Palm Water awarded US$400 million contract by Nakheel for STP at Jumeirah Golf Estates
Widening its presence in the water industry, Palm Water LLC, a company owned by Istithmar, has said it had been awarded an US$400 million contract by Nakheel to design, build, own and operate (DBOO) a sewage treatment plant as well as sewage and irrigation networks that will cater to a number of high-profile property development in Dubai.
The award comes close on the heels of an AED1 billion contract recently won by Palm Water for setting up a similar project for Nakheel at International City, Dubai.
The new sewage treatment plant (STP) will serve Dubai’s premier golf developments including Jumeirah Golf Estates -- being constructed by Istithmar Leisure, an arm of Istithmar that invests in strategic leisure projects.
Planned near Jumeirah Golf Estates, the new STP will have a capacity to treat about 220,000 m3 of sewage each day. As part of the award, Palm Water LLC will be granted a 30-year concession to provide both sewage and irrigation services on behalf of Nakheel.
The STP will serve property developments including Jumeirah Lake Towers, Dubai Multi Commodities Centre, Jumeirah Islands, Jumeirah Park and Jumeirah Village.
The plant will be built in phases, with the first phase expected to go on stream by April 2008. Until then, sewage from these developments will be treated at the nearby Gardens STP. The Jumeirah Golf Estates STP will reach full capacity by 2010.
Yousuf Kazim, Chairman of Palm Water, said: “When fully operational, this STP will be one of the world’s largest Membrane Bio Reactor (MBR) plants. Palm Water is evolving both the experience as well as the expertise in the execution of projects of this magnitude. This particular project is in line with further integrating our competencies in the water industry.”
The STP will produce sufficient treated effluent to supply all the irrigation needs of the nearby golf courses being designed and constructed by Istithmar Leisure.
Elaborating on the project, Robert (Bob) Bryniak, Chief Executive Officer of Palm Water, said: “The high profile developments to be serviced by the proposed STP are considered top priority by Nakheel. Palm Water believes that the STP and related networks are a critical element for the successful launch of these developments. Rather than having smaller and more costly plants within each development, Nakheel decided to have a centralized plant with sufficient capacity to serve all its developments located in close proximity of each other.”
He added: “In addition to freeing up valuable land in each of these developments for other uses, the larger STP will also benefit from economies of scale. The STP will not only produce a superior quality of treated effluent that can be used for irrigation purposes but also has a reduced footprint and modular design which lends itself to expansion as needed.”
The scope of the contract awarded to Palm Water covers designing, supplying, constructing, owning, operating and maintaining the STP, as well as owning, operating and maintaining the pumping stations and tanks. Networks and collection systems being developed by others at the various developments will be purchased by Palm Water when completed and maintained by the company during the 30-year concession period.
International companies are expected to be involved in the design and construction of the STP. A proposal is expected to be issued to pre-qualified bidders within the next four to six weeks. The contract for the design and construction is expected to be awarded early in 2007. KEO is providing Palm Water with technical support on the project while Allen & Overy are the legal counsel. Hyflux Ltd will be involved in the process design services. The ADCB Macquarie Corporate Finance Joint Venture, is providing financial advisory support.
Palm Water LLC is owned 95% by Istithmar PJSC, the investment arm of Dubai World, and Hyflux Ltd owns 5% of Palm Water LLC. It undertakes contracts to build, own and operate (BOO) projects; or build, own and transfer (BOT) of developments. It also participates in similar arrangements related to seawater desalination plants; commercial, municipal, industrial water treatment plants; wastewater treatment and recycling plants; potable water and treated wastewater distribution networks; wastewater collection network; and other related businesses that include the selling and distributing associated products related to the water business.
Palm Water is presently implementing two desalination plants located on the Palm Jumeirah and an STP at International City.