Ghubra IWPP well received

As many as 60 companies have submitted LoIs for developing the 2nd phase of the Ghubra project

By V L Srinivasan

Muscat, Feb 21: In a vindication of the sultanate’s policy reforms in the power sector, as many as 60 companies have evinced interest to develop the second phase of the Ghubra Independent Water and Power Project (IWPP).

Besides generating 500MW of power, the gas-based project, which is coming up in Muscat, will also produce 30mn Imperial Gallons per Day (MIGD) of desalinated water to meet the growing drinking water demand in the region.

The deadline for return of letters of interest (LoI) for the project was February 10 and the Oman Power and Water Procurement (OPWP) Company limited, which is overseeing the development of the project, has been ‘flooded’ with proposals from interested parties around the world.

In comparison to the Barka 2 Sohar 3 IWPP, the Ghubra IWPP has evoked tremendous response from potential developers, sources told Muscat Daily.

In view of this, OPWP officials have decided to extend the deadline for the second and crucial phase of the project - the issue of request for proposals (RFPs), which was to be issued by the Tender Board, from middle of this month to a later date to enable the officials study all the proposals.

According to sources, the OPWP will not issue a separate request for pre qualification on the project. Instead, it will include the qualification criteria in the request for proposals.

The preferred bidder to develop the project will be selected in July and the contract is expected to be awarded in October this year. The plant will begin producing power on April 1, 2012 and will being operating commercially a year later, sources said.

With stiff competition from so many parties, sources said that the government will have a better option to bargain for reducing the cost of the project which is being worked out, sources said.

Commenting on the good response to the Ghubra project, a market analyst said, “The improvement in the credit rating of Oman by Moody’s has, in turn, helped improve the rating of OPWP from the long term unsecured debt rating of A2 to A1 recently. This means the company has become more attractive and less risky for the global investors.”