Riyadh splits water pipeline procurement
14 March 2024
The responsibility for procuring several water transmission pipeline projects in Saudi Arabia has been transferred from the state water offtaker, Saudi Water Partnership Company (SWPC), to the Water Transmission & Technologies Company (WTTCO).
Formed in 2019, WTTCO is responsible for "managing, operating and maintaining water transmission, storage and dispatch systems across the kingdom".
According to an industry source, the procurement model for the following water transmission pipeline projects has also shifted from build-operate-transfer (BOT) to engineering, procurement and construction (EPC):
- Jizan-Al Shuqaiq
- Tabuk-Ula
- Rabigh-Jeddah
- Ras Al Kahir-Hafar
Issued last year, SWPC's latest Seven-Year Planning Statement, covering the years 2022-28, specified 10 independent water transmission pipeline (IWTP) projects, including the abovementioned schemes. The projects have a total capacity to transmit 4.9 million cubic metres of water a day over 3,205 kilometres (km).
The transfer of these projects to WTTCO is understood to have taken place following the publication of that statement.
According to regional projects tracking service MEED Projects, WTTCO issued the main contract tender for the Jizan-Shuqaig water transmission pipeline project in October last year.
IWTP schemes
In September 2023, SWPC awarded a consortium including the local Alkhorayef Water & Power Technologies Company, Spain’s Cobra Group and Egypt’s Orascom Construction a contract worth SR7.78bn ($2bn) to develop and operate the first IWTP project in Saudi Arabia.
The Rayis-Rabigh IWTP project will have a length of 150km and will transmit 500,000 cubic metres a day of drinking water between the two municipalities.
The bidding process is under way for the kingdom's second IWTP scheme, which links Jubail and Buraydah.
According to industry sources, the consortiums being formed as the 28 March bid deadline nears include:
- Ajlan & Bros / Alkhorayef Water & Power Technologies (local)
- Lamar Holding (local) / Sinohydro (China)
- Vision Invest (Local) / Taqa (UAE)
MEED understands discussions are ongoing among other prequalified bidders to either join the consortiums or form separate ones.
The planned Jubail-Buraydah IWTP is a 603km pipeline that can transmit 650,000 cubic metres of water a day.
The transaction advisory team for the client comprises US/India’s Synergy Consulting as financial adviser and the local Amer Al Amr and Germany’s Fichtner Consulting as legal and technical advisers, respectively.
SWPC’s obligations under the water transfer agreement will be guaranteed by a credit support agreement entered into by the Finance Ministry on behalf of the Saudi government.
The project is part of the kingdom’s National Water Strategy 2030, which aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90% of national urban supply to reduce reliance on non-renewable ground sources.
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
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