Sojitz Quits $1.6 Billion Abu Dhabi Project After Rate DisputeEmi Urabe and Tsuyoshi Inajima
Sojitz Corp., a Japanese trading company, quit a venture bidding to build and operate a $1.6 billion water and power project in the United Arab Emirates after disagreeing with the Abu Dhabi government about tariffs.
The company, which gets about a third of its revenue from energy and minerals, and its partner GDF Suez were in final talks on the project after making the lowest offer among bidders, Senior Managing Executive Officer Yoshio Mogi said in Tokyo today. Sojitz couldn’t reach an agreement with Abu Dhabi on water and electricity prices, he said.
Abu Dhabi Water and Electricity Authority, known as Adwea, received bids from six groups for the Al Mirfa project, it said in a statement in March last year, without identifying companies. The winner will build and operate the 1,600-megawatt and 52.5 million gallon-a-day plant to help the country meet demand for electricity and water, it said at that time.
The Mirfa project would be worth about 162 billion yen ($1.59 billion), the Japanese government said in a report in April last year, adding that “many Japanese companies” are bidding for the project.
Bidders include Electricite de France, Mitsubishi Corp., Marubeni Corp., GDF Suez, Itochu Corp. and Sumitomo Corp., the Al Bayan newspaper reported in March, 2013.