Senegal to Terminate Multi-Million Dollar Water Purification Contract

In Summary

• Senegal plans to terminate a multi-million dollar water purification project contract awarded to a Saudi Arabian company.
• The contract, worth 700 million euros (equivalent to 759 million US dollars), was awarded to Acwa Power Ltd of Saudi Arabia to build and operate a water desalination plant near the capital, Dakar.
• Desalination is the process of removing salt from seawater.
• Senegal is a West African nation with a population of about 18 million and a coastline on the Atlantic Ocean.
• The deal with Acwa Power was signed during Macky Sall's final days as president.
• On Thursday, July 4th, Senegal's Water and Sanitation Minister, Cheikh Tindane Nieye, announced that the project no longer fits the government's strategy options.
• Senegal was supposed to pay the company 33 million US dollars annually for purified water from the plant.

DAKAR, SENEGAL- Senegal plans to terminate a multi-million dollar water purification project contract awarded to a Saudi Arabian company. The contract, worth 700 million euros (equivalent to 759 million US dollars), had been awarded to Acwa Power Ltd of Saudi Arabia to build and operate a water desalination plant near the capital, Dakar.

Desalination is the process of removing salt from seawater. Senegal, a West African nation with a population of about 18 million according to official data accessed by The African Exponent, has a coastline on the Atlantic Ocean.

The nation had signed the deal with Acwa Power during Macky Sall's final days as president. On Thursday, July 4th, Senegal's Water and Sanitation Minister, Cheikh Tindane Nieye, told the media that the project "no longer fits the government's strategy options."

According to the minister, Senegal has therefore decided to terminate the agreement. The minister said that Senegal was supposed to pay the company 33 million US dollars annually for purified water from its plant.

The construction of the facility which was designed to facititate over 400,000 cubic metres of water daily has not yet began, atleast by press time.

The minister further said that; " the price of water risks increasing because of the technology being used.' Mr Dieye Added that Dakar's growing population would result into a demand of increase for purified water. According to the minster, the city would need over 400,000 cubic metres of water daily for its population in the next 3 to 4 years.

Dakar currently as morethan 3.5 million people. The government says its legal advisors are studying the potential consenquences of breaking the contract with Acwa Power.

The Senegalese government is however confident that there will be no major financial losses as the efforts to get out of the legal obligations safetly are underway.

President Basirou Faye who came to power after winning the March 24 elections pledged to review and potentially cancel deals signed by President Sal's Adminstration.

Mining, oil, and gas contracts were some of the agreements Mr Faye promised to revise. The president had accused his predecessor of damaging Senegals sovereignity by leasing state assets cheaply.

In any event, should Acwa Power consider themselves aggrieved by Senegal's decision, it can sue for breach of contract at the International Court for Arbitration or settle the matter out of Court.