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  Water developers adopt selective stance

  19 September 2024

  UAE-based utility Sharjah Electricity & Water Authority (Sewa) and Saudi water offtaker Saudi Water Partnership Company (SWPC) each received a single bid for their recently-tendered independent water producer (IWP) projects.

  An all-local team comprising Acwa Power, Haji Abdullah Alireza & Company (Haaco) and AlSharif Contracting & Commercial Development submitted the sole proposal for the contract to develop the Jubail 4 and 6 IWP schemes in Saudi Arabia.

  This is a far cry from 2020 when SWPC received four bids for a contract to develop and operate the Jubail 3B IWP.

  However, the fact that SWPC received only two bids for the contract to develop the relatively smaller Ras Mohaisen IWP in April this year indicates that utility or water developers and investors have increasingly adopted a more selective stance when it comes to bidding for new projects.  

  "Combined, Jubail 4 and 6 is a large project and most developers are tied up with other ones, as there are many IWPs under way at the moment, not only in Saudi Arabia but throughout the GCC," says Robert Bryniak, CEO at Dubai-based Golden Sands Management (Marketing) Consulting.

  The Jubail 4 & 6 seawater reverse osmosis (SWRO) plants will have a total combined capacity of 600,000 cubic metres a day (cm/d) and will be developed under one contract.

  In comparison, the Ras Mohaisen IWP has a capacity of 300,000 cm/d while Sewa's Hamriyah IWP will have a capacity of 410,000 cm/d. 

  Bryninak cites that many developers are at, or near, their capacity and this makes it difficult to make short-term commitments without paying significantly more for skilled workers and key equipment component parts. 

  "Developers may be shying away from some of the larger projects because of this, especially knowing that tariffs need to be competitive to win.

  "Developers have to spend significant amounts just to bid on a project, and if unsuccessful, this sunk costs need to be eventually recouped on future projects.  And I think this is resulting in developers being more selective in terms of the projects they go after, focussing more on those where they believe they have a good chance of winning."

  The case is slightly different for the Hamriyah IWP, which is the UAE Northern Emirate's first major SWRO project to be procured on a public-private partnership (PPP) basis.

  Acwa Power submitted the sole proposal for the contract to develop the project in December last year.

  "This is Sharjah’s first IWP and, unlike other jurisdictions such as Oman, Abu Dhabi and Saudi Arabia, the emirate has yet to establish a track record with PPPs, especially in power and water," explains Bryniak

  Given several false starts and issues with past PPPs, it is likely for developers to shy away and focus their efforts on more established, and financially stronger, offtakers elsewhere in the region.

  Known for its strong risk appetite, Acwa Power signed the water procurement agreement with Sewa earlier this month and a team of France's Sidem and its parent company Veolia has been selected as the project's engineering, procurement and construction (EPC) contractor.

  This means discussions with banks and financial institutions could be nearing conclusion leading to the start of the project's construction. 

  Once the Hamriyah IWP reaches financial close and commercial operations, Bryniak says Sewa should attract more developers for future IWPs. 

  Going forward, procurers may also consider adopting new or additional measures to attract more developers in their future IWP projects and avoid incurring higher tariffs.

  In certain cases, a UAE-based executive with an international developer says the quality of the request for proposals (RFPs) being issued can be improved.

  MEED understands some of the recent RFPs lack comprehensive information or details, which leads contractors to add higher contingency costs to cover risks. 

  Bryniak concurs, adding that going forward, procurers throughout the GCC will need to spend more time and effort marking and promoting their IWPs and being more selective in terms of timing, in order to optimise competition.

  "They may also need to consider modifying their procurement processes to attract more bidders,  Otherwise,  they may continue to realise only one or just a few bidders with likely higher tariffs in the near term."

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  Jennifer Aguinaldo
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  Abu Dhabi and US firms form $100bn tech investment vehicle

  19 September 2024

  Abu Dhabi-based artificial intelligence (AI)-focused investment company MGX has partnered with US-headquartered BlackRock, Global Infrastructure Partners (GIP) and Microsoft to establish the Global AI Infrastructure Investment Partnership (GAIIP).

  The vehicle will "make investments in new and expanded data centres to meet growing demand for computing power, as well as energy infrastructure to create new sources of power for these facilities", Blackrock said on 18 September.

  The partnership will initially seek to unlock $30bn of private equity capital from investors, asset owners and corporates, which in turn will mobilise a total investment potential of up to $100bn when including debt financing.

  According to BlackRock, these infrastructure investments "will be chiefly in the US, fueling AI innovation and economic growth, and the remainder will be invested in US partner countries".

  It added: "This partnership will support an open architecture and broad ecosystem, providing full access on a non-exclusive basis for a diverse range of partners and companies.

  Leading graphics processing unit manufacturer Nvidia, also US-based, will support GAIIP by offering its expertise in AI data centres and AI factories, to benefit the AI ecosystem.

  "GAIIP will also actively engage with industry leaders to help enhance AI supply chains and energy sourcing for the benefit of its customers and the industry," the statement added.

  The founders of the partnership bring together leading global investors BlackRock, GIP and MGX with funding as well as expertise from Microsoft.

  Through its partners, GAIIP combines an understanding of infrastructure and technology to drive efficient scaling of data centres with energy, power and decarbonisation investment capabilities for related enabling infrastructure for AI.

  Commenting on the deal, MGX chairman Sheikh Tahnoon Bin Zayed Al-Nahyan said that AI "is not just an industry of the future, it underpins the future".

  He said: "Through this unique partnership, we will enable faster innovation, technological breakthroughs and transformational productivity gains across the global economy."

  “Mobilising private capital to build AI infrastructure like data centres and power will unlock a multitrillion-dollar long-term investment opportunity,” said Larry Fink, BlackRock chairman and CEO. “Data centres are the bedrock of the digital economy, and these investments will help power economic growth, create jobs and drive AI technology innovation.”

  Related read: Region plays high-stakes AI game

  Photo credit: Pixabay

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  Jennifer Aguinaldo
• 
  Tabreed eyes geothermal cooling for data centres

  18 September 2024

  

   

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  Following the successful implementation of a geothermal cooling plant proof of concept in Masdar City in Abu Dhabi, the National Central Cooling Company (Tabreed) is considering potential pilot projects for geothermal cooling plants for data centres.

  "Heat from geothermal wells, along with the heat produced by the data centre facility, can be captured and used to supply power for cooling the data centre," Khalid Marzooqi, Tabreed chief executive, told MEED on the sidelines of the ongoing World Utilities Congress in Abu Dhabi. 

  Marzooqi said Tabreed is talking to several data centre service providers and soliciting proposals for a potential pilot project.

  "Sustainability is a big ticket item for data centres," said Marzooqi, adding that a remotely located, off-grid data centre could be an ideal first project, where geothermal wells can be drilled within five to 10 metres of the facility to supply power to a captive power or cooling plant.

  Tabreed and Abu Dhabi National Oil Company (Adnoc) announced the start of operations in December 2023 at G2Cool, a district cooling project harnessing geothermal energy. The geothermal cooling plant provides 10% of Masdar City's requirements.

  The two geothermal wells have temperatures exceeding 90 degrees centigrade and flow rates of approximately 100 litres a second.

  The doublet provides hot water that is fed into absorption cooling technology to produce chilled water, which is then utilised for Tabreed’s district cooling activities.

  The two geothermal wells being utilised for the project were drilled in 2009-10 under a project carried out with Iceland's Reykjavik Geothermal.

  "Advancements in geothermal and district cooling technologies, as well as development at Masdar City, compelled the partners to revisit the project," Tabreed and Adnoc, which is financing the project, said in December.

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  Jennifer Aguinaldo
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  Taqa Water Solutions to launch TSE plant project

  18 September 2024

  

   

  Taqa Water Solutions, formerly Abu Dhabi Sustainable Water Solutions, is reviewing a previous plan to procure an advanced treated sewage effluent (TSE) plant that has an initial design capacity of 750,000 cubic metres a day (cm/d).

  A plan to procure the project could be launched in line with the emirate's circular carbon economy push, Nader Assad Bin Taher, chief operating officer of Taqa Water Solutions, told MEED on the sidelines of the ongoing World Utilities Congress in Abu Dhabi.

  He said that the process is under way to finalise the way forward for the project, which might eventually have a bigger capacity than initially planned.

  MEED understands that the final procurement model for the project is also being discussed.

  MEED reported in February 2023 that five companies and consortiums had submitted bids for the engineering, procurement and construction contract.

  Among those that submitted proposals for the contract on 23 January were Spain's Acciona, UAE-based Tecton Engineering, and a team comprising Spanish contractor Abengoa and local contracting company Emarat Aloula.

  It is understood that the project has been put on hold following the expiry of bid bonds.

  The initial plan entailed a TSE plant that is expected to have a design capacity of 700,000 cm/d, with the potential to expand this capacity to 950,000 cm/d in a subsequent phase, as MEED reported.

  The TSE facility will produce water for higher-end applications compared to TSE produced in a standard sewage treatment plant.

  Twelve individual companies and teams were prequalified to bid for the contract in 2022. They were:

  • Abengoa (Spain)
  • Acciona (Spain)
  • Aqualia (Spain)
  • Aquatech (local)
  • Hydropower / BEWG (Germany)
  • Metito / GCC
  • Six Construct (local) / Veolia (France)
  • Sepco 3 (China)
  • Tecnicas Reunidas (Italy)
  • Tecton (local)
  • VA Tech Wabag (India)
  • Orascom (Egypt) / Cobra (Spain)

  The scheme is one of the first major water treatment projects to be launched in Abu Dhabi in recent years.

  Canada’s Stantec is the project’s technical consultant. 

  Bin Taher also confirmed that the bid evaluation process is under way for smaller TSE polishing plant in Abu Dhabi. Located in Khalifa Industrial Zone Abu Dhabi (Kizad), the plant has a capacity of 25 million litres a day, or about 25,000 cm/d.

  Abu Dhabi National Energy Company (Taqa) announced the completion of its agreement to acquire Sustainable Water Solutions Holding Company (SWS Holding), formerly Abu Dhabi Sewerage Services Company, for AED1.7bn ($463m), earlier this month.

  SWS Holding is the sole entity responsible for wastewater collection and treatment, as well as the production of recycled water in Abu Dhabi.

  Taqa announced the rebranding of the company as Taqa Water Solutions in mid-September.

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  Jennifer Aguinaldo
• 
  Saudi Arabia tenders Riyadh Metro Line 7

  18 September 2024

  

   

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  The Royal Commission for Riyadh City (RCRC) has issued the request for proposal notice to selected firms to design and build Line 7 of the Riyadh Metro project.

  MEED understands that the client issued the tender notice in mid-September. The RCRC has given consortiums six months to prepare the bids.

  The submission deadline is 10 March 2025.

  The RCRC received prequalification forms from contractors for the tender in February this year.

  MEED previously reported that several of the consortiums planning to bid for the contract to deliver Line 7 of the Riyadh Metro have changed. Some civil contractors have joined teams, while others have decided not to participate in the tender.

  According to sources close to the project, the consortiums planning to bid for the project include:

  • Alstom (France) / FCC (Spain) / Freysinnet Contracting (local) / WeBuild (Italy) / Nesma (local) 
  • Siemens (Germany) / Samsung C+T (South Korea) / Acciona (Spain) / Alayuni (local)
  • Hitachi Rail (Japan) / OHLA (Spain) / Daewoo (South Korea) / Hyundai E&C (South Korea) / Almabani (local) / Albawani (local)
  • CRRC (China) / Mapa (Turkiye) / Limak (Turkiye)

  Spanish consulting firms Typsa and Ayesa, along with US-based Aecom, are the design consultants for the Alstom-led consortium.

  Spain-headquartered Idom, South Korea’s Dowha and Switzerland’s Pini are the designers for the Siemens-led team.

  Spanish engineering firm Sener is the design consultant for the Hitachi Rail-led group.

  The project involves constructing a metro line linking Qiddiya Entertainment City, King Abdullah International Gardens, King Salman Park, Misk City and Diriyah Gate. The total length of the line will be about 65 kilometres (km), of which 47km will be underground and 19km will be elevated.

  The line will have 19 stations, 14 of which will be built underground and five overground. 

  The consultants working on the scheme are France’s Egis and Lebanon-based Dar Al-Handasah, according to regional project tracker MEED Projects.

  In June 2020, a joint venture led by French consultancy Systra won the preliminary design contract for the second phase of Saudi Arabia’s Riyadh Metro.

  Riyadh Metro

  Riyadh Metro’s first phase features six lines with 84 stations.

  In November 2022, the RCRC struck a deal with three contracting consortiums working on the Riyadh Metro scheme regarding the completion of the project’s remaining works.

  Construction activity on the project had slowed in recent years due to disputes over prolongation and the disruption caused by the Covid-19 pandemic. The RCRC awarded the main construction packages for the scheme on 28 July 2013.

  The Fast consortium won lines 4, 5 and 6, reportedly valued at $7.82bn. The Bacs consortium was awarded lines 1 and 2 for $9.45bn, while Arriyadh New Mobility secured Line 3 for $5.21bn.

  US firm Bechtel leads the Bacs consortium. Italian firm Ansaldo STS is the leader of the Arriyadh New Mobility group, and Spanish firm FCC Construccion heads the Fast consortium.

  AtkinsRealis has delivered programme management and supervision services for the operations and maintenance of the Riyadh Metro scheme.

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  Yasir Iqbal