Dubai Municipality has selected preferred bidders for the first two packages of its AED80 billion ($22 billion) Dubai Strategic Sewerage Tunnels (DSST) project, said a report.

The public-private partnership (PPP) project comprises three packages – J, W and Links – and includes the construction of deep sewer tunnels connecting to treatment facilities at Warsan and Jebel Ali, as well as more than 200 km of sewer links.

A consortium led by Etihad Water & Electricity, together with Saudi Arabia’s Tamasuk Holding and Alkhorayef Water & Power, has been selected for Package W, which is estimated to require about $3 billion in capital expenditure, reported MEED citing sources familiar with the matter.

The consortium’s EPC team includes China Civil Engineering Construction, Shanghai Tunnel Engineering and China Railway 14th Bureau Group, while France-based Veolia is expected to serve as operator.

For Package J, Dubai Municipality has selected a consortium led by Saudi Arabia’s Vision Invest and France’s Suez Water Company. The package is estimated to cost less than $2 billion. A construction team comprising China State Construction Engineering Corporation and UAE-based DeTech Contracting is expected to undertake EPC works for the package, a senior source said.

The DSST project was previously divided into several contracts under the Warsan Strategic Tunnel Scheme and the Jebel Ali Strategic Sewerage Scheme before being restructured into the current J and W packages and tendered in November, MEED stated.

The overall project value of about $22 billion includes both construction costs and long-term operating expenses over the life of the concessions, sources said.

The third package, known as Phase Two Links, was tendered in January and bids were due by June 30. 

All three packages are being procured under 30-year design, build, finance, operate and maintain concession agreements.