Dubai Municipality has selected preferred bidders for the first two packages of its AED80 billion ($22 billion) Dubai Strategic Sewerage Tunnels (DSST) project, reported MEED citing sources familiar with the matter.

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 200km 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.

The consortium's engineering, procurement and construction (EPC) team includes China's China Civil Engineering Construction Corporation, 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, according to sources. The package is estimated to cost less than $2 billion, stated the report.

A construction team comprising China State Construction Engineering Corporation and UAE-based DeTech Contracting is expected to undertake EPC works for the package, one 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, reported MEED.

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 2 Links, was tendered in January and bids are due by June 30. At least two consortiums are preparing submissions.

One group is led by Etihad Water & Electricity and includes China Civil Engineering Construction Corporation, National Marine Dredging Company and China Railway Construction Corporation 11th Bureau Group as EPC contractors, with Veolia expected to act as operator, stated the MEED report.

A second consortium is expected to be led by Plenary Group, while China State Construction Engineering Corporation and DeTech Contracting are also preparing bids for the construction works.

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