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Dubai reviews $22bn tunnel PQ applications

10 May 2024

Dubai Municipality is expected to provide feedback to engineering, procurement and construction (EPC) companies that submitted their prequalification applications for the contracts comprising the Dubai Strategic Sewerage Tunnels (DSST) project next week.

According to industry sources, interested EPC contractors submitted their statements of qualifications (SOQ) for the contracts on 30 April.

International, regional and local EPC contractors are understood to have sought to prequalify to bid for the contracts for the $22bn DSST scheme, which Dubai Municipality is implementing on a public-private partnership (PPP) basis.

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

Dubai Municipality is undertaking the prequalification process for EPC contractors ahead of prequalifying companies that can bid for the contracts to develop and operate various packages of the project.

According to industry sources, the floods resulting from the April 16 storm that hit Dubai and other emirates have also made implementing the project more urgent. 

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”.

Dubai currently has two major sewerage catchments. The first in Deira is Warsan, where the 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, and the links will extend 10km. 

The second package, J2, covers the southern section of the Jebel Ali tunnels, which will extend 16km and have 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. Once completed, Dubai Municipality will operate them, 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 of 25-35 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 project’s remaining two packages, the expansion and upgrade of the Jebel Ali and Warsan STPs, will be procured in a process separate from the four DSST-DLT components.

The RFPs for the four DSST-DLT packages will likely be issued sequentially, staggered around six to 12 months apart.

Dubai Municipality has appointed Abu Dhabi-headquartered Tribe Infrastructure Group as lead and financial adviser, UK-based Ashurst as legal adviser and US-based Parsons as technical adviser for the DSST project.

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Jennifer Aguinaldo

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