Thursday, Apr 09, 2009

Gulf News

Dubai: Dubai Electricity and Water Authority (Dewa) will take a fresh look at its planned multi-billion dirham projects after June to see how much more capacity it needs to build to meet the emirate's utility needs amid the decline in construction activity.

Dewa managing director and chief executive officer Saeed Mohammad Al Tayer said yesterday electricity consumption in Dubai increased by 13 per cent in January and by 17 per cent in February but a "realistic forecast" of demand will be available in May and June.

The utility provider is working on three scenarios of low, medium and high demand and cannot stick with just one projection, Al Tayer said at press conference held to announce the closure Dewa's loan transaction of $2.2 billion (Dh8.1 billion) to refinance an "ijara" facility maturing this month.

Before economic downturn slowed years of feverish construction activity in the emirate, Dewa had plans to invest more than Dh70 billion in power generation and water desalination projects in the next five years to satisfy rising consumption.

Now that the construction sector is witnessing project delays and cancellations, Dewa may also adjust its investment plans after the second quarter.

"We are flexible. We will be able to even review projects," Al Tayer said.

The centerpiece of Dewa's investment plans is the Hassyan project in Jebel Ali at an estimated Dh22 billion cost.

The project, to be developed in phases to a capacity of 9,000 megawatt of power and 720 million gallons of water per day, is delayed by one year after potential contractors sought more time and Dewa had enough reserve capacity.

Companies have until September to bid for first phase project of 1,500MW, with the winning bidder expected to be announced in January 2010.

Ratings agency Moody's said in a note this month that Dewa's expansion plans are likely to be revised downwards in response to weaker growth in Dubai.

"Thus Dewa may actually benefit from a slowdown of Dubai's growth, as the new capacity it will be required to install would be phased over a longer period," it said.

Dewa has more than 480,000 customers. Its power generation capacity is 5,448 megawatts.

Gulf News 2009. All rights reserved.