United Arab Emirates Water Report Q2 2012

BMI View: ADWEA, the Gulf’s most prominent developer of desalinated water projects, is set to announce the location of its next IWPP shortly. The anticipation of a new IWPP is confirmation of the success of Abu Dhabi’s private-led IWPP model, and is clearly part of a wider regional trend which has enabled the development of critical water infrastructure projects – with the private sector taking the lead. Indeed, it is clear that private investment in desalination, wastewater treatment systems, water supply networks and other key projects will continue to shape the UAE’s policy agenda.

Key themes to highlight for UAE’s water sector:

• The Abu Dhabi Water & Electricity Authority (ADWEA) is expected to announce plans for its next IWPP shortly. ADWEA is also due to decide on a design-build-operate (DBO) contract in H112 for a 35mn gallons a day (g/d) reverse osmosis (RO) desalination facility, known as Fujairah 2 – located next to the existing IWPP at Fujairah. SembCorp Water & Power Company invited bids for the new facility in July 2011 and has received six bids.
• In February 2012, the Abu Dhabi Sewerage Services Company (ADSSC) awarded the contract to manage Al-Ain’s wastewater treatment system to Spain’s Aqualia and the UAE’s Mace. The seven-year contract is worth US$100mn and will include maintenance of more than 2,000km of sewers, 19 wastewater treatment plants and a number of pumping stations. This is the first time a Spanish water management company has been awarded a contract in the UAE.
• The inauguration of the emirates’ first independent wastewater treatment plant in January 2012 marked the UAE’s debut in terms of the privatisation of wastewater facilities. The Al-Saad treatment plant at Al-Ain will operate at a maximum 92,000 cubic metres per day (m3/d) capacity and is the first of two planned independent sewage treatment plants (ISTPs). The project owner, Al-Etihad Biwater Wastewater Company, will also commission the 345,000 m3/d Al-Wathba sewage treatment plant as part of a 25-year build-own-operate (BOO) concession granted by ADSSC.
• Demand for water in Abu Dhabi is set to grow by a robust 8% per annum between 2011 and 2015, leaving little room for complacency in ramping up water output across all seven emirates. BMI is anticipating a 9% increase in total water production in FY2012 and this should ensure that the UAE remains ahead of the game. Average daily water production is set to rise from 441mn g/d in 2012 to 560mn g/d by 2016, raising total water supply above the 200,000mn gallon level by the end of the forecast period. Plans for new desalination capacity as part of ADWEA’s rolling IWPP programme are welcome additions, and the focus on wastewater treatment should also ensure the supply-demand balance is maintained over the next five years and beyond.