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29 January 2007

Mott MacDonald provides technical advisory services for first water project of its kind in the Middle East

Mott MacDonald’s technical advisory role for the Government of the Sultanate of Oman on what is believed to be the Middle East’s first Independent Water Project developed as a BOO (Build Own Operate) has reached fruition. The project agreements relating to the delivery of the Sur Independent Water Project were formally signed at the Ministry of National Economy, Muscat, Oman on 17 January 2007.*

The agreement transfers the operation and ownership of the existing desalination plant at Sur to the private sector and also provides for the construction of a new 17.6 million gallons per day desalination plant which will be built alongside and eventually replace the existing facility.

The new desalination plant is due for completion in 2009 and will serve the Sharqiyah Region through a major regional water transmission scheme which is currently under construction. The scheme is one of the main components recommended in the Master Plan for the Water Sector completed by Mott MacDonald in 2004.

The new c. $167 million desalination plant, is due to be delivered by the winning consortium comprising French company Veolia and the National Power and Water Company of the Suhail Bahwan Group.

Mott MacDonald in its capacity as Technical Advisor has provided support to the Government from original project conception, through to project strategy, prequalification and tender periods up to the signing of the agreements.

Richard Hall, Mott MacDonald’s project manager said, “We were delighted to have been appointed by the Government to advise on this prestigious and regionally significant water development for Oman. Mott MacDonald has expertise gained from delivering major desalination projects around the Middle East and has a long established presence in the water sector of Oman.”

This signing ceremony underlines the aims of the Government not only to satisfy the population’s ever increasing demand for potable water, but also to provide the local and foreign private sector with an opportunity to participate in the establishment, ownership and operation of utility services. This is an example of measures taken to improve the quality and value of the local capita market as per the Privatisation Law issued through the Sultani Decree 77/2004. Conditions of the agreement ensure that no Omani worker at the existing plant will be made redundant and also obliges the new desalination company to float 35% of its shares in the local Muscat securities market within four years of its establishment.


Further notes

  • On behalf of the Government the Agreement was signed by H.E. Dr. Ahmed bin Abdulnabi Macki, the Minister of National Economy and the Deputy Chairman of Financial Affairs and Energy Resources Council and H.E. Dr. Khamis bin Mubarak al Alawi, the Minister for Housing, Electricity and Water, with Al Sharqiyah Desalination Company represented by its Founders. The new company will entirely finance the project.

  • This project has been accomplished through the coordination and cooperation between the various concerned departments of the Ministry of Housing, Electricity and Water, the Ministry of Finance, the Tender Board, the Ministry of Legal affairs, the Ministry of Regional Municipalities, Environments and Water Recourses, the Ministry of National Economy, the Mazoon Electricity Company, the Rural Areas Electricity Company, the Electricity Sector Regulatory Authority, and the advisory consortium to the transaction consisting, Bank Muscat as financial advisor, Denton Wilde Sapte acting as the legal advisor and Mott MacDonald acting as the technical advisor.

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