prices to supply the same quantities of water as the first two prices but using alternative technical specifications such as pipeline thickness. The Ministry of Water & Irrigation is expected to take six-eight weeks analysing the details of the bids to establish which represents the best price.

Under the terms of the 40-year BOT contract the government will pay the Disi project company to deliver agreed annual quantities of water to two reservoirs near Amman. In return, the project company has to establish new well fields in the Disi area, and construct water supply infrastructure including more than 300 kilometres of pipelines, pumping stations and treatment works.

Amman has pledged $200 million in funding for the project. This will be released in $50 million tranches when key construction milestones are achieved. The remainder of the finance must come from the successful consortium.

The Disi water project will supply about 1.5 million people in the Greater Amman area. Demand levels of about 250 million cm/y outstrip current capacity by about 100 million cm/y (MEED 24:10:03).

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