Oman’s Public Authority for Electricity & Water (PAEW) has selected France’s Veolia Water for a contract to provide management services for the sultanate’s water sector. Veolia will improve the efficiency and effectiveness of Oman’s existing water networks.

The tender process was structured in two phases starting with technical evaluations of the bids, followed by financial evaluation. Bids needed to be 70 per cent technically compliant for financial offers to be opened. Bids were submitted at the end of March (MEED 15:4:10).

Veolia Water and Suez Environnement were declared technically qualified along with Severn Trent and United Utilities, both of the UK. UAE-based Metito’s bid did not clear this stage.

Financial bids from the eligible companies were opened in late-June. The prices were:

• Veolia Water – RO19.1m ($49.6m)
• Suez Environnement – RO21.8m
• United Utilities International – RO25.5m
• Severn Trent Services International – RO10.7m

PAEW invited French companies Veolia Water and Suez Environnement to negotiations in Oman. Both companies then dropped their prices to compete before Veolia’ s offer of RO16.8m was chosen.

Despite offering the lowest price, Severn Trent was not invited to participate in clarification negotiations. Sources close to the tender have indicated that the company did not meet the technical criteria, but reasons for opening the bid are unclear.

A Singaporean group of Jurong Consultants with Pub Consultants and Boustead Singapore was prequalified to bid and attended a pre-bid conference in January, but subsequently opted not to bid. Germany’s Gelsenwasser was also prequalified, but did not attend the conference and did not put in a bid.

KPMG is the lead adviser to PAEW on the deal. The UK’s Atkins is technical adviser and France’s Gide Loyrette Nouel with the local Al-Busaidy, Mansoor Jamal & Company (AMJ) are legal advisers. The advisers have been working on the programme since their appointment over a year ago following a competitive process in which five other bidders competed.