Request for qualification (RFQ) has been invited by 20 July by the Ministry of Finance (MoF) for the brownfield Hidd independent water and power project (IWPP). The request for proposals (RFP) is due to be issued between 30 July and 6 August, with bids due in early November, a preferred bidder selection in early December and an award made by the end of the year.
The project entails the acquisition of the existing Hidd phases I and II power and desalination complex and the implementation of the Hidd phase III expansion, calling for the addition of 60 million gallons a day (g/d) of desalination capacity. Existing capacity is 1,000 MW and 30 million g/d. The successful bidder will be required to ensure 10 million-15 million g/d of new capacity by March 2007 with full water flows by the end of 2008, utilising steam from the existing plant. Current desalination capacity in the kingdom is 77 million g/d and is estimated to reach 138 million g/d by 2012. A 20-year power and water purchase agreement (PWPA) will initially be signed by the developer with the Ministry of Electricity & Water (MEW). However, with the sale of Hidd, the ongoing implementation of the 1,000-MW Al-Ezzal IPP and the decommissioning of ageing facilities, MEW will control an increasingly small percentage of generation capacity and the government has agreed a proposal for the ministry to be converted into an independent regulator. The timescale remains under discussion. Al-Ezzal was awarded to a team of Belgium's Tractebeland Kuwait's Gulf Investment Corporationin 2004. The decision to proceed swiftly with further privatisation was spurred by the success of Al-Ezzal, which was tendered smoothly on schedule and attracted a very competitive price. MoF has retained the advisory team of BNP Paribas, the UK's Mott MacDonaldand Freshfields BruckhausDerringer(MEED 29:4:05).