Dubai, Mar. 9, 2006 (WAM) -- The Dubai Electricity and Water Authority (Dewa) has invited bids for a new power and desalination plant, M Station, which will increase power generation by 2,000 mega watts and water desalination capacity by 105 million gallons per day, estimated to cost Dh5.5 billion.

This will be Dewa's largest power and desalination plant to be commissioned by 2010, and is being floated ahead of the signing of a major contract for the L Station Phase II, according to a Gulf News report.

The tender comprising two packages the power plant package, consisting of gas turbines associated with heat recovery, steam generators and associated works, while the desalination package consists of a multi-stage flash desalination unit and associated works.

Bidders have a choice of submitting bids for either package or both, or form a consortium and bid for both on or before June 24, accompanied with a 5 per cent bond on the value of the bid.

Dewa, which will sign a contract for the L Station Phase II at Jebel Ali with a consortium of Hyundai Engineering and Fisia Italim-pianti next week, is fast tracking its developments due to strong demand.

Hyundai will get $700 million, while its partner will build the $300 million desalination plant under the L Station Phase II.

"We have released tenders for the M Station's construction due to strong demand for power and desalinated water, as major development projects are being launched by investors and developers," Abdullah Al Hajri, Dewa spokesperson, told Gulf News yesterday.

"We constantly update the data as the developers release new projects and give their requirements. The tender for the M Station has been floated early as per the demand and requirements." Major contractors are getting ready to bid for the project.

"The total value of projects of such magnitude would exceed $1.5 billion," an official of a large utility contracting company said.

Demand for electricity is growing by 12 to 14 per cent per year, more than five times than that of Europe and North America.

Last year, peak water demand rose to 194 million gallons from 177 million in 2004. This is likely to exceed 213 million gallons at the end of the current year and rise to 341 million by 2011.

Peak electricity demand rose to 3,571 megawatts from the previous year's 3,228 megawatts and is expectesd to exceed 8,513 megawatts by 2011, double the current demand.

Dewa will invest more than Dh20 billion in power generation, transmission and distribution in the next ten years to raise generation capacity to more than 9,000 megawatts.