Saudi Arabia invites bids for Jeddah 2 PPP sewage project

11 April 2018
New plant will have a treatment capacity of 300,000 cubic metres a day

Saudi Arabia’s Water & Electricity Company (WEC) has issued request for proposals (RFPs) to prequalified companies its planned Jeddah Airport 2 independent sewage treatment project (ISTP).

WEC announced on 11 April that RFPs had been issued to prequalified developers for the project to finance and build a 300,000 cubic metre a day (cm/d) sewage treatment facility. The facility will be designed and developed so it can be expanded to 500,000 cm/d in the future.

The project is likely to include the development of the greenfield Jeddah Airport 2 sewage treatment plant (STP) under a public-private partnership (PPP) model, in addition to the acquisition, refurbishment, operation and transfer of the existing 350,000 cm/d Jeddah Airport STP, which was originally built under a standard engineering, procurement and construction (EPC) contract. 

MEED reported in January that WEC had extended the deadline to 1 February for companies to submit expressions of interest (EOI) for the planned Jeddah Airport 2 ISTP.

The client had originally set a deadline of 30 November for interested firms to submit EOIs for the project, but extended the deadline to give more companies time to register interest in time for the prequalification process and subsequent tender.

The Jeddah Airport 2 project has faced a number of delays, having already twice been tendered under the EPC model. The project was originally tendered in 2012, but faced numerous delays as the client reconsidered the size and procurement model for the scheme.

The STP was retendered as an EPC project in 2015, with the deadline for proposals postponed several times until December 2016. However, the client has now decided to move ahead with the project either as a PPP scheme.

The Jeddah Airport 2 project is the second major STP that the kingdom is planning to proceed with under a public-private partnership (PPP) model.

For the first project, WEC is planning to oversee the development of a 330,000 cm/d ISTP in Dammam, in the eastern province of the kingdom.

The project will be developed under a 25-year sewage treatment agreement (STA), under which the sewage capacity will be provided by the National Water Company (NWC). WEC’s obligations under the STA will be guaranteed by a credit support agreement from the Saudi government.

MEED reported earlier in March that WEC had invited 10 prequalified developers to submit proposals for the Dammam ISTP.

For both projects, the successful developer will develop the project/bundle under a 25 year STA with WEC, under which the sewage capacity will be provided by NWC.

The advisory team working on the Dammam and Jeddah Airport 2 ISTP projects will be led by Japan’s Mizuho Bank, financial adviser, and will also include UK-based Atkins, owned by Canada’s SNC Lavalin, technical adviser, and US-based law firm White & Case as legal adviser.

The move towards the PPP model for developing STPs is part of the kingdom’s move towards attracting private financing for all future major utility schemes as a result of the severe impact the drop in oil prices is having on the government’s revenues. Privatising utilities is a key part of the kingdom’s Vision 2030 economic reform programme.

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