FEWA reaches ‘pay-by-usage’ deal with Utico

UAE-based Utico, a private utilities provider, has signed a 10-year ‘pay-by-consumption’ agreement with the Federal Water and Electricity Authority (FEWA) to serve the Northern Emirates

Richard Menezes, managing director, Utico.
Richard Menezes, managing director, Utico.

UAE-based Utico, a private utilities provider, has signed a 10-year ‘pay-by-consumption’ agreement with the Federal Water and Electricity Authority (FEWA) to serve the Northern Emirates.

The purchase contract model allows the federal utilities authority to pay only for actual water consumption, the UAE official news agency WAM reported.

According to the agreement, there will be a minimum consumption commitment of 6 million imperial gallons per day (MIGD) which is already operational. The current daily consumption by FEWA has already increased 8 to 10MIGD with rising water demand. Another additional 9MIGD contract has also been requested by FEWA, the WAM report continued.

“The agreement sets a new benchmark in the world for such contracts. Usually utility agreements are `take or pay’ contracts wherein the buyer ends up paying the supplier even if there is no consumption,” said Richard Menezes, managing director, Utico.

Other unique features of the Utico-FEWA agreement includes fixed pricing during the tenure of the agreement and no power tariff increase pass through during this period

Menezes also noted that in line with the rising demand, Utico’s investments in UAE facilities have crossed $218m (AED 800m).

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