Saudi Arabia’s $2bn water pipeline expands private sector role
19 September 2023
Commentary
Jennifer Aguinaldo
Energy & technology editor
The $2bn Rayis-Rabigh independent water transmission pipeline (IWTP) project in Saudi Arabia further expands the role of private companies in developing and operating public infrastructure assets within the kingdom.
It could have been just another water pipeline project if not for its scale – it extends 150 kilometres and can transmit up to 500,000 cubic metres of water – and its structure as a 35-year public-private partnership project.
It also links major municipalities in Medina and Mecca, further increasing the project's strategic importance.
The project is reminiscent of the Rabigh 3 independent water project and the Dammam independent sewage treatment plants, which were procured between 2018 and 2019 by the state-backed offtaker Saudi Water Partnership Company (SWPC), formerly known as the Water & Electricity Company.
The levelised water transmission tariff of SR1.256 ($0.33) a cubic metre is without any precedent, since the project is the first of its kind.
The Rayis-Rabigh IWTP will utilise the build-operate-transfer model, rather than the build-own-operate project structure employed by the private sector water desalination and water treatment plant projects in the kingdom.
The project demonstrates the private sector's appetite to win new work that does not necessarily fall within its comfort zone, since all water transmission pipeline projects in the kingdom have previously been procured using the conventional engineering, procurement and construction model.
A total of 31 companies, including 14 that are locally domiciled, expressed interest in bidding for the Rayis-Rabigh IWTP contract in December 2021.
The contract was tendered in August 2022 and SWPC received bids in March this year from three teams, including one led by Nesma Company and another led by Vision International.
Alkhorayef Water & Power Technologies, which leads the winning consortium for the project, said it will now work with the relevant stakeholders to reach financial close on the project.
If successfully implemented, the project paves the way for seven IWTP projects that the kingdom is planning to procure in 2022-28.
The market will now focus on the award of the contract for the kingdom's first independent strategic water storage project, also in Mecca, as Saudi Arabia continues to push the limits for private sector participation in previously state-dominated assets.
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MEED exclusively revealed in May that the contractor had been selected for the engineering, procurement and construction (EPC) contract. The project is estimated to cost $162m.
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It is being delivered as part of Dubai’s Tasreef strategic plan, which supports the Dubai 2040 Urban Master Plan. Once completed, the new drainage infrastructure is expected to improve the emirate’s stormwater network, increase flood protection and enhance the resilience of Dubai’s infrastructure.
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Eight contractors have made offers for a contract to supply, install, test and commission glass-reinforced epoxy (GRE) water transmission pipelines and associated works for the Hassyan seawater reverse osmosis (SWRO) phase two network in Dubai.
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Abu Dhabi’s Modon Infrastructure has extended the deadline to 31 July for firms to submit expressions of interest and prequalification statements for the next phase of Abu Dhabi’s Mid Island Parkway Project (MIPP), which will be developed as a public-private partnership (PPP).
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Saudi Aramco Mobil Refinery Company (Samref) has announced the appointment of Abdullah Bin Saleh Al-Suwailem as the chairman of its board of directors.
Al-Suwailem serves as senior vice president of Western Region manufacturing at Saudi Aramco.
Prior to being appointed chairman, Al-Suwailem had been a member of the Samref board since .
Samref is the downstream joint venture of Aramco and US oil and gas producer ExxonMobil. The entity owns a crude refining facility located in Yanbu on Saudi Arabia’s west coast, which entered operations in November 1984.
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“We expect his deep expertise in governance and large-scale operations to be invaluable as Samref continues its journey of growth and operational excellence. We look forward to his leadership in steering the board's strategic direction,” Samref added.
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READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDFStress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.
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