Three in negotiation for Salalah wastewater

28 June 2002

Three companies and groups are in negotiation with the Ministry of National Economy for a two-year contract to operate and maintain the Salalah wastewater system, the first stage in the privatisation of the city's sewerage system, sources close to the project say. This will be the first wastewater privatisation in the sultanate and it is expected to clear the way for the privatisation of the Muscat sewerage system (MEED 8:2:02).

Six companies originally bid for the operation and maintenance (O&M) contract and this number has been narrowed down to the present shortlist. Plans call for the contract to be approved in September. Depending upon satisfactory completion of the contract, a one-year extension will be awarded. This will then lead to a 20-year contract to operate the wastewater system on a privatised basis.

In February, a commercialisation study was prepared by project finance advisers Ernst & Young. The firm put together its proposals with the assistance of legal and technical advisers Curtis, Mallet-Prevost, Colt & Mosle (CMP)of the US and Mott MacDonald of the UK (MEED 31:8:01).

This led to the creation of the Salalah Sanitary Drainage & Services Company (SSDSC), which manages the system.

The local Galfar Engineering & Contracting is building the associated sewerage network at Salalah, which will eventually serve some 134,000 people. The wastewater treatment facility, built by ABB SUSAof the US, currently has the capacity to treat 20,000 cubic metres a day of effluent.

Speaking at MEED's Opportunities in Middle East Water Projects conference in London on 19 June, Ernst & Young senior executive Navid Chamdia said that the plan calls for shares in SSDSC to be sold to the private sector in three years and for the company to be listed on the Muscat Securities Market (MSM).

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