Samsung Engineering has asked the World Bank’s International Center for Settlement of Investment Disputes (ICSID) to begin arbitration proceedings against Saudi Arabia over the cancellation of its contract on Yanbu 3 water and power project.
The ICSID provides for settlement of disputes between investors/private companies and nation states, by conciliation, arbitration, or fact-finding. The move follows the decision by Saudi Arabia’s national water agency, Saline Water Conversion Corporation (SWCC), to cancel its contract with Samsung in January 2017 owing to a dispute over project changes.
Yanbu 3 power and water project is a major construction contract to build a power generation plant with 2,500 MW capacity, and a multi-stage flash desalination plant of 550,000 m3/d. The whole project cost is SAR 5.16 billion ($1.37 billion), reports Reuters.
In 2012, the power element of the project was awarded to a consortium of Shanghai Electric, Samsung Engineering, and Saudi Al Toukhi Group. The $1 billion desalination contract, covering equipment design, manufacturing, installation, and testing, went to Doosan Heavy Industries & Construction.