Saudi Arabia suspends $3.5bn Ras al-Khair privatisation tender
Saudi Arabia’s Privatisation Supervisory Committee for the Environment, Water and Agriculture sectors has announced it has suspended the privatisation of the Ras al-Khair desalination and power plant, a deal which was expected to be worth up to $3.5bn
Saudi Arabia’s Privatisation Supervisory Committee for the Environment, Water and Agriculture sectors has announced it has suspended the privatisation of the Ras al-Khair desalination and power plant, a deal which was expected to be worth up to $3.5bn.
Energy & Utilities reported earlier in July that the Saline Water Conversion Corporation (SWCC), owner of the Ras al-Khair cogeneration plant, had postponed the bid submission planned for 1 August. The deadline had previously been extended from 1 June.
The kingdom’s privatisation supervisory committee published a statement on its website that the decision to suspend the tender had been made “… in order to capitalise on knowledge and capacity built in the kingdom as a result of many years of experience in the areas of water desalination, new technologies, R&D and supply chains. A new engagement strategy and plan for the Saline Water Conversion Corporation (SWCC) assets such as Ras al-Khair plant will be announced shortly.”
“During the interim, SWCC will continue to be responsible for the management, operation and maintenance of the Ras al-Khair desalination and power plant, ensuring the continuity and security of supply of water and power to clients.”
The privatisation of the Ras al-Khair plant has been in the planning stage for a number of years. SWCC appointed France’s BNP Paribas as the lead and financial adviser for the planned privatisation in October 2017. SWCC had also appointed Atkins as technical adviser, Ernst & Young, accounting adviser and Clifford Chance and the local Abuhimed Alsheikh Alhagbani law firm (AS&H) as legal advisers.
The prequalified groups that had been prequalified to participate in the bidding were:
- Acwa Power (local)
- China Power International Holding/ Ajlan & Bros Energy Company (local)
- Engie (France)
- Jera (Japan)
- Marubeni Corporation (Japan)
- NTPC (India)
- China Huadin Hong Kong (CHDHK)/ Beijing Enterprises Water Group (BEWG)
The privatisation process was being overseen by the Supervisory Committee for the privatisation of the water sector with support from the Ministry of Environment, Water and Agriculture (MEWA), National Centre for Privatisation (NCP) and Saudi Water Partnerships Company (SWPC).
The programme to privatise existing SWCC assets was first launched in 2008, however little progress was made until the launch of the kingdom’s Vision 2030 in 2016, with the privatisation of state assets forming a central pillar of the ambitious reform programme
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