Dubai extends $22bn tunnels EPC package deadline

27 February 2024

Dubai Municipality has extended the deadline for engineering, procurement and construction (EPC) companies to submit their statements of qualifications (SOQs) for the $22bn Dubai Strategic Sewerage Tunnels (DSST) public-private partnership (PPP) project.

Interested companies have until 28 March to submit their SOQs, according to a source close to the project. The new date is one month later than the initial planned submission deadline of 26 February.

This could imply that the announcement of prequalified EPC bidders, initially set for 11 March, will now be pushed to early April.

The client intends to start the prequalification process for the PPP consortiums that can bid for the project in the second quarter of this year.

In addition to its size, the project is gaining significant interest due to its unique procurement approach, whereby EPC contractors’ prequalification precedes developers’ prequalification.

“There is huge interest among EPC contractors,” notes an international contractor with regional headquarters in Dubai.

The bidders for each of the PPP requests for proposals (RFPs) will be prequalified consortiums comprised of sponsors, EPC contractors and operation and management (O&M) contractors.

MEED previously reported that the overall project will require a capital expenditure of roughly AED30bn ($8bn), while the whole life cost over the full concession terms of the entire project is estimated to reach AED80bn.

The project aims to convert Dubai’s existing sewerage system from a pumped system to a gravity system by decommissioning the existing pump stations and providing “a sustainable, innovative, reliable service for future generations”.

Two major sewerage catchments currently serve Dubai. The first, located in Deira, is called Warsan, where the existing Warsan sewage treatment plant (STP) treats the flow.

The second catchment, called Jebel Ali, is in Bur Dubai, where the wastewater is treated at the Jebel Ali STP.

DSST-DLT packages

Under the current plan, the $22bn DSST project is broken down into six packages, which will be tendered separately as PPP packages with concession periods lasting between 25 and 35 years.

The first package, J1, comprises Jebel Ali tunnels (North) and terminal pump stations (TPS). The tunnels will extend approximately 42 kilometres, with the links extending 10km. 

The second package, J2, covers the southern section of the Jebel Ali tunnels, which will extend 16km, with a link stretching 46km.

W for Warsan, the third package, comprises 16km of tunnels, TPS and 46km of links.

J3, the fourth package, comprises 129km of links, which will be operated by Dubai Municipality once completed, unlike the first three packages, which are envisaged to be operated and maintained by the winning PPP contractors.  

J1, J2 and W will be procured under a design-build-finance-operate-maintain model with a concession period between 25 and 35 years.

J3 will be procured under a design-build-finance model with a concession period of 25-35 years.

J1, J2, W and J3 will comprise the deep sewerage tunnels, links and TPS (DLT) components of the overall project.

MEED understands the remaining two packages of the project, the expansion and upgrade of the Jebel Ali and Warsan STPs, will be procured in a process separate from the four DSST-DLT components of the project.

The RFPs for the four DSST-DLT packages will likely be issued in sequential order on a staggered basis around six to 12 months apart.

Dubai Municipality appointed advisers for the overall scheme last year. It selected Abu Dhabi-headquartered Tribe Infrastructure Group as lead and financial adviser, UK-based Ashurst as legal adviser and the US’ Parsons as technical adviser.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11548368/main0934.jpg
Jennifer Aguinaldo
Related Articles
  • Egypt resumes power cuts

    18 April 2024

    Power cuts resumed across Egypt on 15 April, with scheduled power outages lasting a maximum of one hour per grid zone between 11am and 5pm daily.

    The scheduled power outages began last year and were suspended during Ramadan.

    The electricity ministry has confirmed that, since no new amendments to the load reduction plan have been issued, the power cut plan will continue indefinitely, adding that the outages are expected to last "until at least the end of summer, due to increased grid demand during the hotter months".

    The government-initiated load-shedding programme initially aimed to rein in rising electricity consumption and reduce pressure on the country's gas network.

    According to the country’s Electricity & Renewable Energy Ministry, national electricity consumption reached 43,650MW in mid-July last year, up significantly from previous highs of about 31,000MW.

    While the record-high consumption level is still below the official generation installed capacity of close to 60,000MW, consumption levels of 34,000MW–36,000MW will require about 129-146 million cubic metres of gas and diesel a day.

    Barring load-shedding, any increase in consumption beyond 36,000MW will require a commensurate increase in gas and diesel, which is understood to be beyond the government’s capacity to procure.

    Crucially, the other side of the electricity rationing initiative has to do with the need to save gas for exports, to boost the government’s dollar reserves in the face of the ongoing currency crisis.


    MEED’s latest special report on Egypt includes:

    Cairo secures a cumulative $54bn in financing
    Egypt faces political and economic trials

    Cairo beset by regional geopolitical storm
    More pain for more gain for Egypt
    Egypt oil and gas project activity declines
    Familiar realities threaten Egypt’s energy hub ambitions
    Egypt’s desalination projects inch forward
    > Infrastructure carries Egypt construction

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11694938/main5714.jpg
    Jennifer Aguinaldo
  • Ewec wants carbon-capture readiness for next gas power plant

    17 April 2024

    The request for proposals (RFPs) that will be issued for the next combined-cycle gas turbine (CCGT) plant in Abu Dhabi will explicitly require the developers or developer consortiums to accommodate the installation of carbon-capture facilities once they are commercially viable.

    "A key part of the RFP is to make a declaration that this project will be carbon-capture ready … that such facility will be installed as part of the project once carbon-capture solutions become commercially viable," Andy Biffen, executive director of asset development at Emirates Water & Electricity Company (Ewec), told the ongoing World Future Energy Summit in Abu Dhabi.

    As MEED previously reported, Ewec is considering issuing a tender in the next few weeks for its first gas-fired independent power producer (IPP) project since 2020.

    The greenfield Taweelah C gas-fired IPP is planned to reach commercial operation by 2027, according to a recent Ewec capacity procurement statement.

    "We understand that they might skip the expressions of interest and request for qualifications stage and directly invite qualified developers to bid for the contract," two sources familiar with the project previously told MEED.

    The planned Taweelah C gas-fired IPP is expected to have a power generation capacity of 2,457MW.

    Ewec awarded its last CCGT IPP nearly four years ago. Japan's Marubeni Corporation won the contract to develop the Fujairah F3 IPP in 2020.

    The state utility is considering new gas-fired capacity in light of expiring capacity from several independent water and power producer (IWPP) facilities.

    The plants that will reach the end of their existing contracts during the 2023-29 planning period include:

    •  Shuweihat S1 (1,615MW, 101 million imperial gallons a day (MIGD)): expires in June 2025
    •  Sas Al Nakhl (1,670MW, 95MIGD): expires in July 2027
    •  Taweelah B (2,220MW, 160MIGD): expires in October 2028
    •  Taweelah A1 (1,671MW, 85MIGD): expires in July 2029

    Ewec and the developers and operators of these plants are expected to enter into discussions before the expiry of the contracts to decide whether a contract extension is possible. Unsuccessful negotiations will lead to the dismantling of the assets at the end of the contract period.

    In 2022, MEED reported that Abu Dhabi had wound down the operation of Taweelah A2, the region's first IWPP. The power and water purchase agreement supporting the project expired in September 2021 and was not extended.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11690735/main2323.gif
    Jennifer Aguinaldo
  • Flooding spotlights Dubai construction quality

    17 April 2024

    Commentary
    Colin Foreman
    Editor

    Register for MEED's guest programme 

    The storm that engulfed Dubai on 16 April and the resulting flood damage will raise questions about the quality of construction in the emirate.

    Videos of extensive flood damage to property and infrastructure have been widely shared across social media, and those personally affected have questioned why the damage was so severe.

    There is not one single answer. The storm was said to be the most severe to have hit Dubai for decades, and some have described it as a 100-year storm. One other theory widely circulated during the day about it being caused by cloud seeding has been officially dismissed by the government.

    With such extreme weather, most will accept that some damage is inevitable. The question will be whether elements of the damage could have been prevented, which is where questions over construction quality will emerge.

    The two main concerns will be why buildings are not better waterproofed and infrastructure is not more effectively drained.

    Each flooding incident will have its own specific issues, but the reasons will come from three key areas: design, construction and maintenance. 

    Many projects will not have been designed to cope with such a deluge. Others will have been poorly constructed, allowing water to ingress into properties, and others will have drainage that was poorly maintained and failed when it was most needed.

    Dubai is heavily incentivised to address these concerns. In the past, Dubai has been a transient city with many expatriates living and working in the emirate for only a few years. There has been little collective memory of major weather incidents.

    As the emirate establishes itself as a permanent home for more people, including many property owners, that memory will now remain. Those memories may be painful today, but they will help guard against such severe damage in the future.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11690636/main.gif
    Colin Foreman
  • Abu Dhabi tenders 1.5GW Khazna solar contract

    17 April 2024

     

    Register for MEED's guest programme 

    State utility Emirates Water & Electricity Company (Ewec) has issued the request for proposals (RFP) for a contract to develop and operate the UAE capital's fourth utility-scale solar photovoltaic (PV) project.

    The planned Khazna solar independent power project (IPP), also known as PV4, will have a capacity of 1,500MW.

    It will be located in Khazna, between Abu Dhabi and Al Ain, and is expected to reach commercial operation by 2027.

    Ewec expects to receive bids for the contract "in the third quarter of 2024".  

    The state utility prequalified nine companies and consortiums as managing members and another 10 that can bid as consortium members.

    Parties or companies that are prequalified as managing members are free to bid either individually or as part of a consortium. These include:

    • Acwa Power (Saudi Arabia)
    • EDF Renewables (France)
    • International Power (Engie, France)
    • Jera Company (Japan)
    • Jinko Power (China)
    • Korea Electric Power Corporation (Kowepo, South Korea)
    • Marubeni Corporation (Japan)
    • Sumitomo Corporation (Japan)
    • TotalEnergies Renewables (France)

    The following companies can bid as part of a consortium with a managing member: 

    • Al Jomaih Energy & Water (Jena, Saudi Arabia)
    • Avaada Energy (India)
    • Buhur for Investment Company (Saudi Arabia)
    • China Machinery Engineering Corporation (China)
    • China Power Engineering Consulting Group International Engineering Corporation (CPECC, China)
    • Kalyon Enerji Yatrimlari (Turkey)
    • Korea Western Power Company (Kowepo, South Korea)
    • Orascom Construction (Egypt)
    • PowerChina International Group
    • SPIC Huanghe Hydropower Development (Spic, China)

    Ewec's PV1, or Noor Abu Dhabi, has a capacity of 935MW and has been operational since 2019.

    PV2, the 1,584MW Al Dhafra solar IPP, was inaugurated in November 2023. 

    Ewec is understood to have recently awarded the contract to develop PV3, the 1,500MW Al Ajban solar IPP, to a team led by French utility developer EDF Renewables and including South Korea's Korea Western Power Company (Kowepo).

    Ewec said solar energy is integral to achieving its target of producing nearly 50% of its electricity from renewable and clean energy sources by 2030.

    This is due to its "low generation cost and its contribution to reducing carbon dioxide (CO2) emissions from the electricity generation process".

    Like the first three schemes, Khazna solar PV will involve the development, financing, construction, operation, maintenance and ownership of the plant and associated infrastructure.

    The successful developer or developer consortium will own up to 40% of the entity, while the Abu Dhabi government will retain the remaining equity.

    The developer will enter into a long-term power purchase agreement with Ewec.

    Once fully operational, Khazna solar PV, along with Noor Abu Dhabi, Al Dhafra solar PV and Al Ajban solar PV, will raise Ewec's total installed solar PV capacity to 5.5GW and collectively reduce CO2 emissions by more than 8.2 million metric tonnes a year by 2027. 

    UAE-wide target and capacity

    The UAE published its updated national energy strategy in July last year. It includes a plan to triple the nationwide renewable energy capacity to 19GW by 2030.

    The total installed renewable energy capacity of both Ewec and Dubai Electricity & Water Authority (Dewa) stood at about 5.5GW at the start of 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11687552/main.jpg
    Jennifer Aguinaldo
  • Ewec sets gas-free generation timeline

    17 April 2024

    Register for MEED's guest programme 

    Emirates Water & Electricity Company (Ewec) aims to build enough clean energy-based generation capacity and transmission infrastructure by 2029 to enable the provision of services without burning natural gas, subject to specific parameters.

    "We define 'zero-hour' as the first hour when we can deliberately operate the power system without burning gas to provide energy and ancillary services while maintaining system reliability within defined parameters," Bruce Smith, executive director, strategy and planning at Ewec, told the ongoing World Future Energy Summit (WFES) in Abu Dhabi.

    Ewec's zero-hour is likely to occur during daytime in the winter months, when demand is at its lowest – or about half its peak capacity – and the renewable energy plants are at their peak production. It will require sufficient clean energy capacity – mainly from nuclear, solar, wind and battery storage – as well as completely decoupled water and power production.

    The 2029 zero-hour target is expected to be reached a year ahead of the utility's target for renewable and clean energy sources to account for producing nearly 50% of its electricity.

    To be operable, Ewec's power system will have achieved the required gas system flexibility, gas plant flexibility, suitable human capability and digitally advanced control systems by 2029.

    Having flexible gas systems and plants is crucial for the zero-hour plan, as it will enable gas turbines to be turned on to meet up to 80% of the requirements at night, when the solar photovoltaic (PV) plants shift to battery energy storage.

    "To get there, we need to build gas storage," Smith explained, noting such infrastructure is key to achieving gas supply flexibility. "Gas storage is an essential component of the increasing requirement for gas flexibility."

    Electricity production mix

    Ewec's exisitng generation fleet includes three nuclear reactors with a total combined capacity of 4,200MW, three solar PV plants with a capacity of 2,529MW, a 100MW concentrated solar power plant and nine thermal power plants with a combined capacity of more than 15,100MW.

    Sources: Ewec, MEED

    The state utility recently awarded the contract to develop its third solar PV independent power project (IPP) in Ajban, which has a capacity of 1,500MW. On 16 April, it also issued the request for proposals for a contract to develop the similarly-sized Khazna solar IPP project.

    Ewec has invited companies to express an interest in developing its first two 200MW battery energy storage system facilities and will soon start the procurement process for the Taweelah C thermal power plant, which is expected to have a capacity of more than 2,457MW.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11689931/main.jpg
    Jennifer Aguinaldo