Marubeni Corp bids to take advange of Saudi privatization programme
Oil price collapse accelerates process of bringing foreign capital into infrastructure
20 May 2020 | Michael Marray

MARUBENI Corporation is among the list of qualified bidders for a batch of Independent Sewage Treatment Plants (ISTPs) in Saudi Arabia. The contract is being awarded by the Saudi Water Partnership Company (SWPC).

Saudi Arabia has an ambitious privatization programme, not only bringing private capital and expertise into infrastructure, but also increasing competition on project tenders and putting in place long-term concession revenue for the government.

On May 10, SWPC announced Qualified Bidders on the Madinah 3 ISTP, plus the bundled package of the smaller Buraydah 2 and Tabuk 2 ISTPs. The bidding groups were largely the same on both deals. 

Madinah 3 is a 200,000 m3/day expandable to 375,000 m3/day project, with operational start in 2023. The Qualified Bidders are: Acciona Agua and International Water Distribution Company (Tawzea); FCC Aqualia, Alkhorayef Water & Power Technologies and Alfanar Company; GS Inima Environment and Al Jomaih Energy and Water Company; Marubeni Corporation; Metito Utilities Limited; Veolia Middle East.

Tabuk 2 is a 90,000 m3/day project, with operational start in 2023. For the package comprising Buraydah 2 and Tabuk 2, the same consortia placed bids, with the exception of Veolia.

The Saudi privatization programme has become even more urgent as the price of oil has collapsed. Brent Crude had ranged between US$56 and US$74 a barrel during 2019, but the Covid-19 demand shock, coupled with the dispute with Russia over production levels, now has it hovering around US$30. This has dealt a shock to the government's financial planning, and the process of bringing in foreign capital into infrastructure is likely to be accelerated, within the framework of the Vision 2030 programme.

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