Kharafi awards US$ 320M Sulaibiya contracts

The Kharafi Group signed equipment supply and multi-year service contracts worth US$ 320 million with the US company Ionics, Incorporated for a 100-million gallon per day wastewater treatment facility at Sulaibiya near Kuwait City.

The Kharafi Group signed equipment supply and multi-year service contracts worth US$ 320 million with the US company Ionics, Incorporated for a 100-million gallon per day wastewater treatment facility at Sulaibiya near Kuwait City.

The Sulaibiya plant will be the largest membrane-based water reclamation and reuse facility in the world and will convert municipal effluent into potable quality water for agriculture and irrigation. It will be the first wastewater build-own-operate (BOO) project in the region. Kuwait has one of the highest water consumption rates in the world, so the water reuse facility will help meet the country's water demands.

Ionics will participate in the project directly, and through several of its European subsidiaries in three ways:
• a 25% equity partner in the project company;
• the designer and supplier of the reverse osmosis (RO) and ultrafiltration (UF) membrane-based water purification systems and;
• the operator of the membrane portion of the facility over the 27.5-year contract period.

Ionics will include US$ 130 million relating to this project in its reported bookings for the second quarter. The amount includes revenue for the design and supply of the RO and UF portion of the facility in addition to revenue for the first five years of Ionics' contract to operate the RO-UF facility.

The consortium led by the Kharafi Group received the concession agreement in early 2001 from the Kuwait government to recover and upgrade tertiary-treated wastewater from Kuwait City and the surrounding area. The purified water will satisfy agricultural requirements that currently affect drinking water supply.

Projected revenues to the project company over the life of the contract are expected to total more than US$ 2 billion. The Kharafi Group formed a separate joint venture company to construct the civil works and facility infrastructure, in addition to other portions of the project. The Kharafi Group is a major Middle East corporation with diversified activities and US$ 3.3 billion turnover.

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