SISCO says Madinah, Buraidah, Tabuk projects to cost SAR 3 bln

Mohammed Al-Mudarres, CEO of Saudi Industrial Services Co. (SISCO)

Mohammed Al-Mudarres, CEO of Saudi Industrial Services Co. (SISCO), said the projects of setting up Madinah, Buraidah and Tabuk stations will cost nearly SAR 3 billion.

He told CNBC Arabia TV channel that the investment returns would not be less than 10% for each project. "It is early to talk about the awarding. The projects are being studied financially."

After awarding the project, the implementation will last 24-30 months, to be followed by operation, Al-Mudarres said, adding that the relevant impact will reflect positively on International Water Distribution Co. (Tawzea) and SISCO in three years.

The bid submitted by Tawzea is the lowest financially, and the best technically. Thus, it was chosen, but the project has not been fully awarded.

In addition to the above two projects, the company is working on Taif sewage project. It is also submitting bids for other projects such as those related to managing and developing networks as well as reducing surplus from networks.

This is due to the company's good financial solvency and appropriate technical ability, the top official said, stressing that SISCO continues to actively participate in the development of the water sector.

"There is no plan to increase SISCO or Tawzea's capital to finance the projects," Al-Mudarres said. He added that both companies sit on pile of cash, and such projects are usually financed by 80% from local banks and 20% from the company's cash sources.

SISCO announced that the best-bidder consortium was awarded, on Aug. 25, the Madinah, Buraidah and Tabuk Independent Sewage Plant projects by Saudi Water Partnership Co. (SWPC).

The winning consortium comprises Amiantit’s 50%-owned subsidiary Tawzea with a 35% stake, Spanish firm Acciona (35%) and Tamasuk (30%).

Upon final award of the project, the consortium will finance, develop, design, build, operate and maintain the plants and then transfer the ownership on build-operate-transfer (BOT) basis, according to data compiled by Argaam.