The Power & Water Utility Company for Jubail & Yanbu (Marafiq) is scrapping a series of tough conditions on bids for the Yanbu independent water and power project (IWPP).
The move will make it easier for potential bidders to secure contracting resources.
At least two of the five consortiums seeking to sign up power and water contractors to support their bids have yet to secure the partners required under the original criteria.
Marafiq was requiring bidders to have completed engineering, procurement and construction (EPC) contracts on least two coal or oil-fired steam power plants. Both plants must have had capacity of at least 800MW and been operating for two years. A contractor must have also executed at least two 400MW projects in the Middle East.
Under the new rules, contractors only need to have completed a single power plant of any type with capacity of 400MW, which has been operating for at least two years. “There is no mention of coal or oil-fired plants,” says a project source. “It can be simple cycle or combined cycle.”
Marafiq is also dropping the need for regional experience.
It is also revising the requirements for desalination contractors. Initially, contractors needed to have completed EPC contracts on at least two desalination plants with similar capacity to that being proposed for Yanbu of 150,000-cubic-metres-a-day (cm/d). Both plants must have been operating for two years. Contractors also needed to have executed at least two desalination plants in the Middle East with a capacity of 100,000 cm/d.
Desalination contractors no longer require regional experience. They must simply have completed a single project with a capacity of at least 20,000 cm/d using the technology to be used at Yanbu.
The revision of the strict criteria has divided the contracting sector with some experienced firms claiming Marafiq is setting the bar too low. “The problem is less experienced firms can come in,” says the project source. “Marafiq is changing the criteria from very severe to very low. Its original intention was to invite highly-qualified companies.”
However, with EPC resources in short supply, Marafiq’s decision to open the door to newcomers has been welcomed by others. “They have no other choice,” says one developer. “Companies have been breaking away from projects because they do not meet the requirements. If you want more bidders, you have to lower the requirements.”
Three of the groups in the running for the IWPP are understood to have secured contractors.
A team of the local Acwa Power Projects and Korea Electric Power Corporation is nominating South Korea’s Doosan Heavy Industries & Construction as its power contractor and Spain’s Inima as its desalination contractor.
A second group of the UK’s International Power, Abu Dhabi-based Oasis IP and the local United Infrastructure Developers Company is teaming up with South Korea’s Hyundai Heavy Industries for power and Spain’s Acciona for desalination. Japan’s Marubeni Corporation, Malaysia’s Keppel Energy and Saudi Masader is nominating Italy’s Snamprogetti as their power contractor. Their desalination contractor is not yet known.
The local National Power Company and Abu Dhabi National Energy Company (Taqa) have yet to secure contractors.
It is understood that Belgium’s Suez Energy International could be pulling out of the bidding after losing South Korea’s Samsung Engineering & Construction as its power contractor. Suez declined to comment.