|12 February, 2019

Execution of big-ticket water projects expected to gain pace in 2019

Major schemes in Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates expected to move ahead this year

Image used for illustrative purpose. A worker stands at a desalination plant, 35 lm south of Riyadh, May 4, 2011.

Image used for illustrative purpose. A worker stands at a desalination plant, 35 lm south of Riyadh, May 4, 2011.

REUTERS/Fahad Shadeed

Saudi Arabia and the UAE are expected to offer huge business opportunities in the water sector as a number of big-ticket contracts are up for tendering through 2019, a senior executive of a Spanish water treatment firm has said.

 “We expect to see at least three wastewater treatment plants with a total capacity of one million cubic metres per day (m3/day) and three-to-four seawater reverse osmosis (SWRO) desalination plants totalling two million m3/day capacity to be tendered in Saudi Arabia this year,” said Julio De La Rosa, Acciona Agua business development director for the Middle East.

Saudi Arabia has taken the leadership in the region’s water sector through its three principal water bodies – Water and Electricity Company (WEC), Saline Water Conversion Company (SWCC) and National Water Company (NWC), he told Thomson Reuters Projects during an interview in Abu Dhabi last month.


In January, De La Rosa continued, NWC released the 250,000 m3/day Haddah and 600,000 m3/day Arana wastewater treatment plants while SWCC invited Engineering, Procurement and Construction (EPC) bids for the 600,000 m3/day Rabigh 4 desalination plant.

“In the UAE, we expect the Dubai Electricity and Water Authority (DEWA) to float another 120 million imperial gallons per day (MIGD) desalination plant in Hassyan by the end of the year,though it’s unclear whether it would be tendered as an Independent Water Project (IWP) or as Engineering, Procurement and Construction (EPC) project,” he said.

In December last year, DEWA had floated an advisory services tender for 120 MIGD Hassyan SWRO project, its first ever IWP.

De La Rosa added that Emirates Water and Electricity Company (EWEC), the successor to Abu Dhabi Water and Electricity Company (ADWEC), could tender “another Taweelah-like project” before the end of the year.

The UAE’s largest desalination plant in Taweelah, with 900,000 m3/day capacity was tendered in January last year. In November 2018, the Abu Dhabi Department of Energy (DOE) said in a press statement that seven bids have been received and are being evaluated.

Others projects scheduled for tendering in 2019 include 300,000 m3/day Al Ghubrah III Independent Water Project (IWP) and 100,000 m3/day Barka V IWP in Oman; Al-Khairan Phase 1 and Az-Zour North 2&3 Independent Water and Power Projects (IWPP) in Kuwait and Doha West 2 Sewage Treatment Plant in Qatar.

“We expect advisory services tenders for the Kuwait IWPPs in March,” he said.

In July last year, a Thomson Reuters Projects report, citing a Kuwait Authority for Partnership Projects (KAPP) public notice, said Az-Zour North Phase 2 & 3 would generate 2,700 megawatts (MW) of power and 165 750,105 m3/day of desalinated water while Al Khairan Phase 1 would generate 1,800 MW of power and 568,261 m3/day of water.

An eventful 2018

Last year saw two large desalination plants being awarded in Saudi Arabia – 600,000 m3/day Rabigh-3 Independent Water Project (IWP) and 450,000 m3/day Shuqaiq-3 IWP – toting up more than one million m3/day capacity.

Acciona Agua was part of the winning consortium for Shuqaiq-3 IWP with Marubeni Corporation, Abdul Latif Jameel Commercial Development Company and Rawafid Alhadarah Holding Company, according to a January 2019 statement posted on the WEC website.

De La Rosa noted that a total of four water projects were tendered by WEC in 2018, and added that company had successfully bid for desalination projects developed by the state-owned SWCC.

In July 2018, the company was awarded a Design-Build contract worth more than €200 million by SWCC for the 210,000 m3/day Al Khobar desalination plant Phase 1.

He added that a consortium Acciona was in with Riyadh-based Al Rashid Trading & Contracting Company (RTCC) had emerged as the second-lowest bidder for the 600,000 m3/day Al Khobar Desalination Phase 2 when bids were opened in December last year.

Aggressive bidding

De La Rosa said that desalination projects in the Gulf have set new records in pricing, with the Taweelah project in Abu Dhabi registering the lowest bid at $0.49/m3 while Shuqaiq 3 closed at $0.52/m3 and Rabigh 3 at $0.53/m3.

When queried on whether such prices were sustainable, he noted that “when you are presenting a Public-Private Partnership (PPP), you are not presenting a project for today but for 25 years”.

“So the assumptions you are making in the financial model will take you to one point or another. I hope this price will not go too low but with the right investment in R&D and lessons learned, there is scope for further reductions.”

De La Rosa also pointed out that a common factor connecting the major projects awarded last year was the use of SWRO membrane technology and the shift away from thermal desalination, which had long held sway in the Gulf.

“For example, ADWEC [Abu Dhabi Water and Electricity Company] had done a flexibility study and they found it worthwhile to pay the capacity term of the PPP that they have under the previous technology and build new facilities under RO because of the efficiency of the photovoltaic (PV) and RO technologies currently,” he concluded.

Abu Dhabi has set a target for increasing the share of RO technology in desalination from 13 percent at present to 30 percent by 2022, according to a DOE statement published in November.

(Reporting by Anoop Menon; Editing by Michael Fahy)


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