PUB to award contract for $400-500m desalination plant next month

Tan Hwee Hwee, Business Times AsiaOne 29 Sep 16;

SINGAPORE - National water agency PUB is expected to unveil, within weeks, the winner of a S$400-500 million contract for the construction of Singapore's fourth desalination plant under a design, build, own and operate (DBOO) arrangement.

In April, PUB had announced the tender for the 30 million gallon plant to be built in Marina East. The Business Times understands that the tender drew six bids - four were from Singapore-listed entities Hyflux, United Engineers (UE), Sembcorp Industries and the infrastructure business unit of Keppel Corporation; two others were from the China-linked MCC Land Pte Ltd and Spain's Tedagua.

The tender is understood to entail a two-stage evaluation of the commercial and technical elements of the proposals from the bidders.

After the first-stage evaluation, UE was leading by a wide margin, based on its proposed tariffs for the plant. But informed sources said that technical parameters such as the energy efficiency of the proposed plant would weigh in in the second stage.

A factor that could also influence the outcome of the tender is if any of the bidders (potentially Hyflux, Keppel Corp and Sembcorp Industries) proposes tapping the excess power generated by its existing projects to enhance the overall competitiveness of its proposal.

All four Singapore-listed contenders have previously bagged water-treatment projects from PUB. Hyflux won the contracts for Singapore's first two desalination plants, SingSpring and Tuaspring; Keppel-Seghers, Sembcorp Industries and UE bagged contracts for three NEWater plants.

Sembcorp Industries confirmed to BT its participation in the tender for the Marina East plant.

A Keppel spokesman said, without commenting directly on the tender, that the conglomerate is "regularly evaluating opportunities to grow its businesses". Hyflux and UE did not respond.

Between the two other bidders, Spain's Tedagua is supporting HSL Constructor Pte Ltd in the delivery of a process solution for Singapore's third desalination plant in Tuas.

MCC Land is the Singapore-based property development unit of Shanghai-listed Metallurgy Corporation of China's subsidiary in Singapore, MCC Singapore. MCC Singapore has been involved in the construction of HDB projects, including the main lift-upgrading programmes.

The Marina East desalination plant will add another 137,000 cubic metres (about 30 million gallons) of desalinated water a day to Singapore's water supply.

The award of the contract is expected in October, with construction of the plant projected for 2019.

PUB is aiming to expand its desalination and NEWater capacities to meet up to 85 per cent of Singapore's water needs by 2060.

Singapore is drawing 100 million gallons a day, about a quarter of its daily water demand, from the two desalination plants already in use.

PUB's third desalination facility in Tuas will have a capacity of 30 million gallons per day and begin operations by 2019. After the Marina East plant, a fifth plant, also with a capacity of 30 million gallons, is on the table for Jurong Island; it will be completed around 2020.