MIDDLE EAST TRENDS
- From: Vol 9, Issue 6 (June 2008)
- Category: Need to know
- Region: Unspecified
- Country: Bahrain
- Related Companies: Fichtner, HSBC, Hyflux, Nakheel, Palm Water and United Utilities
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* Bahrain’s move towards the liberalisation of its water sector has continued with the appointment of HSBC, Fichtner and Norton Rose to advise on the country’s wastewater privatisation strategy.
A fast-track 140,000m3/d wastewater treatment plant is at the top of the agenda (see story p14).
* More surprisingly, Syria seems to be taking an interest in private sector participation models. It is looking for four wastewater treatment plants on a design-build-operate basis, with finance coming from the European Investment Bank. It is not the only multilateral finance institution getting involved in the region. Over in Morocco, the International Finance Corporation is involved in a risk-sharing agreement with four local banks to enable the city of El Jadida to issue longer term debt for sewerage upgrades (see story p16).
* The action in the Gulf region seems to be moving away from the established water utilities, and towards the new generation of private real estate developers. The proliferation of mega-projects in the Gulf, including Kuwait’s USD77 billion City of Silk, Abu Dhabi’s USD40 billion Yas Island, Saudi Arabia’s USD26 billion King Abdullah Economic City, Oman’s USD15 billion Blue City, and Bahrain’s USD2.5 billion Bahrain Bay, will all need water and wastewater utilities. There has been something of a scramble to make partnerships with the developers: Suez has paired up with Al Qudra of Abu Dhabi and Qatari Diar, while United Utilities has joined forces with Emaar.
* One of the biggest regional developers is Dubai’s Nakheel, which, having originally paired up with Hyflux to form Palm Water, is now increasingly close to Macquarie Bank and its local partner Abu Dhabi Commerical Bank. Palm Utilities was sidelined on the Jumeirah Golf Estates project last year, and again on Nakheel’s International City development, which has just been tendered (see story p13). Nakheel, it seems, prefers to work with Macquarie as co-developer on water and wastewater projects, bidding projects out on a design-build-operate basis. It is a disappointment for those plant suppliers and operators who hoped to improve their margins by moving into financing projects as developers.
* A shake-up in Turkey’s water sector looks inevitable after 10,000 people were hospitalised with diarrhoea in Aksaray, Konya, Siirt and Ankara as a result of insufficient chlorination. If that were not bad enough, the mayor of Ankara then announced that he been diverting water from the Kızılırmak River into the city’s water supply for 18 days without telling anyone. The river apparently has dangerously high levels of sulphates and arsenic in it. Nevertheless, with the city’s dam at 2.2% of capacity, there are not many options left (see story p17).
* The situation in Jeddah seems even worse. The local press reports that residents are having to queue for up to 11 hours at the Aziziah water centre for water tanker service. Priority is given to Saudi citizens, who have a separate queue. Foreign nationals have to wait in line with their Saudi sponsor present in order to get water. Not surprisingly, a tanker load which sells at USD30 inside the distribution centre trades at USD160 outside. The announcement that the first Shoaiba barge-mounted desalination plant with an initial capacity of 10,000m3/d started pumping water to the city on 10 June will come as a relief to many.
* Heavy rain in Barcelona has saved the Catalan capital from further misery. With reservoirs now more than half full, the government has abandoned its plan to transfer water from the Ebro, but it is still tied in to contracts to ship in water (see p22).