A Saudi Consortium has reached Islamabad with an offer to establish five desalination projects in Pakistan with an investment of $ 2 billion in five years, well informed sources in Board of Investment (BoI) told Business Recorder.
Commercial Counselor Jeddah, sources said, liaised with M/s Muhammad Nazir Chaudhry Chemical Products (MNCP) Ltd Co KSA which has formed an investment consortium with a representative from Saudi Arabia and another from Australia to bring investment proposal for promoting foreign direct investment in Pakistan through a sea water desalination project.
The same consortium had just completed an identical project of sea water desalination with Government of Saudi Arabia on BOT basis on the Red Sea in Yanbu. They are currently operating the project in Yanbu and are negotiating with the government of Saudi Arabia for nine new desalination projects announced on the Red Sea. M/s MNCP had been the pioneer company to introduce desalination projects in KSA (Jeddah Desalination Project on the Red Sea). The investment consortium has sought an identical support to secure their investment and to enter into a similar agreement with GoP as with the Government of Saudi Arabia with following requirements: (i) land for the project at sea to be offered by the government; (ii) though utilities provision is a provincial subject but they request to enter into an agreement with the federal government; (iii) guarantee of the federal government to buy 100 per cent production of the project for 25 years with no refusal to purchase. A detailed legal agreement to be prepared for this sale/purchase in conformity with international rules and regulations and supported by the federal government sovereign guarantee; (iv) payment of the purchased quantity of water on monthly basis with no delay in payments being the responsibility of federal government; (v) federal, provincial or local government may not rationalise the project without 100 per cent payment in advance of the entire project; (vi) Government of Pakistan would be the only authority dealing with the investors, with no interference of the provincial and local government; (vii) federal government to issue necessary approvals, sanctions, permits and full security to the project and its staff including property; (viii) project and its product would be free from all types of federal taxes including provincial taxes, local government taxes, octroi etc; and (ix) investors would be free to repatriate their investment, return on investment, profits etc.
The consortium intends to propose five projects of 200 million litre per day (MLD). Initially each of the proposed projects would be installed at Karachi to convert sea water into potable sweet water as per AWWA standards.
The total capacity of five projects would be 1000 gallons per day (1,000,000 cubic meter/day). The estimated cost of the project is $ 2 billion and would be completed within five years. First line of 200 MLD would be completed in two years. The project is proposed under BOT.
Investment consortium believes that with the proposed arrangements, the people of Karachi could enjoy sweet potable water (meeting AWWA standards) at a very competitive price offered to the GoP i.e. $ 0.6 per M3. They are offering Saudi Royal 2 per M3 (i.e. 0.533 M) to Government of KSA on the Yanbu project and Pakistan may discuss bringing down price from $ 0.6 to 0.5 per M3 with them.
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