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8 October 2004 - The grid interconnection authority for the GCC states (GCCIA) has appointed Canada's SNC Lavalin to provide consultancy services and has approved the list of prequalifiers for the first phase of the GCC power grid project.
Phase 1 of the project, due to be completed in the first quarter of 2008, will cost $1.19bn and will link the power networks of Saudi Arabia, Kuwait, Bahrain and Qatar, according to a report from MEED.
Under its latest contract on the project, SNC will assist in preparing the tender documents, tender evaluation and the selection of contractors for phase 1. Its contract also includes an option for construction supervision. SNC was involved in drawing up a feasibility study for the project in the early 1990s and, more recently, in the consortium headed by Gulf Investment Corporation (GIC), which has updated the study.
One of SNC's first tasks will be to notify engineering, procurement and construction (EPC) companies, which applied for prequalification in early 2004, if they have been shortlisted to bid for the five packages, divided into 13 lots. The GCCIA has recently approved the prequalification lists and SNC is due to send out notification letters to companies by mid-October.
According to MEED, the five packages are: the 400-kV substations, of which there are six lots; the HVD converter station (one lot); the 400-kV transmission lines (four lots); the submarine cable (one lot); and the telecommunications and control centre.
The tender documents are 60-70 per cent complete, with the main outstanding issue to be finalised being the GCCIA terms and conditions. This is expected to take about three months, allowing for the packages to be issued for tender in early January. Prequalifiers will be given eight-10 weeks to prepare their proposals and will be invited to attend a tender conference in mid-February where the GCCIA will answer queries and clarify outstanding issues.
Once bids have been received in March, technical bid evaluation will proceed. Commercials will then be opened from only those companies that are judged technically compliant. The first contract awards are expected in May 2005, allowing for project completion to take place in the first quarter of 2008.
Tendering is expected to begin in November on one other contract covering the site survey for the submarine link between Saudi Arabia and Bahrain. The survey will determine which of two routes will be selected for the 400-kV link between Ras al-Qurrayah in Saudi Arabia and Al-Jasra in Bahrain.
GCCIA will be responsible for signing and executing all the contracts, as well as payments. The phase 1 project will be financed through a 65:35 debt/equity package by the four member states. The GCCIA board has already called on the four to provide some equity and, once received, it will be followed by the debt contributions, which states are allowed to provide in the manner they see best. Under the shareholding structure for phase 1, Saudi Arabia will own 40 per cent, Kuwait 33.8 per cent, Qatar 14.8 per cent and Bahrain 11.4 per cent.
Bahrain's three-year chairing of the GCCIA will expire at the end of October and the chairmanship will pass to Saudi Arabia. As a result, a new board of directors is due to be elected by year-end.
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