Doosan Heavy Industries and Construction has won a US $1.14 billion (AED4.2billion) contract to construct the M Station cogeneration plant in Dubai.
The engineering, procurement and construction (EPC) contract covers the completion of phase one of the Dubai Electricity & Water Authority (DEWA) plant.
Phase one of the complex will provide 1,300MW of power and around 318 million litres of desalinated water per day. The final capacities of M Station will be 2,000MW and 480 million litres per day of desalinated water.
A decision was made to complete the project in two phases after the original tender process in Autumn 2006 failed to produce the minimum number of bids required by law for the contract to be awarded. Under the original conditions DEWA received one bid for the power package and two for the desalination works.
Following discussions with the firms that had originally purchased the tender documents DEWA found that the timescales involved and size of the plant had deterred them from bidding.
"Most of the contractors and manufacturers worldwide are busy; we understood from the suppliers that we needed to reduce the size of the package, which we did, then we were able to get four bidders," explained Saeed Mohammad Al Tayer, MD and CEO of DEWA. The financial risk involved in the project was also cited by contractors as a reason for not bidding.
"When you reduce the size of the plant the risk will be less; that added to why we were successful in attracting the bids," stated Al Tayer.
A decision was made to split construction of the plant into two phases and bidding for the reduced project packages was opened in late 2006.
Doosan has since awarded a contract to power generation firm Alstom to supply two steam turbines for the plant. This will see the firm supply two turbines of 240MW capacity each. In another deal, Siemens will provide gas turbines to M Station.
In addition to the co-generation plant, the overall project will include three 400kV substations and associated works. The plant is scheduled to be fully operational by April 2010.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.