RFP issued for Abu Dhabi O&M

16 September 2005
The request for proposals (RFP) has been issued for the eight-year operation and management (O&M) contract for Abu Dhabi Distribution Company (ADDC), with prequalifiers preparing to submit proposals by late November. The RFP is due to be released in late September to the same prequalifiers for a second eight-year O&M contract covering the emirate's other electricity and water distributor, Al-Ain Distribution Company (AADC). The O&M contracts are seen as the first stage in the partial privatisation of the two companies, wholly owned by Abu Dhabi Water & Electricity Authority (ADWEA - MEED 1:7:05).

ADWEA has prequalified 15 international companies for the O&M contracts. Three have been prequalified as both electricity and water operators, six as just electricity operators and four as water operators only. With ADWEA planning to award one contract for each distributor, companies prequalified either as electricity or water operators only are required to team up with other companies active in their non-specialist field. Consortia can be formed with other prequalified operators or with non-prequalified companies, which conform to criteria set out in the RFP.

In addition to the 13 companies prequalified as operators, ADWEA has qualified two - Korea Electric Power Company (Kepco)and Australia's Powercor- as partners on the electricity side. To be eligible to bid, the companies are required to team up with one of the prequalified water operators.

More than 20 companies applied to prequalify for the contracts. The financial adviser is BNP Paribas; the US' Dewey Ballantine is the legal adviser.

The O&M contracts are part of a 12-month privatisation programme that will see the government sell 40 per cent of its ownership in each of the two companies. The first stage of the sale will involve the private placement of a 20 per cent stake in each company to local institutional investors. A further 20 per cent holding in each company will then be offered through an initial public offering (IPO).

ADDC has about 170,000 water and 200,000 electricity customers, while AADC has 50,000 water and 90,000 electricity customers.

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