OPWP begins final negotiations for selection of successful bidder By Conrad Prabhu MUSCAT, Oman Power and Water Procurement Company has commenced negotiations with the first of three groups shortlisted as preferred bidders for a licence to build the Sultanate’s biggest green field power plant at Sur in the Sharqiya region.
Consortiums led by Marubeni, Mitsui and Siemens figure on the Tender Board’s shortlist of ‘Preferred Bidders’ in the latest stage of an international competitive process leading to the award of a license to develop 1,500 MW Independent Power Project at Sur.
The selected three were among a total of five groups that had submitted final financial and technical offers in support of their bids for the keenly contested license. Following the evaluation of the bids, groups led by Enka and Sembcorp Utilities were recently eliminated from the contest, leaving only the consortiums led by Marubeni, Mitsui and Siemens in the fray.
Last week, the state owned OPWP, which has the sole mandate under the Sector Law to oversee the procurement of all new electricity and associated desalinated water capacity, invited the Marubeni led consortium for final negotiations aimed at narrowing down the shortlist to a single successful bidder.
Marubeni, one of the largest trading companies in Japan, is supported in its bid by the following entities: Qatar Electricity and Water Company which owns roughly 60% of power generation capacity in the State of Qatar; Chubu Electric and Multitech.
Next in line for negotiations with OPWP is the consortium led by Mitsui & Company. The Japanese conglomerate has joined hands with Oman Oil Company and TAQA. Talks with the Mitsui consortium are slated for later this week. The successful bidder will obtain a license to build a giant IPP sized at a minimum of 1,500 MW of power generation capacity. Bidders however have the option to provide offers on plant configurations rising to a maximum of 2,000 MW of installed generation capacity. The entire output will be committed to OPWP under 15 year long offtake arrangement. Project costs are estimated to range between USD 1.5 billion to USD 1.6 billion.
OPWP’s efforts are now focused on nailing down a preferred bidder as quickly as possible in order for actual construction of the IPP to commence in earnest. The project is key to OPWP’s goal of plugging a projected shortfall in electricity generation capacity within the Main Interconnected Systemanticipated in 2013 and beyond. Project implementation schedules drawn up by OPWP stipulate Q1 2013 deadline for part of the IPP’s output, equivalent to roughly 400 MW of generation capacity, to be brought into operation ahead of summer peak demand that year. The IPP’s full capacity of 1,500 MW to 2,000MW is slated for full commissioning ahead of peak summer demand in 2014.
Although slated for fast track implementation, the competitive process for the IPP however lately suffered some delays in the wake of the recent cabinet reshuffle and the reorganization of the Tender Board. As a result, a mid-April target envisioned by OPWP for the selection of a preferred bidder did not materialize.
It is believed that OPWP is now targeting a July timeframe for the signing of the key Power Purchase Agreement. This would necessitate the expeditious completion of negotiations aimed at selecting a preferred bidder an exercise likely to be concluded within the next 2 to 3 weeks. Finalization of project documentation is expected to take about a fortnight, allowing enough time for a PPA to be readied for signature before the end of next month.
(Sourced from main.omanobserver.om)
