Manama delays bidding on wastewater treatment plant

05 January 2010

Firms given more time to address financing and technical considerations

Bahrain’s Tender Board is postponing the deadline for bids on the Muharraq wastewater treatment plant by a month, following requests from potential bidders, say sources close to the scheme.

At least one of the interested bidders requested more time to secure financial support, while others asked for extra time for technical considerations.

The delay, from 20 January to 17 February, was granted in late December. The board has also lowered the financial underwriting commitment for bids from 100 per cent to 75 per cent.

One source close to Bahrain’s Works Ministry, which is sponsoring the project, says the underwriting commitment has been lowered as a result of improving financing conditions in the region.

“The Finance Ministry is less worried now about filling a 25 per cent funding gap after the selection of a preferred bidder,” says the source.

The two measures to lower the underwriting commitment and extend the bid deadline should help bidders secure sufficient financial support from banks. Of the 11 prequalified bidders which met with the ministry in early July last year to discuss the project, only five are now expected to bid.

“The field has narrowed significantly since the meetings,” says one project source.

The five groups pursuing the project include France’s Veolia with Singapore’s Keppel Seghers Engineering; France’s Degremont with Japan’s Sumitomo; the UK’s United Utilities with South Korea’s Samsung Engineering and Bahrain’s Instrata Capital; Malaysia’s YTL Power International with the UK’s Wessex Water; and the German/UAE joint venture Metito Berlinwasser.

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