Metito's insight to on-going projects and focus into renewable energy

Published: 7 May 2020 - 11 a.m.

Global intelligent and sustainable water management solutions firm Metito – which has specialised in operations covering design and build, utilities, and specialty chemicals for more than 60 years – has begun to place a distinctive focus on project development in the renewable energy sector.

Metito was the first company to introduce the reverse osmosis technology outside the US in 1972, and also the first to pioneer concession contracts with private entities, under a build-own-operate-transfer (BOOT) model, in the GCC region.

Now, the firm’s involvement in Saudi Arabia’s gigaprojects; landmark developments such as the Burj Khalifa in the UAE; among other GCC projects, are turning heads across the region.

Sharing details on its ongoing projects in an exclusive conversation with Construction Week, the managing director at Metito, Rami Ghandour, says: “King Abdullah Economic City (KAEC) awarded Metito Saudi Ltd (Metito) the contract to design and construct a seawater treatment and desalination plant partially powered by solar energy."

Metito was awarded the 45,000m2 project after competing with 10 regional and international firms in a competitive tender.

Ghandour also revealed construction details on Metito’s $58.5m (SAR220m) desalination plant project in KAEC.

Phase 1 of the KAEC desalination plant will produce 30,000m3 of drinking water per day.

“We have put a lot of infrastructure in place and civil work is done for 60,000m3 per day, although currently the RO units will produce 30,000m3 per day,” Ghandour adds.

He also alluded to Metito’s involvement in a fast-track project within Saudi Arabia’s gigaproject – The Red Sea Project – with details on the project likely to be announced in the coming months.

Benefits of BOOT in wastewater plants

A consortium led by Metito Group – which comprises Saudi Arabia’s Mowah and Egypt’s EPC contractor Orascom Construction – has begun construction of the first independent sewage treatment plant (ISTP) project in the kingdom’s Dammam West site.

The project marks the first ISTP to be awarded by the Saudi Water Partnership Company (SWPC) to investors under a build-own-operate-transfer (BOOT) model.

Ghandour says: “This is an exciting landmark project in the kingdom. It is expected to play a key role in the KSA’s plans to tender similar projects to the investors in different regions across the kingdom.

“The plant has a designed capacity of 350,000m3 per day, as well as an initial capacity of 200,000m3 per day, and will serve the western region of Dammam. We’re also involved in the construction and in the operations and management of the project.”

The notice to proceed (NTP) has been issued – allowing contractors to mobilise and start construction on site – following the submission and execution of relevant project and finance documents by the banking group and the consortium developing the project.

Commenting on the benefits of the BOOT model, Ghandour says: “The build-own-operate-transfer model is quite new to the kingdom. Saudi Arabia, of course, has witnessed private sector investment and development of projects in the power sector, and more recently, in the desalination sector.

“However, this is the first project of its kind in the wastewater sector. Our project has proved that the BOOT model works in the wastewater sector. Subsequent to us winning this project through a large international public tender, two such projects have been awarded.”

By definition, the BOOT model places the point of responsibility for the entire project on a single entity.

“If you are the government entity giving out the contract, you no longer have to worry about a different firm designing it; a different firm building it; and a different person operating it,” Ghandour explains.

“Instead, all of those interfaces are gone because all of the tasks – build, own, operate, design – are all done by the same entity. So, the chances of one firm blaming another when something goes wrong goes out the window.”

In addition, since the BOOT model is a long-term contract, it provides a full life-cycle vision.

“The developer is naturally incentivised to come up with the best long-term solution. It’s important to note that this might not necessarily mean the bid with the lowest capital expenditure."

Ghandour adds: “Many a time, the most optimum solution is neither the cheapest bid, nor is it the most expensive option that consultants suggest to the developers. That’s why when you have a structure like the BOOT model in place, where the responsibilities rest with one entity, we have to deliver the project whether the solutions are optimum or not.

“It’s our responsibility to take care of the entire project – and that’s the ultimate benefit at the end of the day.”

Combatting COVID-19 in construction

Metito completed work on certain desalination plants before the precautionary measures – such as the lockdowns, social distancing, and remote working – were announced by the government to curb the spread of novel coronavirus (COVID-19) outbreak.

Ghandour confirms: “The delivery deadlines and milestones have not yet been adversely affected by the COVID-19 crisis. We are still on track as of right now.

“However, this is also dependent on how long the lockdowns and other measures will be in place. We have been granted limited exceptions for critical personnel to be able to continue working on site.

“At this stage, it’s very difficult to quantify what is the impact of COVID-19, as we’re still in the early stages, and we’re dealing with situations two weeks at a time. However, if the COVID-19 precautionary measures are deemed necessary for an extended period of time, it will definitely have an effect on deadlines.”

On the other hand, it is interesting to note that despite the liquidity crunch and the ongoing COVID-19 situation, the tender process continues to be extremely competitive in the GCC region.

“We are still witnessing extremely aggressive prices in the tendering process. For example, on the desalination side, the latest project – which we were not part of – that was awarded was particularly interesting. The total per-cubic-metre cost that was quoted for the entire project was lower than the client’s operating costs alone on existing plants,” he says.

High levels of competitiveness are in turn optimising all aspects of the project.

“The costs of a project primarily comprise of the EPC, the O&M, and the finance costs. Trying to optimise all three at the same time, results in quite an aggressive pricing. In fact, I would argue, the last few bids may have had too much competition.” Ghandour explains.

“Such aggressive pricing and competitiveness may not be sustainable as it may cause a loss of interest due to the highly compressed margins of returns. In the long-term, it’s likely that the market will stabilise, although at this point it remains to be extremely competitive.”

Making a mark in the industry

Metito is also constructing a large expansion project for Sharjah Municipality, which involves the upgrade of the Sharjah Sewage Treatment Plants 4 and 5.

“We also have recently put in a facility to recycle treated effluent, which produces the feedwater for the district cooling of the Burj Khalifa and the Dubai Fountain in Downtown Dubai. The water used in the fountain is ‘our water’, which is something that we are excited about,” Ghandour says.

Metito is also well recognised for the first wastewater BOT project in the Middle East, which was in the Dubai Investments Park (DIP). The amount of wastewater generated by approximately 10,000 people in the DIP community due to water consumption amounts to approximately 2 million litres per day.

“We implemented a technology to recycle raw wastewater to a level where it can be used both for irrigation purposes as well as the water required for cooling towers. The amount of water purified by Metito in a single day in DIP is able to irrigate approximately 150,000m2 of dry land.”

Given that it operates in a region where water is a scarce and highly valued commodity, water reuse has always been at the core of Metito’s core values as an organisation.

Ghandour says: “It is a very valuable resource and it is only natural for it be reused. We have been focused on this for many decades, and we’ve built such plants across Dubai, not just for the Dubai Fountain, but also on the Palm Jumeirah, in the Dubai Parks and Resorts, among others.”

The firm has also built three of Egypt’s four largest desalination plants, including the one in Al Galalah, which is near the Suez on the Red Sea.

“We have also been awarded the world’s largest water reuse plant – the El Mahsama project in Egypt, which has a capacity of 1 million cubic metres a day. This project is particularly interesting because we’re collecting irrigation runoff water, treating it, passing it through a tunnel under the Suez Canal, and that water is being used to irrigate Western Sinai,” he adds.

Project development of renewables

Metito delved into renewables by developing solar for its water-based projects. Two of its desalination projects in Saudi Arabia had a solar component to them, which helped the firm venture into solar expertise.

“Following the implementation of solar in our Saudi desalination plants, we put a full solar roof on our factory and headquarters at the National Industries Park in Dubai. This way, we achieved a net zero power consumption on these facilities,” Ghandour explains.

“Continuing on that, we decided that this is a good business to be in – even where it’s not purely related to water. So, we decided to build up our capabilities through a project development team focused on the renewable sector.”

In 2019, a Metito Group-led consortium won its first tender for a solar power plant in Bangladesh.

The consortium included Metito Group, solar power producer, Jinko Power, and the energy and water arm of Saudi's AlJomaih Holding Company, AlJomaih Energy and Water.

The consortium was awarded the Rangunia 55 megawatts electric (MWe) ac grid-tied solar power plant project.

The project was awarded by the Bangladesh Power Development Board (BPDB) following approval from the Power Division of the government's Ministry of Power, Energy, and Mineral Resources.

The consortium was recognised by BPDB as the lowest bidder with a tariff of $0.0748/kWh, accounting for the lowest tariff ever reported in Bangladesh.

The project, which is expected to be developed on a build-own-operate (BOO) basis under a 20-year concession agreement, is in line with Bangladesh's vision to reduce environmental pollution.

The solar power plant will be constructed in Rangunia, in Chattogram, Bangladesh, on a BPDB-provided land. The project is expected to be commissioned by the second half of the year 2021.

This project demonstrates Metito’s transition from being a water management solutions company to becoming a utility management solutions firm, with a focus on project development in the renewables sector.

Ghandour concludes: “We are not doing standalone EPC projects in the renewables sector as there are other firms that are competitive in that.

“However, in terms of being a project developer, we are across the board and we have plans – in due course – to grow into other utilities.

“Our history, origin, and our sheer volume and size of projects is rooted in the water and wastewater sector. However, we are expanding into other utilities and renewable project development as we continue to grow.”

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