The utilities sector is turning to private and foreign investors to help spur the growth needed to meet local demand. The construction of 16 power and water projects worth $3.1bn is slated to increase water desalination capacity in the country, as well as improve wastewater treatment and conservation awareness.
According to the latest seven-year statement of the Oman Power and Water Procurement Company (OPWP), published in 2006, the total demand for desalinated water in the regions covered by the main interconnected system is increasing by approximately 12.5% per year, from around 86m cu meters per year in 2006 to a projected 197m cu meters in 2013. Peak daily demands are projected to reach 472,000 cu meters per day in the Muscat zone, 160,000 cu meters per day in the Sohar zone and 70,000 cu meters per day in the Sharqiya zone.
The government has recognized the need to increase local desalination capacity to meet domestic water needs, and plans for a number of new projects and expansions are already in the works.
For example, the race for a contract to build a $400m independent water desalination plant at Ghubrah, in the Muscat Governorate, has been narrowed down to five bidders. The first call for tenders for the project was put out in September 2011, with OPWP overseeing procurement on behalf of the Public Authority for Electricity and Water. The facility is expected to produce 191,000 cu meters of desalinated water per day.
The five companies left in the running, having passed through the prequalification stage, are the Japan-based Marubeni Corporation; Singapore-based integrated water and environmental solutions provider Hyflux; Acciona Agua, a Spanish firm specializing in potable water and wastewater utility; Malakoff International, a subsidiary of the Malakoff Corporation, the largest independent water and power producer in Malaysia; and Spanish water utility firm Grupo Cobra. All five firms have submitted plans for the construction and development of the Ghubrah facility, and the winning bid is expected to be announced in the fourth quarter of 2012.
In an additional boost to local water production, ACWA Power Barka, the first privately funded water project in the country, was given government approval in mid-July to increase its desalination capacity by 45,000 cu meters per day. Run by Saudi Arabia-based ACWA Power International, the facility was awarded permission to expand by the OPWP.
The expansion will be a separate facility from the existing plant, but will also be located in Barka, some 65 km north of Muscat. Construction is due to begin by the end of the third quarter of 2012, and ACWA intends to begin water production by the fourth quarter of 2013.
“In the medium to long term, this expansion project will prove to be a well-sought solution to balance shortfalls of current desalinated water production capacity,” said Mohammad Abunayyan, the chairman of ACWA Power International, when speaking with local media in July.
This additional capacity has been made particularly necessary due to the likelihood that some of the older desalination units of existing plants – including at Ghubrah –will be taken out of operation in the coming years. The contract for ACWA’s Barka I plant will end in April 2018 if the agreement with the OPWP is not extended.
An expansion in wastewater treatment will also provide an additional boost to the local supply. Haya Water, the government-run company that handles wastewater management for the Muscat Governorate, is aiming to help combat the annual 350m-cu-metre nationwide shortage by expanding its catchment and treatment facilities, which include areas that supply storage for rain and other water runoff.
The company, which provides water to residential, commercial and government facilities in Muscat, is aiming to achieve an 80% network connectivity rate by 2018 – up from the current 22% – and to produce 220,000 cu meters of treated effluent, also known as recycled water, per day. While much of the treated effluent now goes toward watering the city’s parks and green spaces, much of the additional water will go toward cultivating local agriculture.
“The current strategy for water treatment is to integrate the full cycle of water resources in a sustainable scheme, from production, treatment and distribution to reutilization,” Hussain Hassan Ali Abdulhussain, the CEO of Haya Water, told OBG. “As two-thirds of all Oman’s agricultural products are imported, even if the water sector can add value of 10% to helping agriculture development through water and fertilizers, this will be a substantial contribution to local farms and reduce our national dependence on importing fruits and vegetables.”
These new projects will all help to increase water treatment and desalination, and the expected tripling in the amount of treated wastewater will greatly increase the country’s ability to cultivate local agriculture, while additional desalination facilities will ensure that the supply of potable water continues to meet the needs of Omanis.
Oxford Business Group