Ras Azzour could cost 25% less says SWCC

Saudi Arabia expects the cost of the Ras Azzour power and water desalination project to be 20-25% below initial estimates partly because the price of materials have fallen, according to Reuters.

The project had been estimated to cost US$6 billion when Japan's Sumitomo Corp led a consortium to build and operate the plant. Sumitomo said in May 2009 it had put on hold plans for the plant.

"We expect the price to be less than the contractor's projections back then - 20%, maybe more; the average is between 20 and 25%," the governor of the Saline Water Conversion Corporation (SWCC), Fehied F Alshareef, told reporters at an industry meeting in the industrial city of Jubail on 19 October 2009.

The governor declined to give figures, but said the lower cost estimate was due to a drop in the price of materials and because the project description had changed. The Ras Azzour plant will produce 2,400 MW of electricity, more than under the original plan. The original desalination plant was to have produced around 1 million m3/d.

SWCC said on 17 October 2009 that it would invite bids in mid-November for the project and that it had signed an agreement with Saudi mining firm Maaden and Saudi Electricity Co to share the power and water production.

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