PUB, the national water agency, has announced that it had selected Keppel Infrastructure Holdings Pte Ltd as the Preferred Bidder for Singapore’s fourth desalination plant, to be located in Marina East.
The agency said that as the Preferred Bidder, Keppel Infrastructure Holdings will form a concession company to enter into a Water Purchase Agreement (WPA) with PUB by January 2017. The WPA will take full effect once all agreements have been finalised and executed, and the concession company achieves financial close.
PUB noted that the plant is expected to commence operations in 2020 and will add another 30 million gallons (mgd) or approximately 137,000 cubic metres of water per day to the nation’s water supply.
The plant will help to strengthen Singapore’s drought resilience as well as enhance the reliability of water supply for the city and eastern Singapore areas by providing an alternative supply to these areas. Located near water demand zones in the city and eastern Singapore, the Marina East desalination plant will also have the capability to treat freshwater from Marina Reservoir.
According to the agency, the open tender attracted sixteen bids from seven bidders (both local and international companies). Similar to the first two desalination plants at Tuas, the fourth desalination plant will be constructed under a Design, Build, Own and Operate (DBOO) arrangement.
It said that at a first-year price of $1.07867 per cubic metre, Keppel Infrastructure Holdings will supply product water to PUB over a 25-year period from 2020 to 2045.
“Desalinated water is an important part of our water supply portfolio. As a source independent of weather fluctuations, it is resilient against the vagaries of climate change and bolsters the reliability of our water supply against prolonged periods of dry spells and droughts. We have plans to expand Singapore’s desalination capacity to meet up to 30% of our future water needs,” said Mr Chua Soon Guan, PUB’s Deputy Chief Executive of Policy and Development.
The Marina East Desalination Plant (MEDP) is PUB’s sixth DBOO project between PUB and the private sector, the first five being the 30 mgd SingSpring desalination plant, the 32 mgd Keppel-Seghers Ulu Pandan NEWater Plant, the 50 mgd SembCorp Changi NEWater Plant, the 70mgd Tuaspring Desalination Plant and more recently, the 50mgd second NEWater Plant in Changi.
PUB stated that that desalinated water is one of PUB’s Four National Taps, a long term water supply strategy to ensure a robust and sustainable supply of water for Singapore. The other three sources are water from local catchments, imported water from Johor and NEWater. Desalination currently meets 25% of Singapore’s water demand.
The Singapore investment company, Temasek Holdings owns 15.9% of Keppel Infrastructure as of 1 March 2016 while Temasek Holdings owns 20.43% of Keppel Corporation as at 16 May 2016, which owns 18.2% of Keppel Infrastructure as of 1 March 2016.