The Vortab Co. shared details of its Elbow Flow Conditioner. The Vortab...
Black & Veatch, a world leader in water and wastewater engineering, and Thames Water Aqua International, part of RWE, Europe?s largest multi-utility, have combined their PFI expertise to structure the first integrated wastewater scheme in the Gulf Emirate of Ajman to be implemented on a build-operate-transfer (BOT) basis.
It is the first private finance deal to take responsibility for the retail risk ? the collection of the tariff from property owners and occupiers ? in delivering wastewater services and the first utility project in the Middle East to charge a full cost recovery based tariff for delivery of wastewater management services. The total revenues of the BOT contract, over its 27.5-year concession term, are estimated to be in excess of US$450 million.
The ground-breaking project will see US$140 million worth of new physical infrastructure built in Ajman in the UAE within the first four years. It will provide the country?s first state-of-the-art sewerage system for 350,000 people, connecting more than 45,000 properties to modern sanitation facilities for the first time. The project will also use the latest energy-efficient technology to treat the collected wastewater to a quality suitable for reuse in irrigation, thus delivering a valuable resource to this desert landscape.
Black & Veatch and the regional engineering firm, KEO International Consultants, were founder developers of the scheme. Black & Veatch and Thames Water Aqua International, each holding a 50 percent share, established in April 2002 a new utility company, Ajman Sewerage (Private) Company Limited. The company was formally established within the framework of the country?s first Sewer Law, enacted on 1 May last year by His Highness the Ruler of Ajman, Sheikh Humaid bin Rashid Al Nuami, a member of the Supreme Council of Rulers of the United Arab Emirates.
The scheme also heralds another first in the Middle East by adopting a private sector venture to be responsible for delivering wastewater services to a city based on a users? tariff structured to fully cover the total costs of the wastewater management services to be provided. Black & Veatch has marshaled the expertise of its UK-based Europe Division operations, Black & Veatch Consulting in Redhill, Surrey, and Black & Veatch Contracting in Isleworth, west London, to integrate innovation in technical solution, risk mitigation and financial structuring to ensure true value creation.
Since the passage of the new law, Ajman Sewerage has surveyed and registered every property and its owner in Ajman. Under the law, each property owner is required to contribute to the construction of the network through payment of a connection fee, which will depend on the size of the individual property.
The total project cost includes some US$38 million to be covered by equity, US$77.5 million by a loan package arranged as a club deal, and the balance by payments of connection fees. The loan package itself breaks new ground as the proposed tenor of 14 years stretches the current market norm in utility financing in this region. The four lead arranging banks are Germany?s Bayerische Hypo-und Vereinsbank AG and Bayerische Landesbank, and UAE banks, Mashreqbank PSC and United Arab Bank. The Project Finance team of Mizuho Corporate Bank based in London acted as the financial advisor to the project company and the legal advice to the sponsors was provided by the London and Dubai offices of Denton Wilde Sapte.
At financial close, the shareholding of Ajman Sewerage (Private) Company Limited was restructured as follows: Thames Water Aqua International with 60 percent, Black & Veatch with 10 percent, the Government of Ajman with 20 percent, and Six Construct, a UAE-based subsidiary of Belgium?s Besix, with 10 percent.
Ajman Sewerage will finance, build, operate and manage the new collection network, comprising over 22 pumping stations, 225 kms of gravity pipeline and 30 kms of pumping mains. The system also includes a new 49,000 m3/d wastewater treatment plant.