[Excerpt: About the time schedule for the project, Alawaji said bidders
have already been pre-qualified for the different packages in the first
quarter of 2004. He said that soon the bids will be evaluated and it is
expected that contract awards will be made in August/September
2005.....The power grid is expected to boost electricity network in GCC
member states. It will help them exchange electricity to meet growing
needs, utilize their surplus output, save money on new power projects
and ensure uninterrupted electricity supply.
....The GCCIA has appointed Canada-based SNC Lavalin to prepare tender
documents and tender evaluation and selection of contractors for the
first phase.]

http://www.arabnews.com/?page=6&section=0&article=61085&d=26&m=3&y=2005&pix=business.jpg&category=Business

GCC Power Grid Work Set to Start in September
P.K. Abdul Ghafour, Arab News
 

JEDDAH, 26 March 2005 � Work on the multibillion-dollar GCC power grid
project, which is to link the six-member Gulf Cooperation Council with
an integrated electricity network by the year 2010, will start in
September this year.

Dr. Saleh Alawaji, chairman of the GCC Interconnection Authority
(GCCIA), and Saudi deputy minister for electricity affairs, said tenders
for the project�s first phase, which will cost $1.2 billion, would be
opened in April and May.

He said the project, which is to reduce the cost of power generation in
the six GCC states of Saudi Arabia, Qatar, Bahrain, Kuwait, Oman and the
United Arab Emirates, would be carried out in three phases.

GCCIA�s board of directors held a meeting in Abu Dhabi on Thursday and
discussed matters related to the project.

The authority will award 13 contracts worth $1.25 billion to link Saudi
Arabia with Kuwait, Bahrain and Qatar in the first phase.

Alawaji said the board meeting endorsed the audit report of the
authority�s financial statement for 2004 as well as the board�s report,
which included reassessment of capital and finance plan for the giant
project.

Under the first phase, an 800-km 400KV overhead line will link Kuwait�s
Al-Zour station with Doha and a 400KV submarine line will link Saudi
Arabia with Bahrain.

The 13 contracts include sub stations, back-to-back HVDC converter
station, overhead transmission lines, submarine cables, and a control
center. Alawaji said the first phase would be completed by 2008.

Saudi Arabia has offered to meet 40 percent of the cost of the first
phase while Kuwait will provide 36.5 percent, Qatar 13.5 percent and
Bahrain 10 percent.

The second phase will link the United Arab Emirates with Oman. The
resulting two mega grids will be joined in the final phase.

About the economic viability of the ambitious project, the chairman said
the benefit to cost ratio for Phase-1 is 1:5 and that the pay back
period for the investment is less than four years. Given the small
incremental cost of Phase-III, he said this phase would further improve
the attractiveness of the project.

Upon completion of Phase-I and the reduction of generation capacity, the
total cost savings rate of return after four years from operations would
be $2.5 billion. Once Phase-III is completed, Alawaji said that the
total cost saving rate of return after three years from operations is
projected at $3.35 billion.

The GCC countries gave the green signal for the power grid late last
year after the project was declared technically feasible. �The intent is
to enable a wide participation by international contractors in the
implementation of the project in an efficient and economic manner,� he
said.

About the time schedule for the project, Alawaji said bidders have
already been pre-qualified for the different packages in the first
quarter of 2004. He said that soon the bids will be evaluated and it is
expected that contract awards will be made in August/September 2005.

The power grid is expected to boost electricity network in GCC member
states. It will help them exchange electricity to meet growing needs,
utilize their surplus output, save money on new power projects and
ensure uninterrupted electricity supply.

The GCCIA has appointed Canada-based SNC Lavalin to prepare tender
documents and tender evaluation and selection of contractors for the
first phase.

The GCC states began discussing the project some 20 years ago to
integrate their transmission systems and make better use of their
power-generating capacity.


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