Adwea reverts to tender for IWPP

 

Abu Dhabi Water and Electricity Authority (Adwea) has reverted to its competitive tendering process for Shuweihat 2 (S2) – with international companies in the race, including the United Kingdom’s International Power and Japan’s Marubeni Corporation.

The tender is the firm’s eighth independent water and power project (IWPP).

In an unusual move, Adwea, in late October this year, invited two developer groups to submit proposals for S2 instead of the usual competitive tendering process among pre-qualified developers. The two groups invited were the International Power with Marubeni Corporation and Belgium’s Suez Energy. They provided the best two bids for Adwea’s recent Fujairah 2 IWPP.

“None of the invited groups submitted the proposals and it is back to the regular competitive tendering process,” Ranald Spiers, Regional Director of International Power told Business 24|7. A top official of Adwea’s Regulation and Supervision Bureau confirmed international companies that were prequalified have been invited to submit bids for S2, whose project cost is estimated at more than $2 billion (Dh7.34bn).

“It will now be a regular competitive process as we had for our previous IWPPs. The pre-qualified companies have to submit bids before the end of March 2008,” said the official who did not want to be named.

He said the companies that prequalifed include UK’s International Power, the US’ AES, Electriciti De France (EDF), Total, Hong Kong Electric, Korea Electric Power Company, GE and Belgium’s Suez Energy. Japanese companies include Marubeni, Sumitomo and Tokyo Electric Power Company among others. The S2 greenfield project will be located near Jebel Dhana, 260km west of Abu Dhabi city and will have a capacity of 1600MW of power and 100 million gallons per day (mgpd) of water. Adwea decided to invite the two groups in an attempt to accelerate the implementation of the S2, output from which will partly be used for the upcoming aluminium smelter in the western region.

Abu Dhabi pioneered the privatisation of water and power in the Gulf when it kicked off its first such project, the Taweelah A2 in late 1998. Over the past 10 years, Adwea has privatised seven IWPPs and has also embarked on privatising its sewerage sector. The public utility firm is also looking to outsource management of its distribution networks.

Private sector involvement has attracted billions of dollars of investment from international developers and has also led to reduction in the cost of producing water and electricity.