Riyadh draws up water scheme shortlist

21 August 2009

National Water Company to announce selected bidders for three management contracts on 24 August.

The state-run National Water Company (NWC) will announce on 24 August the shortlist of firms that have prequalified for three water and wastewater management contracts.

NWC expects to issue the shortlisted firms with a request for proposals on 1 September. The deadline for commercial and technical bids is scheduled for mid December.

One source close to the project says that about 25 groups applied in early August to prequalify for the public-private partnership (PPP) contracts. The three contracts cover Greater Dammam, including Khobar; Mecca and Taif; and Medina.

Each of the contracts will run for between five and seven years and will cover management, operation and maintenance work.

The UK’s Hyder Consulting is the technical adviser on the project. Simmons & Simmons, also of the UK, is the legal adviser. The local Aldukheil Financial Group is the financial adviser.

Last year, NWC awarded two similar contracts for the management of water networks in Riyadh and Jeddah. In April 2008, France’s Veolia won a $60m deal to manage Riyadh’s water and wastewater networks. One month later, a team of France’s GdF Suez and the local Acwa Power International won a $61m deal to manage the water and wastewater networks in Jeddah.

NWC has also been pushing ahead with its programme for the sale and reuse of treated effluent.

In May, NWC signed a memorandum of understanding with Acwa Power and France’s Veolia for a treated water effluent reuse scheme in Riyadh. In early June, NWC signed a similar deal with France’s GdF Suez for resale of treated effluent in Jeddah.

Under the deals, the private contractors will set up joint ventures with NWC and the relevant municipality to buy treated effluent from NWC and sell it on to bulk consumers, such as factories and farms.

The water utility says it has chosen a consultant to advise on the PPP schemes in both cities, but has yet to award the contract.

Once appointed, the consultant will carry out a feasibility study and recommend a tariff at which the Riyadh and Jeddah joint ventures will buy the treated effluent.

NWC will present the feasibility study to the joint venture companies, which will then set the price at which they will sell on the treated effluent.

Separately, NWC is planning to sell off five existing wastewater treatment plants in Riyadh, two that are under construction and permits to build a further two.

In June, NWC was considering awarding contracts for the two new power plants as engineering, procurement and construction deals.

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