Omani utility simplifies power plant tenders

08 October 2009

Changes to pricing requirements mean commercial production at Sohar and Barka faces 12-month delay

State-owned utility Oman Power & Water Procurement Company (OPWP) is simplifying the bidding on its planned Sohar and Barka independent power projects (IPPs) by effectively delaying commercial production at the plants by a year.

In July, when OPWP issued a request for proposals for the two contracts, it asked bidders to submit prices for two scenarios: to deliver full power from both 650-750MW plants by 15 May 2012; and to bring on line at least 375MW of capacity at each plant by 1 April 2012, with the remainder to follow by 1 April 2013.

OPWP asked for the second option to be priced in case it failed to select a preferred bidder for the schemes by early February 2010.

Contracting groups were invited to either bid for both the Sohar and Barka deals or just one, but the tender’s dual-pricing requirements were causing contractors concern.

Under the tender, firms were being asked for two separate prices for each plant, to sign two different contracts with their engineering, procurement and construction contractors, and to secure two different finance packages with their lenders.

OPWP has now scrapped the first option and the winning bidder will have until April 2013 to have both plants running at full capacity.

“It is an enormous help, because the arrangement was totally distorted,” says one of the potential bidders. “You had to ask [equipment] suppliers for two different deliveries. It was becoming a [logistical] labyrinth.”

The bid deadline for both schemes is 7 December.

Groups preparing to bid for the Barka 3 and Sohar 2 IPPs include: Saudi Arabia’s Acwa Power International; Marubeni Corporation and Chubu Electric, both Japanese, with Qatar Electricity & Water Company; the UK’s International Power with UAE-based Mubadala Development Company and the local National Trading Company; Saudi Oger and Korea Electric Power Corporation; and Suez Energy International with Saudi Arabia’s Al-Jomaih Group.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications