IFC’s Advisory Services Help Cut Costs at Saudi Arabia’s King Abdulaziz International Airport
In Dubai
Moazzam A. Mekan
Telephone: +(971) 4 360 1000
Email: mmekan@ifc.org
Jeddah, December 27, 2006: The International
Finance Corporation, the private sector arm of the World Bank, and the
General Authority of Civil Aviation of the Kingdom of Saudi Arabia announced
today that a winning bidder has been selected for a long-term concession
to develop a new desalination plant for King Abdulaziz International Airport
in Jeddah.
IFC advised and assisted the airport authority in structuring this public-private
partnership transaction under a long-term “build-transfer-operate” concession
agreement, with a private sector partner chosen through a competitive bidding
process. The airport currently relies on outdated desalination plants,
which produce an unreliable and costly supply of water. Under the 20-year
agreement, the concessionaire will replace these with a new seawater reverse
osmosis plant, which will have an initial capacity of 30,000 cubic meters
of potable water per day.
A consortium led by SETE Technical Services S.A. of Greece was selected
from among six bidders, based on the lowest quoted price of water. The
price quoted by this wining bidder will save the General Authority about
$12 million per year.
Bernard Sheahan, IFC’s Advisory Services Director, noted, “Private sector
participation in this project will benefit airport users. It will significantly
lower the cost of water and introduce international best practices to operate
the desalination plant, leading to a more sustainable and better quality
water supply for the airport.”
H.E. Abdullah M. N. Rehaimi, President of the General Authority of Civil
Aviation, added, “The General Authority is undergoing a rapid transformation
into a corporatized organization, with an overall objective of achieving
full commercialization. This project and another to expand and rehabilitate
Jeddah airport’s Hajj terminal are milestones in our move toward introducing
more private sector participation in our activities. The desalination project
is very timely, as it will enable us to meet an increasing demand for water.
It is a first step in our broader strategy to focus on our core aeronautical-related
business.”
Michael Essex, IFC’s Regional Director for the Middle East and North Africa,
commented, “Our participation in this successful transaction fits with
IFC’s strategy to support and strengthen the role of the private sector
and to provide value-added services in the Gulf Cooperation Council region,
including Saudi Arabia.”
About IFC
The International Finance Corporation, the private sector arm of the World
Bank Group, is the largest multilateral provider of financing for private
enterprise in developing countries. IFC finances private sector investments,
mobilizes capital in international financial markets, facilitates trade,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to businesses and governments. From its
founding in 1956 through FY06, IFC has committed more than $56 billion
of its own funds for private sector investments in the developing world
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. With the support of funding from donors, it
has also provided more than $1 billion in technical assistance and advisory
services. For more information, visit www.ifc.org.
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