Palm Water wins Nakheel deal

09 Oct 2006

Dubai: Palm Water LLC, an Istithmar subsidiary, yesterday said it had been awarded a Dh1.68 billion ($400 million) contract by Nakheel to design, build, own and operate (DBOO) a sewage treatment plant as well as sewage and irrigation networks that will cater to several property developments in Dubai.

The deal comes close on the heels of a Dh1 billion contract won by Palm Water to set up a similar project for Nakheel at International City, Dubai.

The new sewage treatment plant (STP) will serve Dubai's premier golf developments including Jumeirah Golf Estates being constructed by Istithmar Leisure, an arm of Istithmar that invests in strategic leisure projects.

Planned near Jumeirah Golf Estates, the new STP will have a capacity to treat about 220,000 cubic metres of sewage each day.

Under the contract, Palm Water LLC will be granted a 30-year concession to provide both sewage and irrigation services on behalf of Nakheel.

Scope

The scope of the contract awarded to Palm Water covers designing, supplying, constructing, owning, operating and maintaining the STP, as well as owning, operating and maintaining the pumping stations and tanks.

International companies are expected to be involved in the design and construction of the STP.

A proposal is expected to be issued to pre-qualified bidders within the next four to six weeks.

The contract for the design and construction is expected to be awarded early in 2007. KEO is providing Palm Water with technical support on the project while Allen & Overy are the legal counsel.

Hyflux Ltd will be involved in the process design services. The ADCB Macquarie Corporate Fin-ance Joint Venture is providing financial advisory support.

The STP will serve Lake Towers, Dubai Multi Commodities Centre, Jumeirah Islands, Jumeirah Park and Jumeirah Village.

Phases

The plant will be built in phases, with the first phase expected to go on stream by April 2008.

Until then, sewage from these developments will be treated at the nearby Gardens STP. The Jumeirah Golf Estates STP will reach full capacity by 2010.

Yousuf Kazim, chairman of Palm Water, said: "When fully operational, this STP will be one of the world's largest Membrane Bio-Reactor (MBR) plants. Palm Water is evolving both the experience as well as the expertise in the execution of projects of this magnitude.

"This particular project is in line with further integrating our competencies in the water industry."

The STP will produce sufficient treated effluent to supply all the irrigation needs of the nearby golf courses being designed and constructed by Istithmar Leisure.

Palm Water is owned 95 per cent by Istithmar PJSC, the investment arm of Dubai World, and Hyflux Ltd own the rest.

Palm Water is presently implementing two desalination plants located on the Palm Jumeirah and an STP at International City.