The UAE has started studying bids by international firms for its third and largest independent power project (IPP), to be executed in the emirate of Abu Dhabi at an estimated cost of Dh6 billion ($1.6 billion).

An Abu Dhabi Electricity and Water Authority (Adwea) official told the local Gulf Times newspaper that the bids were opened on March 25. "Bids were opened and the prices were read out. CMS Energy offered the best price, but only slightly," the official was quoted as saying. "We don't expect to finish studying the bids before the end of July."

Shuweihat water and power project will involve construction of a cogeneration plant with 1,500 MW of power generating capacity and 100 million gallons per day (gpd) water as well as associated infrastructure.

Press reports have said the bidders for the project were the US' AES Corporation, the US' PSEG Global with Japan's Marubeni Corporation, Britain's International Power with CMS Energy and Belgium's Tractebel with Mitsui and Company and Tokyo Electric Power Company (Tepco).

Abu Dhabi has already awarded contracts for two IPPs.

In January this year it set up a Dh624 million joint venture with a consortium of France's TotalFinaElf and Tractebel to work on the second project, Taweelah A1. TotalFinaElf and Tractebel last July signed a $1.5 billion contract with Adwea for Taweelah A1 to refurbish the existing 225 MW, 29 million gpd plant and build an extension and operate and maintain it for 20 years.

In 1998, CMS Energy won the contract for the Taweelah A2 power project, the emirate's first independent water and power plant.

The successful bidder will own 40 per cent of the project company and the rest will be held by a special-purpose holding firm to be formed by the Adwea.