PPPs emerge as model-of-choice for Gulf water infra projects

Water infrastructure spend is steadily increasing in the Gulf, with PPPs emerging as the model-of-choice for the sector’s developers

PPPs are gaining traction as development models for water infrastructure projects in the GCC.
PPPs are gaining traction as development models for water infrastructure projects in the GCC.

A new wave of development is under way in the GCC, where large-scale investments are rapidly being made to build and upgrade core infrastructure projects. Water treatment plants (WTPs) make up one of the asset classes towards which much of this public sector spend is being diverted.

This June, it was announced that Saudi Arabia-headquartered ACWA Power is part of a consortium named as the preferred bidder for an independent water plant (IWP) in Umm Al Quwain, UAE. The UAE’s Federal Electricity and Water Authority (FEWA) has appointed the consortium led by ACWA and Tecton Engineering and Construction as the preferred bidder for the facility, which has a capacity of 45 million imperial gallons per day (MIGD).

The sea-water reverse osmosis (SWRO) IWP in Umm Al Quwain will deliver desalination services, and is FEWA’s first in cooperation with the private sector. Mohammed Salah, director-general of FEWA, said the authority “intends to commence three other desalination plants following the same model, which will be tendered before the end of this current year”.

According to a WAM report, he said that the locations and capacity of the three other plants had been defined as per a study implemented by FEWA.

READ: Kuwait invites bidders for PPP power and water plants

ACWA Power’s home market, Saudi Arabia, is also upgrading its water infrastructure to meet anticipated demand in the long term. In July, UK-based Bluewater Bio announced it had won a $2.6m (SAR9.7m) contract from Marafiq to upgrade a water treatment plant in Jubail Industrial City, called IWTP-8. Bluewater Bio will install its modular construction wastewater treatment system, Hybacs, to help Saudi utility firm Marafiq increase IWTP-8’s treatment capacity by 150%.

It is the company’s first contract to install its patented Hybacs system in Saudi Arabia, and Marafiq claims it will be able to treat up to 50 million litres per day (MLD) of industrial wastewater after the upgrade.

Tunisian contractor, EPPM, was picked to manage enabling and civil construction works for the project.

These are only some of the many water projects under way in the UAE and Saudi Arabia, two of the Gulf’s largest construction markets. However, even Kuwait, Oman, and Bahrain have made significant investments this year to boost the level of their nationwide water management programmes. As is the case in the UAE, public-private partnerships (PPPs) are emerging as the model of choice to develop the water infrastructure in Kuwait and Oman as well.

Last month, Kuwait Authority for Partnership Projects (KAPP) invited local, national, and international companies to issue expressions of interest (EOIs) for two water and power projects – Al-Khairan Phase 1 and Az-Zour North 2 and 3.

Opening up the market to private stakeholders may reduce the public sector’s cost of scaling up power and desalination plants, as well as improve production reliability and bolster competition in Kuwait, KAPP said.

The scope of work for Al-Khairan Phase 1 includes the design, build, finance, operation, and transfer of a power generation and water desalination plant. The combined-cycle power plant will have a net water capacity of 125 MIGD.

The net cast for PPPs is even wider in Oman. The sultanate recently unveiled a $15.6bn (OMR6bn) masterplan – developed by Haya Water – that includes the scope for PPPs during the construction and operation stages of sanitary drainage projects across the country, except in the Muscat and Dhofar governorates.

Suleiman bin Khamis al-Qasmi, director general of asset management at Haya Water, said the masterplan would raise the number of WTPs in the sultanate to 133, with total capacity increasing to 979,000m3 per day. Stage 1 of the project includes 21 WTPs, and its second stage includes 65 medium WTPs that will serve 17% of the population.

Water demand will rise in the Gulf as population numbers increase – the good news is that regional governments are well-prepared to meet these requirements. 

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