Emirates Utilities eyes BOT projects in UAE

20 February 2006

Abu Dhabi: A newly launched Abu Dhabi-Kuwaiti utilities joint venture plans to undertake BOT (build-operate-transfer) projects in the UAE as privatisation gathers pace in the country, its promoters said.

Emirates Utilities Company Holdings has been set up by Al Qudra Holding and Utilities Development Company Holdings, a unit of Kuwait's Kharafi Group in a 60:40 partnership.

"Emirates Utilities will handle all utilities such as power and water, infrastructure, sewage, airports, logistics, industrial and even environmental projects. The UAE, particularly Abu Dhabi, offers great opportunities for BOT, management and operations services in various sectors," said Salah Salem Bin Omair Al Shamsi, Chairman of Al Qudra Holding.

The new venture is capitalised at Dh5 million but Al Shamsi said every new project the company undertakes will be financed through debt and equity.

"Banks are willing to finance projects of any size and every investment will have a special purpose company [SPC] and each SPC will have its own investment criteria and financial model. So it is not necessary to have a large capital for the company."

The over three decade old Kharafi Group has a strong portfolio of BOT projects across the region from Kuwait to Egypt.

"We own five of the largest BOTs in the Middle East and we would like to play a more active role in the Gulf countries where privatisation is moving in a big way," said Marzook Al Kharafi, vice-president of Kharafi Group.

"So far eight of our projects are operational on BOT in different countries of the region and we are bidding for at least four or five projects currently and we have about 40 projects on our radar screen," he told Gulf News.

Among the projects operational are the Sulabiya Water Reclamation Plant in Kuwait with projected revenues of $2.5 billion over 20 years, the Mar Salam Airport in south-east Egypt, which is the first BOT airport in the Middle East, an air separation plant for petrochemicals in Kuwait and a huge car park at Beirut airport.

"We are bidding for a waste management project in the UAE," he said without elaborating.

The Kharafi Group is capitalised at $350 million and its assets are valued at $1.2 billion.

Al Qudra Holding had earlier announced plans of launching some 30 companies by end-2006 in various sectors. Some of the companies are operational.