Saudi Arabia mega-power, desal plant to open for bidding

Saudi Arabia is predicting costs of a massive power and water desalination plant to drop 20 to 25 percent below original estimates because material costs have decreased and the project description has changed, Reuters reported today.

The $6 billion Ras Azzour project on the Gulf Coast had been led by Tokyo, Japan-based Sumitomo (TYO:8053) and a consortium planning to build and operate the plant. In May, Sumitomo said the plant, now expected to produce 2,400 megawatts of electricity, had been put on on hold.

However, the state-run Saline Water Conversion, which is also backing the project, told Reuters it is now planning to invite bidders for the project in mid-November.

The power and water from the plant is expected to benefit mining company Saudi Arabian Mining (Ma'aden) and Saudi Electricity. Ma'aden anticipates merging its planned power plant with the new project.

In 2008, Saudi Arabia added to its desal capacity in the commercial capital Jeddah (see Saudi Arabia adds to desal strategy). Saudi Arabia is the world's largest producer of desalinated water, which makes up half the country's drinking supply.

In 2007, France's Veolia Water Solutions & Technologies was chosen to design and build one of the world’s largest desalination plants in Saudi Arabia (see Veolia awarded huge desalination contract in Saudi Arabia).

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