Saudi Arabia’s Water Authority has cancelled a 300 million litres per day seawater desalination project awarded to Chennai-based water technology company Va Tech Wabag, prompting the company to seek details on the decision and the next course of action.
Wabag said the Saudi Water Authority notified all tender participants through the Etimad electronic government procurement and tendering platform that the tender for the Yanbu project had been cancelled due to internal reasons attributable to the customer. The company disclosed the development on Saturday.
The project involved the design, engineering, supply, construction and commissioning of a 300 MLD mega seawater desalination plant in Yanbu, in the Kingdom of Saudi Arabia. A plant of this planned capacity would have been designed to produce up to 300 million litres of desalinated water a day, although the company’s statement did not provide details on the plant’s construction schedule, expected cost or intended commissioning date.
According to Wabag, the project had already moved beyond the award stage. The company said it had completed the necessary formalities and executed the contract, which was submitted to the Saudi Water Authority for counter-signature and formal commencement of the project.
The cancellation therefore affects a project for which contractual steps had been initiated, but the company did not state whether construction activity had begun or whether any work had been carried out at the site. It also did not disclose whether the cancellation would lead to compensation, a revised tender or a fresh procurement process.
“Subsequent to the award, the company had completed the necessary formalities and executed the contract, which was submitted to the customer (Saudi Water Authority) for their counter-signature and formal commencement of the project,” Wabag said in its statement. The company added that the customer had notified tender participants of the cancellation through the Etimad portal.
Wabag said it is approaching the Saudi Water Authority to understand the reasons in greater detail and determine the next course of action. The company’s statement did not identify the specific internal reasons cited by the authority or indicate whether the project could be revived under a modified procurement process.
The development highlights the administrative stages that can intervene between the award of a large water-infrastructure contract and the formal start of construction. In this case, Wabag said the contract had been executed by the company but was still awaiting the customer’s counter-signature and formal commencement of the project when the tender was cancelled.
For desalination projects, such procurement decisions have direct implications for water-supply planning because the facilities are intended to add treated seawater to a region’s available supply. However, the supplied statement does not specify the Yanbu plant’s proposed service area, financing structure, planned technology, offtake arrangements or the expected effect of the cancellation on local water availability.
The project’s cancellation also leaves unresolved whether the tender participants will receive further clarification through the Etimad platform or direct communication from the Saudi Water Authority. Wabag said its immediate step is to engage with the customer and assess the reasons for the cancellation and the company’s subsequent options.
