Hassyan tender superseded by privatisation

The already tendered Hassyan project will be replaced and superseded by Dewa's privatisation plan, Emirates Business has learnt.

This means tenders submitted for the Dh22 billion project will be kept on hold until the privatisation study is finalised.

"The IPP is a 1,500mw power plant and it will replace the one that we have tendered," Saeed Mohammed Al Tayer, Dewa MD and CEO, said on the sidelines of GE gas turbines users conference yesterday.

"It is about Dh8bn and the commissioning of the first phase may be in the first quarter of 2014," he said.

"We are now looking at selecting an advisory consultancy. It will close on February 22, then when we complete the financial and the legal aspect after three months, we will float the tender and then we will select the best offer."

This newspaper broke the story in February last year that Dewa has deferred the bidding dates for the first and second phase of Hassyan Power Generation and Desalination Plant project (Plant P) to September 2009 from the original schedule of August 2008.

Industry estimates show that each phase costs $1bn (Dh3.6bn). Both will have power capacity of 1,500mw and 100 million gallons of water a day and both phases will include four gas and two steam turbines and seven desalination units.

Dewa then said the first tender would be closed on September 8, 2009 with the winner to be announced on January 6, 2010. The second tender would be closed on September 13, 2009 with the winner to be announced on January 12, 2010, the authority said earlier.

A source close to the matter said the first tender for the power plant was closed on November 8, instead of September 8, but the winners remain unknown. Tenders, he said, is until now has been held for review.

"The winners should have been announced last week, as per the announcement, but we have received no communication," he said.

The plan for the second tender, he added, is also not clear. The tender for the Hassyan Power and Desalination Complex Sea Water Intake and Outfall System, due to close on January 25, is also expected to be kept on hold until the privatisation study is completed.

Most of the tenders were expensive, said Abdullah Al Hajri, Executive Vice-President, Customer Services, Dewa. "We did not get proper and sufficient tenders. They are expensive. So we are waiting a little longer and we will announce the winners once the results of the privatisation study are completed," he said.

Dewa will only open up the power generation segment to the private sector while transmission and distribution will remain under its domain. All existing plants will continue to be run by Dewa, said Waleed Salma, Vice-President, Business Development at Dewa.

The set-up will be a win-win situation both for Dewa and the private sector, said Khalid Al Awadi, an energy consultant who is also a gas operations manager in the UAE. "When the private sector and Dewa has a sale agreement per kw/hour. It will produce for Dewa a kw/hour price and in that they don't make loss – it's a guaranteed profit," he said.

"Fuel is 95 per cent of the cost and it will be supplied by Dewa. The private operator will not have any chance of losses," he added.

Dewa serves 600,000 customers and has about 7,000mw power generations.

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