Saudi Arabia invites interest in PPP sewage treatment plants

06 November 2017
Projects will have a total combined treatment capacity of more than 800,000 cubic metres a day

Saudi Arabia’s Water & Electricity (WEC) has invited companies to submit expressions of interest for two major sewage treatment plants (STPS) in the kingdom, which will be developed under a public-private partnership (PPP) model.

For the first project, WEC is planning to oversee the development of a 330,000 cubic metres a day (cm/d) independent sewage treatment plant (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.

Developers have until 20 November to submit expressions of interest (EOI) for the sewage treatment plant tender.

The second planned project is the Jeddah Airport 2 ISTP, which will have a total treatment capacity of 500,000 cm/d. The new ITSP will be located adjacent to the existing 350,000 cm/d Jeddah Airport STP. WEC is also considering to bundle in the potential acquisition, refurbishment, operation and transfer of the existing Jeddah Airport STP, owned by NWC, in with the planned ISTP.

Developers have until 30 November to submit EOI in the planned Jeddah Airport 2 project or bundle. As with the planned Dammam ITSP, 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 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 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. MEED reported in September that the advisory team had been selected for a handful of planned PPP sewage treatment plants and related projects.

In an exclusive interview with MEED in October 2016, NWC’s then-CEO Abdulrahman al-Ibrahim said the company would focus on utilising PPP models to develop future sewage treatment plants. The move towards the PPP model 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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