The Water and Electricity S.M.L.L.C. (“WEC”) announced that it has signed an agreement with a consortium led by the Power and Water Utility Company for Jubail and Yanbu (“Marafiq”), to construct and operate a Sewage Treatment Plant (“STP”) located in Jeddah Airport, in the western part of the Kingdom of Saudi Arabia (“Kingdom”). Other members of the Consortium are Al Amwal Al Khaleejiah Al Thania and Veolia Middle East. Construction of the STP is expected to start in Q2 2019 and will be built over two stages. Stage one will treat 300,000 m3 per day starting in late 2021 and stage two will add another 200,000 m3 per day when capacity at the new STP exceeds certain utilization rates.
The STP will be built, owned and operated entirely by the private sector, and WEC will compensate the Project Company for sewage treated over a 25-year concession period. WEC then has the option of taking over the operation and maintenance of the STP at no further cost to the Kingdom. Once commissioned, the STP will be the second plant in the Kingdom that results in only beneficial sludge being produced, while at the same time producing re-cycled water that will be sold to the National Water Company (“NWC”) for further use in agriculture and commercial applications. NWC will then sell the recycled water to end users in the nearby area. The Saudi Electricity Company (“SEC”) will provide power to the new STP.
His Excellency, the Minister of Environment, Water and Agriculture, and Chairman of the Board of WEC, Eng. Abdulrahman Al Fadli, expressed his thanks and appreciation to King Salman and Crown Prince Mohammed bin Salman for supporting the water sector in their privatization efforts to secure the provision of water and related services to the citizens of KSA, explained “we want to set a higher standard for Saudi Arabia whereby municipal waste is treated in an environmentally friendly manner, odorless, with minimal sludge leaving the site and re-cycling the water whenever possible. We are very pleased that the Consortium led by Marafiq is bringing us a cost-effective solution with one of the lowest sewage tariffs ever recorded.” His Excellency added “Water is a valuable resource in the Kingdom and if we can re-cycle its use, everyone benefits as it frees up potable water for other applications. This is the Kingdom’s second STP offered on a build, own, operate and transfer basis (“BOOT”) and we expect to see more of these type of projects as part of the Kingdom’s 2030 Vision.”
A total of 66 companies had expressed interest in the project and 9 consortiums were qualified to bid for the project, of which 6 submitted final bids. Some of the world’s most well-known companies in the business competed to construct and operate the STP. “We are pleased that the Consortium led by Marafiq bid one of the lowest tariffs every witnessed in the Kingdom for a state-of-the art plant,” stated Khaled al Quershi, Chief Executive Officer of WEC. He went on to say, “In addition to constructing and operating the plant for 25 years before turning it over to us, the Consortium must meet stringent local Saudi Content as part of the Kingdom’s 2030 Vision. Fifty percent of the total construction cost must be sourced from within Saudi Arabia. During operation and maintenance, 50% must be local during the first five years, increasing to 70% in years six and beyond. These are challenging targets to achieve, but we strongly believe they are achievable as we are dealing with top rated companies who are committed to make this project a success”.