Riyadh to issue Al-Kharj plant tender in February

27 January 2010

Twenty-five companies apply to prequalify for project

Saudi Arabia’s National Water Company (NWC) hopes to issue a tender for the construction of a wastewater treatment plant at Al-Kharj in Riyadh in the first week of February, according to a source at the utility.

About 25 companies applied to prequalify to bid for the project in late 2009, but the client has yet to announce the list of prequalified bidders for the 100,000 cubic metre a day (cm/d) scheme.

Contractors say the client has repeatedly told them since then, that it will release the invitation to bid “next week”.

NWC had originally planned to tender the Al-Kharj project on a build-own-operate (BOO) basis as part of a wider wastewater treatment plant privatisation process in Riyadh. However it failed to secure a finance ministry guarantee for the privatisation scheme and has decided to go ahead with the Al-Kharj project on the basis of an engineering, procurement and construction (EPC) contract instead.

Under the original privatisation plan, NWC intended to bundle together existing plants at Al-Kharj with a concession for a new project, before selling the entire package to a private developer.

As a result, the developer would have taken over a 100,000 cm/d plant which is already in operation, as well as a second plant of the same size that is now under construction by the local Al-Khuraif Group at the site.

The Al-Kharj privatisation was to be followed by a separate bidding process covering facilities at Al-Hayer, where a private company would take over a 400,000 cm/d plant under construction and build a new facility that is the same size.

According to NWC, a number of companies such as the Kuwait’s Al-Kharafi National, UAE/German joint venture Metito Berlinwasser and local firms Sete Energy and Miahona have stated their ongoing interest in the projects even without credit support from the finance ministry.

NWC also says the UK’s HSBC has confirmed it could obtain a positive credit rating and therefore overcome the problem of credit risk.

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