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• 
  Neom cancels $1.5bn desalination plant project

  17 May 2024

  

   

  The joint development agreement (JDA) for a project to develop a zero liquid discharge plant in Saudi Arabia's Neom has expired and has not been renewed, leading to the cancellation of the project, sources familiar with the scheme tell MEED.

  A consortium of Neom subsidiary Enowa, Japan’s Itochu and France’s Veolia signed a JDA for the scheme in December 2022, approximately six months after they signed a memorandum of understanding to develop the renewable-energy powered advanced seawater reverse osmosis project in Oxagon, Neom’s industrial cluster.

  The proposed plant was to deliver up to 2 million cubic metres a day (cm/d) of desalinated water to Neom, equivalent to about 30% of the gigaproject's expected total water demand once complete.

  The entire facility was understood to require a total investment of $1.5bn-$2bn.

  The developer team initially indicated that the target commercial operation date for the project's first phase, understood to have a capacity of 500,000 cm/d, was 2025. 

  In a statement sent to MEED, Enowa said Neom's water requirements have evolved over the last year "leading us to adopt a stepwise approach to expanding capacity".

  It continued: "As a result, we've decided to discontinue our joint development agreement (JDA) for this project. This decision was made after open communication and extensive discussions to ensure mutual understanding and commitment.

  "Our dedication to delivering sustainable and innovative solutions remains unchanged, and we value our collaboration with international partners as we adjust our approach to best serve Neom's long-term goals."

  Advanced technology

  In addition to using 100% renewable energy, the proposed state-of-the-art desalination plant intended to use advanced membrane technology to produce separate brine streams, enabling the production of brine-derived products to be developed and monetised downstream.

  The plan involved converting brine, the main waste output of desalination, into industrial materials to be used locally or exported internationally.

  At the time, Enowa said brine generated from the desalination plant would be treated to feed industries utilising high-purity industrial salt, bromine, boron, potassium, gypsum, magnesium and rare metal feedstocks.

  Neom appointed Japan’s Sumitomo Mitsui Banking Corporation as financial adviser for the project. UK-based DLA Piper was the legal adviser and Canada’s WSP was the technical adviser.

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  MEED's April 2024 special report on Saudi Arabia includes:

  > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
  > BANKING: Saudi lenders gear up for corporate growth
  > UPSTREAM: Aramco spending drawdown to jolt oil projects
  > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
  > POWER: Riyadh to sustain power spending
  > WATER: Growth inevitable for the Saudi water sector
  > CONSTRUCTION: Saudi gigaprojects propel construction sector
  > TRANSPORT: Saudi Arabia’s transport sector offers prospects

   

  https://image.digitalinsightresearch.in/uploads/NewsArticle/11780001/main.jpg

  Jennifer Aguinaldo
• 
  Neom receives bids for schools PPP

  15 May 2024

  

   

  Saudi Arabian gigaprojects developer Neom has received bids for a contract to develop and operate two schools in the SR1.5tn ($500bn) development.

  According to a source close to the project, around a dozen local companies submitted proposals for the scheme in late April or early May.

  The project is being procured on a build, own, operate and transfer (BOOT) basis.

  It is understood Riyadh-based Banque Saudi Fransi Capital is the client's financial adviser for the project.

  Related read: PPP offers budget and efficiency routes

  Neom recently invited companies to bid for a contract to develop four hotels at Oxagon, the development's industrial cluster.

  Neom expects to receive bids for the contract in July. The hotels, understood to have a total of 1,200 keys, will also be developed using a BOOT model.

  Most of Saudi Arabia's gigaprojects have been shifting the physical and social infrastructure components of their developments, in addition to their utility infrastructures, to public-private partnership (PPP) models due to budgetary constraints and a need for a more efficient approach to procuring and operating these assets long term.

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  MEED's April 2024 special report on Saudi Arabia includes:

  > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
  > BANKING: Saudi lenders gear up for corporate growth
  > UPSTREAM: Aramco spending drawdown to jolt oil projects
  > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
  > POWER: Riyadh to sustain power spending
  > WATER: Growth inevitable for the Saudi water sector
  > CONSTRUCTION: Saudi gigaprojects propel construction sector
  > TRANSPORT: Saudi Arabia’s transport sector offers prospects

   

  https://image.digitalinsightresearch.in/uploads/NewsArticle/11773702/main.jpg

  Jennifer Aguinaldo
• 
  Ewec plans new independent water project

  15 May 2024

  

   

  Abu Dhabi-based offtaker Emirates Water & Electricity Company (Ewec) is considering procuring a new independent water project (IWP), according to industry sources.

  The planned seawater reverse osmosis (SWRO) facility is expected to have a capacity of 90 million imperial gallons a day (MIGD), equivalent to about 409,000 cubic metres a day (cm/d).

  Sources have told MEED that the proposed location is either in Al Nouf or Taweelah in Abu Dhabi.

  A facility in Al Nouf will require a long pipeline that will connect the plant to Abu Dhabi, and will likely involve the participation of the Abu Dhabi Transmission & Despatch Company (Transco), according to one of the sources.

  It is understood that Ewec could seek interest from developers for the new IWP by the end of the year. 

  This development follows the revision of the scope and capacity of Abu Dhabi's fourth IWP scheme, which is currently in the tendering stage.

  The Saadiyat Island IWP will have a capacity of 60 MIGD.

  When it was tendered in July 2023, the original scheme – called the Abu Dhabi Islands IWP – comprised two SWRO plants each with a capacity of 50 MIGD, to be located on the Saadiyat and Hudayriat islands in Abu Dhabi.

  The current tender closing date for the Saadiyat Island IWP project is 29 June.

  "They need this additional planned capacity [in Al Nouf or Taweelah] since the other scheme in Hudayriat has been cancelled," the source added.

  Ewec previously said these projects are important to Abu Dhabi’s water security due to their proximity to the load centre of the Abu Dhabi islands, as well as the scheduled decommissioning in 2028 of the integrated power and water desalination plant at Sas Nakhl.

  As in previously tendered IWPs, the successful developer or consortium will own up to 40% of a special-purpose vehicle that will implement these projects, while the remaining equity will be primarily held indirectly by the Abu Dhabi government.

  Awarded contracts 2023

  Ewec awarded the contracts for two IWPs last year. Ewec, Abu Dhabi National Energy Company (Taqa) and France’s Engie signed the water purchase agreement for the Mirfa 2 IWP project in February 2023. They reached financial close for the project, which will have a capacity of 120 MIGD, two months later.

  Taqa, Ewec and South Korea’s GS Inima reached financial close on the $444m Shuweihat 4 SWRO IWP in December. Located within the Shuweihat power and water complex, the facility will supply up to 70 MIGD of potable water. Commercial operations are expected to commence in the second quarter of 2026.

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  MEED's April 2024 special report on the UAE includes:

  > COMMENT: UAE rides high on non-oil boom
  > GVT & ECONOMY: Non-oil activity underpins UAE economy
  > BANKING: UAE banks seize the moment
  > UPSTREAM: Adnoc oil and gas project spending sees steep uptick
  > DOWNSTREAM: UAE builds its downstream and chemical sectors
  > POWER: UAE marks successful power project deliveries
  > WATER: Dubai tunnels project dominates UAE pipeline
  > DUBAI CONSTRUCTION: Dubai real estate boosts construction sector
  > ABU DHABI CONSTRUCTION: Abu Dhabi makes major construction investments

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  Jennifer Aguinaldo
• 
  Saudi Arabia expands PPP pipeline

  14 May 2024

  

   

  Register for MEED’s guest programme 

  Saudi Arabia’s National Centre for Privatisation & PPP (NCP) has seen significant progress in its public-private partnership (PPP) programme in the past year, according to Salman Badr, vice-president of the state PPP procuring authority.

  Speaking at the MEED Mena Construction Summit in Riyadh, Badr said that NCP has a “healthy pipeline” of over 200 approved projects in different stages of development. 

  He noted that another 300 projects are currently under review.

  It is understood that the pipeline includes more than 180 schools, following the award of contracts to develop and operate 60 schools each in Jeddah and Medina in 2020 and 2022.

  “New sectors like healthcare and education have been opened up for public-private partnerships beyond the traditional water and power sectors,” said Badr.

  The kingdom is understood to have awarded more than 60 PPP contracts since 2017, when NCP was formed.

  Badr said private sector participation has “allowed the government to deliver infrastructure projects much more efficiently”. 

  Recently completed projects include the kingdom’s first hospital PPP project in Medina. 

  In addition to healthcare and school facilities, NCP’s pipeline includes airports, seaports and roads, catering to Saudi Arabia’s growing infrastructure needs as the population and economy expand.

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  MEED’s April 2024 special report on Saudi Arabia includes:

  > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
  > BANKING: Saudi lenders gear up for corporate growth
  > UPSTREAM: Aramco spending drawdown to jolt oil projects
  > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
  > POWER: Riyadh to sustain power spending
  > WATER: Growth inevitable for the Saudi water sector
  > CONSTRUCTION: Saudi gigaprojects propel construction sector
  > TRANSPORT: Saudi Arabia’s transport sector offers prospects

   

  https://image.digitalinsightresearch.in/uploads/NewsArticle/11768175/main.jpg

  Sarah Rizvi
• 
  Rua Al Madinah seeks construction partners

  14 May 2024

  Register for MEED’s guest programme 

  Saudi Arabia’s Rua Al Madinah, the Public Investment Fund (PIF) subsidiary tasked with Medina’s tourism and cultural development, has revealed that construction work is under way on the main tunnel that will take all incoming traffic towards the Harem area. 

  Extensive works are also ongoing to redevelop the airport road and modernise the city’s wider transportation network. 

  “There are significant opportunities for contractors and partners,” said Abdulsalem Alharbi, projects delivery director, Rua Al Madinah, at the MEED Giga Projects event in Riyadh on 13 May. 

  “We are looking for capable service providers and strategic partners to support the large-scale infrastructure and construction works.”

  Alharbi said five packages of residential towers – comprising over 120 towers in total – are currently in various stages of design and tender. 

  The superblock 5 package includes 18 towers and is already on the market, while superblock 4, involving 19 towers, is in the design phase.

  Packages District 9 and District 10, consisting of 35 towers and 46 towers, respectively, are seeking partners to take on development roles. 

  Alharbi also highlighted several investment opportunities being developed to support the growing tourism sector, including a central kitchen, cold storage warehouse, commercial laundry and staff accommodation facilities.

  “This represents a major chance for local and international companies to participate in the redevelopment of Medina,” he added.

  Project background

  Crown Prince Mohammed Bin Salman Bin Abdulaziz Al Saud inaugurated the infrastructure works and unveiled the masterplan for the Rua Al Madinah development in August 2022.

  Before this, US-based Hill International was awarded a contract in 2021 for the project management of road works at the Madinah Central Area (MCA).

  In June 2022, a local media report cited China Railway 18th Bureau as having won a contract to build the Medina tunnel. 

  The tunnel, valued at $970m, was expected to be completed within 42 months. The work includes building the AH tunnel, the Ali Bin Abi Talib tunnel, the airport tunnel and related projects, including a pedestrian bridge.

  Rua Al Madinah Holding Company CEO Ahmed Al Juhani told MEED in February that construction work on the Ali Bin Abi Talib road has been completed, making it the first tunnel to be finished as part of the Rua Al Madinah project. 

  In February 2023, US-based Parsons won a $15m contract to provide construction project management consultancy and contract administration services (PMCM) for the project. The US consultancy firm will manage the main infrastructure works, including the tunnel, road and utility works.

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  MEED’s April 2024 special report on Saudi Arabia includes:

  > GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
  > BANKING: Saudi lenders gear up for corporate growth
  > UPSTREAM: Aramco spending drawdown to jolt oil projects
  > DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
  > POWER: Riyadh to sustain power spending
  > WATER: Growth inevitable for the Saudi water sector
  > CONSTRUCTION: Saudi gigaprojects propel construction sector
  > TRANSPORT: Saudi Arabia’s transport sector offers prospects

   

  https://image.digitalinsightresearch.in/uploads/NewsArticle/11766934/main.jpg

  Sarah Rizvi