1. An Overview of the GCC Wastewater & Water Sector NWC conference, Jeddah 6 October 2010 Angus Hindley, Research Director, MEED

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3. STP infrastructure is under pressure right across the GCC Strong economic and population growth, coupled with insufficient investment, has seen daily inflows exceeding design capacity across most of the GCC wastewater industry, leading to rising concerns about TSE quality

4. Networks have also been feeling the strain While Oman and Saudi Arabia are looking to significantly expand network coverage, other GCC states are having to deal with major issues related to aging infrastructure

5. The GCC requires significant new STP capacity Treatment capacity will have to more than double in the period 2009-15 if population growth is to be met, TSE quality is to improve and some existing capacity is to be retired Country Existing capacity, 2009 (cm/d) Additional capacity planned by 2015 (cm/d) Estimated cost of additional capacity ($m) Bahrain221,000280,000493 Kuwait602,000795,0001,399 Oman106,000230,000405 Qatar285,000437,000769 Saudi Arabia1,952,0002,224,0003,914 UAE, of which:965,0001,607,0002,828 Abu Dhabi414,000875,0001,540 Dubai260,000400,000704 Northern Emirates291,000332,000584 Total4,131,0005,573,0009,808

6. But the GCC has made a start in building new capacity As of 2009, there was an estimated 2.1 million cm/d of major plant capacity under construction in the GCC wastewater sector, with the UAE accounting for about half of the total

7. The outlook for 2010-11 The GCC is forecast to deliver about $3.5bn of wastewater and water awards (excluding desalination) in both 2010 and 2011 with Saudi Arabia expected to overtake the UAE as the biggest source * Covers actual awards for first nine months of 2010 and excludes desalination

8. Clients are using different procurement models for the new capacity Kuwait has become the latest GCC state to declare an intention to follow the private procurement model for new wastewater treatment capacity LocationProjectClient Procurement modelStatus Abu Dhabi Al-Wathba/Al-Ain STPsADSSCBOOT Under construction Bahrain Muharraq STP and conveyance line Finance Ministry/Works MinistryBOO/BOOT Preferred bidder stage Kuwait Umm al-Hayman STPPTBBOO Consultant prequalification OmanDarsait STPHayaEPC EPC contract awarded Qatar Doha south extensionAshghalEPC EPC contract awarded Saudi Arabia Wastewater lift station, Jeddah northNWCEPC Under construction

9. Closing remarks The GCC wastewater sector will need to more than double treatment capacity in the period 2009-15 to meet demand and replace infrastructure that will have to be retired An estimated $10bn will be required to build the new treatment capacity alone The private sector is likely to be called upon to deliver 30-40 per cent of the total with Bahrain, Abu Dhabi and potentially Kuwait expected to be the largest PPP markets The role of the private sector is also set to extend with more network management type contracts anticipated in Qatar and possibly Kuwait Competition for STP contracts will intensify with Korean contractors expected to significantly up their presence in the sector as a result of declining opportunities in the regional oil and gas market

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