This article is part of a daily series of MegaProjects articles. If you want to know more about PPP projects with a considerable size visit our MegaProjects section. You can receive them by email on a daily basis.
Orascom and FCC have signed an engineering, procurement and construction (EPC) contract for Egypt's Abu Rawash wastewater, despite the fact that it was originally tendered as a PPP.
The 50:50 joint venture between Orascom Construction Limited and FCC Aqualia, a subsidiary of FCC, signed the contract for approximately US$320 million.
The project was put out to tender by the Egyptian Ministry of Town Planning. It is a DBO (design, build and operate) contract that includes a three-year operation and maintenance period.
Although the initial agreement with the Egyptian government included a concession for 20 years (including financing), the economic situation in Egypt made it advisable for the investment in the project to be assumed entirely by the Egyptian state, abandoning the original idea of a concession type contract.
The initial project investment was estimated at US$636.3 million.
The facility will have a capacity of 1.6 million cubic meters per day, comprised of primary and secondary treatment units, and is planned to be constructed over phases in 37 months. Once complete, the facility will serve 6 million people, making it one of the largest in the world.
The contract is part of the ambitious programme for water and sewerage actions by the Government of Egypt and has the backing of the African Development Bank.
As we reported, the consortium won the PPP project in Egypt in August 2015. The team beat out competition from Kuwait's Al Kharafi. Two other shortlisted teams did not bid for the project: a consortium composed of UAE-headquartered Metito Overseas Limited, subsidiary of Gulf Capital, PWT and HOCHTIEF; and Degremont.
Osama Bishai, CEO of Orascom Construction, commented:
“This award confirms our ability to continue to secure quality contracts and underscores our strategy to focus on water-related projects, such as our two recently-signed water desalination plants, due to the strategic need of this sector in Egypt. We are also pleased to collaborate again with our partner FCC Aqualia, demonstrating our long-term successful relationship.”
A 50:50 joint venture between Orascom Construction and Aqualia New Europe is currently the co-owner and co-developer of New Cairo Wastewater Treatment Plant, Egypt’s first public private partnership. The improvement of the sewerage and treatment services is one of the goals set by the United Nations in the Millennium Development Objectives (MDO) and the New Cairo plant was praised by the international organisation as "an example and engine for social development."