Dubai Municipality is preparing to launch the tender process for the initial two packages of the $22 billion Dubai Strategic Sewerage Tunnels (DSST) project.
According to previous reports by MEED, the first contracts to be issued will be for packages J1 and W, with subsequent tenders for J2 and J3 following at intervals of approximately six to twelve months.
Overview of the First Two Packages
The J1 package involves the northern section of the Jebel Ali tunnels and the associated terminal pump stations (TPS). This segment will feature around 42 kilometers of tunnels along with an additional 10 kilometers of link pipelines.
The W package, covering the Warsan area, will include 16 kilometers of tunnels, a TPS, and approximately 46 kilometers of link pipelines.
Expected Tender Timeline
A source familiar with the project has indicated that the request for proposals (RFP) could be issued as early as the end of this week.
Last week, MEED reported that at least three companies have been prequalified to lead consortiums in the bidding process:
- Etihad Water & Electricity (UAE-based subsidiary)
- Itochu (Japan) & Plenary (Australia)
- Vision Invest (Saudi Arabia)
Industry insiders suggest that the Plenary-Itochu consortium may partner with Samsung C&T (South Korea) and Webuild (Italy), while discussions are still ongoing for final partnerships in the remaining two consortiums.
Potential Bidding Teams
Reports indicate that the engineering, procurement, and construction (EPC) group consisting of Abu Dhabi’s National Marine Dredging Company and India’s Afcons Infrastructure, along with PowerChina, are engaged in discussions with either Vision Invest or Etihad Water & Electricity. Some sources have suggested that Vision Invest and Etihad Water & Electricity may join forces in a single bid due to limited availability of bankable EPC contractors.
Additionally, Japan’s Marubeni and Saudi Arabia’s AlJomaih Water & Energy are still evaluating their participation.
Investor Interest and Prequalification
As of October, more than a dozen companies expressed interest in qualifying as investors or sponsors for the public-private partnership (PPP) model of the project. Some of these firms include:
- Abrdn Investcorp Infrastructure Investments Manager (UK)
- Besix (Belgium)
- China Railway Construction Corporation (China)
- China State Construction Engineering Corporation (China)
- Nesma Company (Saudi Arabia)
- Samsung C&T (South Korea)
- Webuild (Italy)
PPP bidders will consist of prequalified consortiums that include sponsors, EPC contractors, and operations and maintenance service providers.
Project Costs and Structure
The overall project is expected to require approximately AED 30 billion ($8 billion) in capital expenditure. Over the full concession period, the total cost is projected to reach AED 80 billion ($22 billion).
Before investors could be prequalified, Dubai Municipality first screened EPC contractors that will partner with developers or investors for bidding. The approved EPC contractors for J1, W, and J2 packages include:
- Acciona Construccion (Spain) – Dubai Branch
- Besix Construct (Belgium)
- China Harbour Engineering (China)
- China Railway Group (China)
- Daewoo Engineering & Construction (South Korea)
- National Marine Dredging Company (UAE) / Afcons Infrastructure (India) / ITD Cementation India
- Samsung C&T Corporation (South Korea) – Dubai Branch
- Webuild (Italy)
Project Breakdown and Future Procurement
The DSST project is divided into six key packages, all structured under the PPP model with concession terms ranging from 25 to 35 years.
- J1 and J2: Comprise the Jebel Ali tunnel sections
- W: Covers the Warsan tunnel system.
- J3: Includes additional deep sewerage tunnels, links, and TPS components
The J1, J2, and W packages will be implemented under a design, build, finance, operate, and maintain (DBFOM) framework with concession periods of 25-35 years. J3 will follow a design, build, and finance (DBF) model, with Dubai Municipality assuming operational responsibility upon completion.
The final two packages of the project focus on upgrading and expanding the Jebel Ali and Warsan sewage treatment plants. Procurement for these segments is expected to take place at a later stage.
