Published January 16, 2009

Sembcorp looks set to win billion dollar Oman deal

It has reportedly been named 'preferred bidder' for the project

By RONNIE LIM

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SEMBCORP Industries looks on course to win its second multi-billion dollar power and desalination project in the Middle East, having reportedly just been named 'preferred bidder' for the US$1 billion-plus Salalah independent water and power project (IWPP) in Oman.

If it is confirmed as the winner, it will be the Singapore group's second win in the Gulf.

Specialist publication MEED, or the Middle East Business Intelligence, reported this on Wednesday, following an earlier report this week by Infrastructure Journal which said that Omani officials had told Sembcorp that it would be named as the IWPP's preferred bidder 'imminently'.

It suggests that Sembcorp's joint venture with Oman Investment Corporation (OIC) has been chosen from the final grouping of three contenders for the project.

Sembcorp when contacted yesterday declined comment at this time.

Its bid to undertake the Salalah IWPP began early last year, with the Omani government whittling down a list of eight prequalified international groups to just three in July.

Its other two rivals are a Mitsui/Saudi Oger/WJ Towell consortium and UK's International Power/Muba- dala, with Mubadala being the state-owned investment fund of the United Arab Emirates, and whose name is emblazoned on the Ferrari Formula 1 car which it sponsors.

OIC - Sembcorp's partner - is a private equity company whose shareholders include Gulf Investment Corp (50 per cent), the Oman government (10 per cent), National Investment Funds Company (35 per cent) and BankMuscat (5 per cent).

If Sembcorp/OIC is confirmed as the winner, it will be the Singapore group's second IWPP win in the Gulf, after its US$1.7 billion Fujairah IWPP in the UAE in July 2006.

The Salalah project, located in the south of the Sultanate, is roughly two- thirds the scale of the Fujairah one.

Salalah IWPP comprises a 400-megawatt power station and a desalination plant producing 15 million gallons of water per day, compared with Fujairah's 535MW power plant and desalination capacity of 379 million litres per day, plus an expansion of the power project by a further 225MW.

The project will help meet electricity demand in the Salalah region which is expected to more than double to 570MW in 2013, from 230MW in 2007.

Sembcorp - which last June set up a new operational base in Abu Dhabi - has been pushing to grow its presence in the Middle East and North Africa.

The Salalah IWPP is the fourth such project in the Middle East which the Singapore group has tendered for, having earlier tried in Soha in Oman and for the US$3 billion Fujairah II project.