economics of seawater ro desalination in the red sea region

Desalination 153 (2002) 335–347

0011-9164/02/$– See front matter © 2002 Elsevier Science B.V. All rights reserved

Presented at the EuroMed 2002 conference on Desalination Strategies in South Mediterranean Countries:Cooperation between Mediterranean Countries of Europe and the Southern Rim of the Mediterranean.Sponsored by the European Desalination Society and Alexandria University Desalination Studies and TechnologyCenter, Sharm El Sheikh, Egypt, May 4–6, 2002.

*Corresponding author.

Economics of seawater RO desalination in the Red Sea region,Egypt. Part 1. A case study

Azza Hafeza*, Samir El-Manharawyb

aChemical Engineering and Pilot-Plant Department, National Research Center, Dokki, Giza, Cairo, EgyptTel. +20 (2) 3474822; Fax +20 (2) 3452371; email: [email protected]

bNuclear Geochemistry Department, Nuclear Materials Corporation, Cairo, Egypt

Received 15 January 2002; accepted 15 February 2002

Abstract

Tackling water shortage issues with desalting of seawater and salty water is common in the desert nations of theMiddle East and the Mediterranean. The fast growing development in Egypt has required big movements ofinvestments and people from the Nile Valley towards the east, with the fantastic Red Sea and Sinai coastal zones,and also towards the Western Desert that has promising brackish groundwater potentialities. In both cases, freshwater supply is essential and desalination is a feasible option that can cover the wide gap between the availablecapacities and the accelerating demands. The cost of desalination, either thermal or membrane, is inversely proportionalto the production capacity. This greatly affects the economics of desalination at the modern tourism developmentarea on the Red Sea. The sporadic nature of the tourist hotels and resorts along more than 1500 km of coastal strip,at Sinai and the Red Sea region, favores the small capacity reverse osmosis plants with the range between 200 and3000 m3/d. The higher RO plant capacities (>3000 m3/d) are fewer and limited to the main towns. The present workoutlined the economic variables and limitations that influence the pure water cost by using the small capacity SWROdesalination plants. The techno-economic study was made to estimate the actual cost of production on real fieldmeasurements. The fixed and operating costs of five selected SWRO plants of 250, 500, 2000, 3500 and 4800 m3/d were evaluated and discussed. It was found that the production cost resulted from small SWRO desalination plantsis much higher than the world cost. The study indicated that the economic larger SWRO desalination capacity(>20,000 m3/d) should be considered during the development strategy and planning of the new tourist projects. Therelated recommendations to the technical, operational and environmental considerations are given in detail.

Keywords: SWRO desalination cost; SWRO economics; Capital cost, O&M cost; Production cost

336 A. Hafez, S. El-Manharawy / Desalination 153 (2002) 335–347

1. Introduction

The fast growing development in Egypt hasrequired big movements of investments and peoplefrom the Nile Valley towards the east, with thefantastic Red Sea and Sinai coastal zones, and alsotowards the Western Desert that has promisingbrackish groundwater potentialities. In both cases,fresh water supply is essential and desalination isa feasible option that can cover the wide gapbetween the available capacities and the accele-rating demands. The national privatization strategyallowed the private tourism sector to secure its purewater needs independently wherever it is possible.The Egyptian government encourages this trendby offering generous tax reduction for the relevantimported plants and equipment. The geographicallocations of the Red Sea natural scenarios con-trolled the distribution of the hotels, villages andresorts in a sporadic pattern over the long coastline,which spreads along about 1500 km. The actualwater need of these scattered projects is typicallyless than 1000 m3/d in most individual cases, andless than 5000 m3/d in other fewer cases wheresome clusters are found. This situation favors thesmall size RO plants normally ranging between200 and 3000 m3/d. The higher RO plant capacities(>3000 m3/d) are limited to the main towns.Accordingly, the techno-economic investigationof such limited capacity SWRO plants is mandated.

The present work deals with the economicevaluation and limitation of the small size SWROplants, which are widely used in the new tourism

development areas at South Sinai and the Red Seacoast. All cost estimations are based on the pre-vailing prices in December 2001 and with theexchange rate of about 4 Egyptian Pound (EP)for US$1.

2. Situation analysis

2.1. Fresh water demand

The tourism development is fast growing alongthe Red Sea and South Sinai. The number of touristprojects jumped from less than 50 projects in 1980to around 630 projects at the end of 2001 [1]. Therelated desalination capacity (thermal and RO)increased from less than 20,000 m3/d to about140,000 m3/d in the same period.

The field statistical assessment of desalinationcapacity in the investigated areas is not coveredin the present study. There is no recent officialinformation about this subject. Abu Rayan et al. [2]published the results of the field survey about thewater supply and desalination option for SouthSinai up to the year 2000. However, through alimited field survey and personal communicationswith some key personnel in the local authoritiesit was possible to get some basic information aboutthe existing desalination capacities (thermal andRO) and possible water shortage (m3/d) in the year2020, as given in Table 1. It should be noted thatthe present assessment is based on more or lessrough estimations.

The given figures reflect the water demand for

Table 1Assessment of fresh water demand and desalination capacity (m3/d) in the Red Sea and South Sinai

Year 2001 2020

Fresh water source Red Sea coast, m

3/d

South Sinai, m

3/d

Red Sea coast, m

3/d

South Sinai, m

3/d

Nile water pipe-lines 80,000 0 140,000 30,000 Fresh ground water 0 10,000 0 25,000 Seawater desalination 97,000 40,000 [2]

250,000 150,000

Estimated demand 500,000 125,000 1,000,000 600,000 Water shortage, m

3/d 323,000 75,000 610,000 395,000

A. Hafez, S. El-Manharawy / Desalination 153 (2002) 335–347 337

the tourism sector as well as for the local domesticuses. The Nile fresh water sources (80,000 m3/d)of the Red Sea coast refer to the three pipelinestransferring Nile water to the Red Sea coastincluding two old lines, of 10,000 m3/d each, anda new line of 60,000-m3/d capacity. During thenext 10 years, it is expected to establish the fourthline with additional 60,000 m3/d. For South Sinai,it is expected to establish a 30,000-m3/d pipeline,from Suez to El-Tour, in the near future. Also, itwill be possible to develop some additional freshgroundwater resources. Up to the date, the freshgroundwater is almost absent in the Red Searegion. The future transfer of additional Nile wateris quite limited because it is a very expensiveoperation to cross the eastern desert mountains,this in addition to the expected shortage of theNile water resources. It is clear from Table 1 thatthe gap between the demand and the availablefresh water is widening, and the estimated watershortage in 2020 will be around 1 million m3/d. Asa result, the desalination of the Red Sea water,either surface or related groundwater, is the onlyoption.

2.2. Technical indicators

The following information is based on the fieldsurvey, investigation and measurements on morethan 30 RO plants distributed in the Red Sea andSouth Sinai regions. A number of 5 cases (250, 500,2000, 3500 and 4800 m3/d) were selected fordetailed economic analysis. The provided pricesand costs were collected carefully from the originaldocuments. The given chemical information basedon the authors’ works published during the last 3years on the same locations [3–5]. Other commercialinformation was personally collected from manyrecent local and international reliable sources inEgypt, Saudi Arabia, Kuwait, Emirates andCyprus. The major techno-economic factors thathave a dominant effect on the cost of SWROdesalination per unit of fresh water produced aregiven below.

2.2.1. Feed water salinity

The Red Sea surface water (RSSW) acquiresanomalous chemical composition as comparedwith the standard mean oceanic water (SMOW).The total dissolved solids (TDS) of the RSSWranges between 42,500 and 44,500 mg/l, while thatof normal seawater is typically around 35,500 mg/l.The difference in TDS is not contributed to theevaporation effect — as in the Arabian Gulf — butis related to the effect of the active rifting tectonicsthat release huge amounts of hot brine and saltdeposits in the middle bottom of the sea. The relativemolar ratio (SO4/alkalinity) of the Red Sea water(14.308) is higher than that of the Mediterranean(11.381) and the Gulf (11.964). In addition, theRed Sea water has exceptionally high molar ratio(Mg/Cl = 0.193), which is twice that of the GulfSea (0.099). Therefore, the sulfate scaling potentialis quite high in the Red Sea surface water.

On the other hand, the Red Sea related under-ground water is generally higher in salinity. This isdue to the dominating underneath salt and evaporateformations. The salinity between 50,000 and60,000 mg/l is normally expected at depths morethan 30 m. At such highly salty groundwater, themolar ratio (SO4/alk.) may reach 25 and even more.It is important to mention here that more than 80%of the existing RO plants depend on the high saltygroundwater as feedwater. This is because the RedSea surface water is rich in biota and suspendedmatters with possible oil and grease, which requirerelatively expensive pretreatment that cannot becovered with the small SWRO plant capital. Onthe other hand, the brine disposal resulting frommembrane separation, could have a serious negativeimpact on the environment. The current practicein the studied region is to drill the disposal wellsat a depth of about 60 m and apart from the feedingwells (~30 m depth) with about 50 m. Because ofthe limited budget of these small SWRO plants,this operation is systematically executed regard-less the suitability of geological formation. Inseveral recorded cases the salinity of feed wells


increased considerably after less than 1 year fromthe start up as a result of improper brine disposal.

2.2.2. Energy cost

The specific chemical characteristics of theRed Sea surface water, and the related highlysalted groundwater as well, impose additional loadon the RO desalination energy cost. Theoretically,the required applied pressure necessary to over-come the natural osmotic pressure is about0.78 bar/1000 mg/l of salt concentration. Thatmeans that the membrane separation processcould run at +10% of osmotic pressure. In thepresent case, the net driving pressure needed atsteady operation to overcome reversal osmoticpressure and resultant concentration polarizationis typically between 1.25 and 1.35 bar/1000 mgTDS/liter. The field measurements indicatedhigher power requirements than expected in normalseawater cases. In most cases the total energyconsumption rate (including intake, pretreatment,RO, posttreatment and disposal) is around10 kWh/m3, which is about 1.8 of the rate used innormal seawater.

There are two sources of electrical energy usedin SWRO desalination, the first is the nationalelectrical network, and the second is privatelygenerated by diesel generators. The price ofnational electrical energy is EP 0.24/kWh (2001),while the cost of generated electricity is aboutEP 0.28/kWh.

2.2.3. Economies of the production size

The prices of the SWRO desalination plantshad lowered effectively during the last twodecades. As a guide, the purchase price rate fellfrom about US$ 1300/m3 in the year 1990 to lessthan US$ 700/m3 in 2001. The FOB price of oneSW spiral wound 8" element ranges nowadaysbetween ~US$ 700 and ~US$ 900, depending onquantity and plant size. Similarly, the prices ofthe high-pressure vessels range from ~US$ 300and ~500 per 1 m length. On the other hand, theprices of mechanical pumps and monitoring

equipment are increasing slowly (< 5%/y). All ofthese indicators are critically subjected to plantsize [6]. As described before, most of the installedSWRO plants in the region are less than 5000 m3/d,which are classified as small plants. Consequently,the purchase prices, transportation, installationand O&M cost will be higher than for the mediumSWRO plants (i.e. 10,000–50,000 m3/d) and thelarger plants (i.e. >50,000 m3/d).

2.3. SWRO project execution types

The desalination of seawater is mostly carriedout by the private sector, i.e. tourism foundationsand water companies. Recently, many productionprojects and contracts have been executed for thebenefits of both. There are four project/contracttypes in the region of the study.

2.3.1. Investor’s property (IP) type

Where the investor owns the whole project andpays for everything including operation and main-tenance. At the beginning of tourism developmentall projects executed according to this type.Afterwards, it turned mostly to other contractingtypes.

2.3.2. Operation and maintenance (O&M)contract type

In this contract type the investor transfers theO&M job to the contractor who supplies andinstalls the RO plant and pays him for this job.The contract includes, in addition, the supply ofchemicals, spare parts and membrane replacementaccording the cost plus system.

2.3.3. Build Own Operate Transfer (BOOT)contract type

The investor provides the necessary space withor without electrical energy. On the other hand,the contractor carries out the whole RO projectincluding intake, building, supply, installation,treatment, brine disposal, operation and maintenancefor the preagreed contract period (10–30 years).


The investor is committed to purchase the totalamount of produced fresh water according to anaccelerating price schedule along the contracttime. At the end of the contract the whole projectis transferred back to the investor.

2.3.4. Build Own Operate (BOO) contract type

It is simply an independent water productionproject inside the tourist project. The investor offersthe land basically with or without electricity,intake, building, disposal and infrastructure. Onthe other side, the contractor (or the water company)is committed to cover the investor’s water needagainst special reduced price for a pre-agreed waterquantity, but without consumption limitation.Usually, the water company bases its strategy ona higher production scheme, which allows sellingexcess water for others at higher prices. The durationof the BOO contract is usually determined by thewater company and not by the investor.

The field investigation indicated that the BOOcontract is successful in most cases, as it does notload the investor with fixed water consumption,it is only limited for the discounted prices. It isworth to mention here that some of the BOOprojects were established outside the tourismfirms according to special arrangements with thelocal authorities in order to supply the sur-roundings with fresh water at pre-agreed prices.Generally, the government provides the projectwith land, basic infrastructure and tax exemptions.Generally, the BOO contract type is dominatingover others. Roughly estimated, about 65% of theexisting RO plants apply the BOO contract typeunder different detailed technical conditions, andthis attitude is increasing rapidly all over the RedSea and South Sinai. Many big water companiesare preparing to enter this field in the near future,considering that the local domestic water demandis accelerating with the tourism development rate.

2.4. Data normalization

The normalization of collected data is essentialfor the comparison and analysis of RO plants.

There are too many variables controlling eachindividual case, for example, location, date offoundation, feed water salinity, water turbidity,contract type, terms of contract, plant size, requiredarea, installation requirement, building cost,infrastructure cost, import cost, exchange rate,intake system (surface or well), pretreatment, typeof membrane system (hollow fiber or spiralwound), product recovery rate and disposal system.

In the present study it was possible to normalizethe collected data to the effective prevailing situationin December 2001 through the acknowledgedassistance of investors, local contractors andcommercial dealers. Some other variables wereestimated, like the real cost of the BOOT and BOOcontract projects. In fact, their costs do not representthe real cost if other factors were neglected, suchas land, power and related infrastructure. Therefore,it had been decided to evaluate each of the selectedfive cases twice, as an exclusive investor’s property(IP) and as BOO contract type after deleting therelated items (i.e. land, power, intake, building,infrastructure, insurance cost, and brine disposal).

3. Cost estimation of the SWRO desalination

A number of 5 SWRO desalination plants wereselected from the area of study. Three SWROplants with production capacities 250, 500 and4800 m3/d were selected from the Red Sea coastat Hurgada and Safaga. The other two cases wereselected from El-Tor and Sharm El-Sheikh inSouth Sinai with production capacities 2000 and3500 m3/d. The first two cases (case 1 — 250 m3/dand case 2 — 500 m3/d) are operating accordingto the O&M contract type, and the second two cases(case 3 — 2000 m3/d and case 4 — 3500 m3/d) arerunning under the BOO contract conditions, thelast case (case 5 — 4800 m3/d) is a BOOT type.The details of similar contract type are differentfrom case to case; however, all data had normalizedto the IP and BOO contracting conditions thencompared with the actual collected data. The basictechnical information about the investigated casesis presented in Table 2.


3.1. Cost estimation on the IP type basis

In this estimation model the tourism project,including seawater desalination, belongs totallyto the investor who operates and maintains thewhole project. In such a way, the real estimationof pure water cost becomes possible and all itemscould be considered easily. Many design and eco-nomic factors affect the costs of a SWRO desali-nation plant. The basic design technical factorsinclude: seawater characteristics such as feedwaterTDS, temperature, turbidity, heavy metals (Fe,Mn, Ba and St), product water specifications,membrane performance characteristics (initial andover time), single or two stage performance,operating pressure, recovery rate, pretreatment,pH adjustment, antiscalants requirement, energyrecovery, posttreatment and brine disposal. Theannualized cost expenses (ACE) for productionof fresh water per year is simply based on thesum of the fixed capital cost depreciation rate(FCCDR) per year and the annual operation andmaintenance (O&M) cost . The FCCDR is estimatedfrom the sum of individual capital items costs (thegrand capital cost) divided by the effective lifeperiod (in years). In the case of new projects, thegrand capital cost usually compromises severalcomplicated major, minor and hidden items;

Table 2Basic information of the selected SWRO desalination plants

Basic information Case 1 Case 2 Case 3 Case 4 Case 5

Location Hurgada Safaga El-Tor Sharm Hurgada Plant production, m

3/d 250 500 2,000 3,500 4,800

Capital cost, US$/m3 2,166 2,095 1,714 1,685 1,363

Total capital cost, US$ 541,500 1,047,500 3,428,000 5,897,500 6,542,400 Intake type Well Well Well Well Surface Feed water TDS, mg/l 47,000 49,000 47,000 43,000 43,000 Feed water quantity, m

3/d 500 1,750 7,000 12,250 16,800

Number of RO membrane units 1 1 2 7 4 Number of vessels/units 10 6 14 6 20 Number of RO elements per vessel 2 7 7 7 6 RO membrane type B-10 FilmTec FilmTec FilmTec Fluid Total number of RO elements 20 42 196 294 480 Pure water recovery, % 45 30 30 30 30

however, in the present study a short list has beenselected for the already existing cases that includesthe following individual items which are consideredin calculations of the fixed capital cost:

Raw water intake system Fresh water storageIntake pipeline Disposal deep wellsRaw water storage LandPretreatment BuildingMedia filtration Site workMicro filtration DistributionLow-pressure pumps LaboratoryHigh-pressure pumps Engineering servicesMembrane system PermittingEnergy recovery units Legal servicesPost-treatment Capitalized interestDisposal pumps FinancingDisposal pipeline Insurance

The annual O&M cost is the sum of individualannual costs necessary for operation of the SWROplant, which includes replacement, repair andspare parts. The following simplified list has beenconsidered for the estimation of the annual currentexpenses ACE:

Electrical energy RepairingLand lease Labor


Pretreatment chemicals Laboratory servicesMembrane replacement General servicesPost-treatment chamicals Selling tax

Table 3 presents the itemized capital costs (inUS$, 2001) of the selected SWRO desalinationplants, after normalized to the IP project type onDecember 2001 basis, of the selected SWROplants as obtained from the project’s documents.The given data are based on the purchase priceplus the cost of installation in site. The comparisonshows that the fixed capital cost is inversely pro-portional to the plant size, while the capital costper m3 is inversely proportional to the total capitalcost of the RO plant. The statistical analysisindicated the following:• The cost of intake system varies from 17 to

33% (mean = 26.24%) of the grand total cost.• The cost of pretreatment phase varies from 9

to 12% (mean = 11.20%) of the grand total cost.• The cost of RO phase varies from 20 to 26%

(mean = 23.04%) of the grand total cost.• The cost of posttreatment phase varies from

0.1 to 0.5% (mean = 0.22%) of the grand totalcost.

• The cost of brine disposal phase varies from 4to 5% (mean = 4.38%) of the grand total cost.

• The cost of infrastructure phase varies from26 to 35% (mean = 29.06%) of the grand totalcost.

• The cost of prof. and financing varies from 5to 7% (mean = 5.86%) of the grand total cost.

• The capital unit cost necessary for the productionof 1 m3 of pure water from seawater is inverselyproportional to the plant size. For the smallestSWRO desalination plant (250 m3/d) the capitalunit cost is US$ 2166/m3, while it is equal toUS$ 1363/m3 in the 4800 m3-plant case.

Table 4 shows the annualized cost expenses(ACE) for the production of m3/y of fresh water(in US$, 2001), after normalized to the IP projecttype for the selected SWRO desalination plants.The FCCDR is based on the effective life periodof mechanical equipment, which is normally

estimated as 10 years. This life period covers thecomponents of the intake system, pretreatment,RO low and high-pressure pumps, posttreatment,brine disposal pumps and the professional andfinancing costs as well. The effective life period(10 years) of the RO membrane elements is basedon the annual replacement rate of 10%. The buildingand civil infrastructure lifetime depreciates in aperiod of 40 years as usual.

The annual O&M cost have been deriveddirectly from the contractors who are supervisingthe plant operation. Several important economicindicators were obtained as follows:• The annual depreciation cost varies from 18

to 23% (mean = 20%) of the ACE.• The annual O&M cost varies from 77 to 82%

(mean = 80%) of the ACE.• The annual electrical energy cost varies from

33 to 37% (mean = 34.66%) of the ACE.• The pre- and post-treatment chemical cost

varies from 4.8 to 5.3% (mean = 5%) of the ACE.• The annual RO replacement cost varies from

8.4 to 9.3% (mean = 8.77%) of the ACE.• The annual labor cost varies from 5.8 to 7.7%

(mean = 7.17%) of the ACE.• The annual operating and maintenance cost,

as well as the annual depreciation cost, aredirectly proportional to the plant size.At the bottom of Table 4 the production cost

of 1 m3/d pure water was calculated, in addition,the actual market selling water price (December2001) was given for each case individually. Thefollowing two indicators could be noticed:The SWRO desalination production cost of pure

water is inversely proportional to plantcapacity.

The estimated cost is US$ 2.70/m3 for case 1 (250m3/d), US$ 2.46/m3 for case 2 (500 m3/d), US$1.85/m3 for case 3 (2000 m3/d), US$ 1.72/m3

for case 4 (3500 m3/d) and US$ 1.28/m3 forcase 5 (4800 m3/d).The obtained production cost of pure water is

much higher than the world cost which is typicallylower than US$ 1 for larger SWRO desalination


Table 3The itemized capital costs (in US$, 2001) of the selected SWRO desalination plants, based on the IP project type

Capital item Case 1 Case 2 Case 3 Case 4 Case 5

1) Intake system Well Well Well Well Surface Cost of intake group 180,320 331,010 870,712 1,403,605 1,118,750

2) Pretreatment phase Cost of Settling equipment 19,633 50,925 166,656 286,713 318,065 Cost of dosing equipment 6,052 15,698 51,372 88,380 98,044 Cost of media filtration 9,292 24,103 78,878 135,701 150,541 Cost of microfiltration 6,385 16,563 54,204 93,251 103,448 Cost of testing equipment 6,290 16,316 53,395 91,859 101,904 Subtotal 47,652 123,605 404,504 695,905 772,003

3) RO desalination phase Cost of RO membranes and vessels 36,366 64,495 300,978 451,466 737,088 Cost of centrifugal pumps 8,772 12,394 43,542 87,908 93,726 Cost of high pressure pumps 20,225 47,653 120,868 244,021 260,172 Cost of energy recovery units 8,285 14,531 51,050 103,065 109,886 Cost of steel structure 14,377 19,873 34,534 69,720 74,335 Cost of St. St. pipes and valves 19,436 29,528 146,459 451,865 226,032 Cost of monitoring equipment 12,062 21,155 47,296 95,486 101,806 Cost of other subsides 2,315 4,060 6,006 12,125 12,928 Subtotal 121,838 213,690 750,732 1,515,658 1,615,973

4) Post-treatment Cost of ph adjustment 1,186 1,285 1,501 2,583 2,866 Cost of chlorination 1,522 1,648 1,927 3,314 3,677 Sub-total 2,708 2,933 3,428 5,898 6,542

5) Brine disposal Cost of disposal pump station 7,011 15,650 51,214 88,109 97,743 Cost of disposal pipeline 4,524 10,229 33,474 57,589 63,887 Cost of deep wells 9,524 21,259 69,571 119,690 132,778 Sub-total 21,119 47,138 154,260 265,388 294,408

6) Infra-structure Cost of land 48,194 93,228 305,092 524,878 582,274 Cost of building 12,996 25,140 82,272 141,540 157,018 Cost of site work 3,249 6,285 20,568 35,385 39,254 Cost of distribution 126,711 245,115 802,152 1,380,015 1,530,922 Subtotal 141,332 277,797 1,021,544 1,627,710 2,309,467

7) Professional and financing Engineering cost 13,538 26,188 85,700 147,438 163,560 Legal cost 5,957 11,523 37,708 64,873 71,966 Financial and interest cost 2,708 5,238 17,140 29,488 32,712 Insurance and sales tax 12,996 25,140 82,272 141,540 157,018 Subtotal 26,534 51,328 222,820 383,338 425,256

Grand total 541,500 1,047,500 3,428,000 5,897,500 6,542,400

Capital unit cost, US$/m3 2166 2095 1714 1685 1363


Table 4The annualized cost expenses for production of fresh water per year (in US$, 2001), of the selected SWRO desalination plantsbased on the IP project type

Case 1 Case 2 Case 3 Case 4 Case 5

Plant capacity, m3/d 250 500 2000 3500 4800

A) Annual depreciation, US$ Intake system (10 years) 18,032 33,101 87,071 140,361 145,896 Pretreatment phase (10 years) 4,765 12,361 40,450 69,591 77,200 RO desalination phase (10 years) 12,184 21,369 75,073 151,566 161,597 Post-treatment (10 years) 271 293 343 590 654 Brine disposal (10 years) 2,112 4,714 15,426 26,539 29,441 Infra-structure (40 years) 3,533 6,945 25,539 40,693 49,232 Professional and financing (10 years) 2,653 5,133 22,282 38,334 42,526 Sub-total 43,550 83,915 266,184 467,672 506,545

B) Annual O&M cost Cost of pretreatment chemicals 4,050 7,297 21,734 34,677 38,993 Cost of RO replacement membranes 21,670 39,038 116,274 185,524 208,611 Cost of post-treatment chemicals 8,303 14,959 44,554 71,088 79,935 Cost of brine disposal 3,240 5,838 17,387 27,742 31,194 Cost of power 85,666 154,329 459,664 733,425 824,696 Cost of repair and replacement (55.8%) 44,412 80,008 238,302 380,226 306,787 Cost of labor (23.7%) 18,863 33,982 101,214 161,494 130,302 Cost of lease land ( 0% ) 0 0 0 0 0 Cost of insurance (20.5%) 16,316 29,394 87,548 139,689 112,708

Annualized O&M cost 202,521 364,844 1,086,676 1,733,865 1,733,226

Annual depreciation + O&M per year 246,071 448,759 1,352,860 2,201,537 2,239,771 Annual depreciation + O&M per day 674 1,229 3,706 6,032 6,136 Production cost, US$/m

3 2.70 2.46 1.85 1.72 1.28

Production cost, EP/m3 10.79 9.84 7.41 6.89 5.11

Selling price, US$/m3 None None 2.13 1.88 1.75

Selling price, EP/m3 None None 8.50 7.50 7.00

plants [7]. This situation has mainly arisen fromthe relatively high fixed capital and O&M costsagainst the limited production size.

3.2. Cost estimation on the BOO contract typebasis

In this model we will consider that the investorprovides the water company with the followingfacilities: land, building, infrastructure, electricalenergy, feed intake system and the brine disposalsystem. On the other hand, the water companyresponsibile for of the supply, erection, operatiionand maintainance of the integrated SWROdesalination plant.

Table 5 presents the ACE for production offresh water per year (in US$, 2001), of the selectedSWRO desalination plants on the basis of BOOcontract type after deleting the investor’s provideditems. The following indicators could be men-tioned:

• The annual depreciation cost varies from 22to 25% (mean = 23.36%) of the ACE.

• The annual O&M cost varies from 75 to 78%(mean = 76.64%) of the ACE.

• The pre- and post-treatment chemicals cost variesfrom 52 to 55% (mean = 53.36%) of the ACE.

• The annual RO replacement cost varies from9.5 to 9.9% (mean = 9.7%) of the ACE.


• The annual labor cost varies from 8.3 to 8.7%(mean = 8.49%) of the ACE.

• The daily SWRO desalination production costof pure water is inversely proportional to theplant capacity. The estimated daily BOO cost isUS$ 2.23/m3 for case 1 (250 m3/d), US$ 1.91/m3

for case 2 (500 m3/d), US$ 1.53/m3 for case 3(2000 m3/d), US$ 1.43/m3 for case 4 (3500 m3/d)and US$ 1.14/m3 for case 5 (4800 m3/d).

4. Discussion

The statistical analysis indicated that the fixedBOO-cost/m3 of pure water is lower than that ofIP cost with 11% in case 5 to 22% in case 1(mean = 16.97%). This reflects the contributionof the depreciation of the fixed capital on theproduction cost; i.e. the fixed capital depreciationis inversely proportional to the plant daily capacity.This amount of difference between the IP and

Table 5The annualized cost expenses for production of fresh water per year (in US$, 2001), of the selected SWRO desalination plantson the basis of BOO contract type

Case 1 Case 2 Case 3 Case 4 Case 5

Plant capacity, m3/d 250 500 2000 3500 4800

A) Annual depreciation, US$ Pretreatment phase (10 years) 4,765 12,361 40,450 69,591 77,200 RO membrane phase (10 years) 12,184 21,369 75,073 151,566 161,597 Post-treatment phase (10 years) 271 293 343 590 654 Cost of financing 26,582 45,445 146,151 238,725 263,848 Subtotal 43,802 79,468 262,017 460,472 478,903

B) Annual O&M cost, US$ Cost of pretreatment chemicals 101,261 170,219 543,338 866,933 961,733 Cost of RO replacement membranes 20,252 34,044 108,668 173,387 192,347 Cost of post-treatment chemicals 10,126 17,022 54,334 86,693 96,173 Cost of repair and replacement 10,632 17,873 57,050 91,028 100,982 Cost of labor 17,721 29,788 95,084 151,713 168,303 Subtotal 159,992 268,946 858,474 1,369,754 1,519,538

Total annual depreciation and O&M 203,794 348,414 1,120,491 1,830,226 1,998,441

C) Daily production cost per m3 of pure water, in US$ and Egyptian Pound (December 2001)

Daily production cost, US$/m3 2.23 1.91 1.53 1.43 1.14

Daily production cost, EP/m3 8.93 7.64 6.14 5.73 4.56

Daily selling price, EP/m3 None None 6–8 6–7 6–7

BOO types persuades the project owner to acceptthe BOO contract to carry over the capital risk aswell as the daily problems arisen from the operationand maintenance.

The main problem in the investigated cases isthat the daily production cost is considerablyhigher than the worldwide cost, which is normallyaround, or even lower than, US$ 1/m3.d. Thissituation is negatively reflected on the tourismeconomics and the surrounding domestic activitiesas well.

Fig. 1 presents the relationship between theSWRO plant daily capacity (m3/d) and thedesalination cost (in US$/m3, December 2001) ofsome 12 selected SWRO desalination plants withdifferent capacities as estimated on the IP-projecttype basis. Fig. 2 demonstrates the relationshipbetween these selected SWRO plants with theestimated capital unit cost (US$/m3). The first fivecolumns represent the studied cases, while the


other 7 cases have been collected directly fromtheir original sources through field visits, personalcommunications, and some trustable commercialdealers of international SWRO desalination com-panies. These cases are located on the Mediterra-nean Sea (TDS~40,500 mg/l) and the Red Sea(TDS~43,000 mg/l). The last two columns wereestimated from the field data that personallyobtained during the visit of the Dhekelia [8](40,000 m3/d, 1997) and Larnaca [9] (54,000 m3/d,2001) SWRO desalination plants in Cyprus onMay 2001. Both plants are operating under theBOOT contract type where the electrical energyis supplied by the Cyprus government. The

2.70

2.46

1.851.72

1.281.21 1.18 1.15 1.04

0.860.890.93

0.00

0.50

1.00

1.50

2.00

2.50

3.00

250 500 2000 3500 4800 7000 10000 15000 20000 30000 40000 50000

Plant capacity, m3/d

Pro

duct

ion c

ost

, U

S$/m

3 (

Dec.

2001)

Fig. 1. The relationship between the SWRO plant capacity and the production cost.

21662095

1714 1685

1363

1131

962904

832

667713788

0

500

1000

1500

2000

2500

250 500 2000 3500 4800 7000 10000 15000 20000 30000 40000 50000

Plant capacity, m3/d

Pro

duct

ion c

ost

, U

S$/m

3 (

Dec.

2001)

Fig. 2. The relationship between the SWRO plant capacity and the capital unit cost.

production cost was approximately estimatedaccording to the IP model.

The purpose of this field survey is to acquirethe most recent data (during years 2000 and 2001)that are not available yet for publishing. Somedeviations are expected due to the variation inraw water salinity and the project local conditions,therefore, the given figures are provided for eco-nomic guidance and correlation purposes.

It is clear from Fig. 1 that the small size SWROplants are quite costly in either capital expensesor operation and maintenance daily cost. Theproduction cost could be higher than 270% theworldwide cost (<US$ 1/m3). This is attributed


to many factors mentioned earlier, in addition tothe lack of suitable laboratory facilities andcompetent personnel necessary for quality controland for solving the related scaling problems.

The correlation shows that the suitable SWROplant size that approaches the US$ 1/m3 levelshould be of 20,000 m3/d capacity and higher. Thebigger capacities are much more attractive indeed,where the production cost at the 50,000 m3/d fallsto US$ 0.86/m3 (~EP 3/m3) which is about 50%of the local prevailing cost.

It is worth to mention here that the SWROdesalination on larger scale could be cheaper thantransportation of natural potable water. TheAshkelon SWRO desalination plant [10], southof Tel Aviv, Israel, is under construction by theVivendi-IDE-Dankner group, and to be finishedin 2004. This plant will desalinate about 165,000 m3/dwith a BOT selling price of US$ 0.527/m3. Thereasons behind this low price are that the Israeligovernment have guaranteed to buy the desalinatedwater for 25 years, and will supply the projectwith relatively cheaper electricity. The price ofthis desalted water is lower than the cost ofmarginal water from the national grid, and by farmuch lower than the price of water to be importedfrom Turkey (US$ 0.75/m³).

In Egypt, the increasing water demand in thenear future (~1 Mm3/d for the Red Sea region by2020) is inviting similar big SWRO desalinationprojects and even of higher capacities. The costof electrical energy (~40% of the ACE) is a criticaleconomic factor affecting the production cost. Thewide availability of natural gas on the Mediter-ranean offshore near locations could support theeconomic generation of local cheaper electricity.In addition, the modern trends of nuclear electricitygeneration are providing safe and economic sub-stitution for long term low-cost energy [11],considering that the local natural reserve ofnuclear materials is satisfactory and could bedeveloped considerably. The central government,local authorities, tourism firms and water companiesfor the good of all parties should handle thistechno-economic situation carefully.

5. Conclusions and recommendations

1. The Red Sea RO desalination cost dependsmainly on the plant size. The production of 1 m3

of pure water by a 250-m3/d RO plant costs US$2.7/m3.d (= EP 10.8/m3.d), while this cost decreasedto US$ 1.28 at the 4800-m3/d RO plant.

2. The energy consumption rate could reach~11 kWh/m3 for the smallest RO planttsanddecreases to ~8 kw.h/m3 for the bigger plants.

3. In both project types (i.e. IP and BOO) theproduction cost is higher than the current worldcost (<US$ 1/m3.d).

4. When comparing the obtained cost indi-cators with the known world figures of larger plantsizes it was found that the constituting shares aregreatly different, for example, the RO phase costsfrom 20 to 26% of the total fixed capital cost inthe small RO plants, while this percentage isnormally around 40% in the larger RO plants.

5. The statistical correlation indicated that thecost level of US$ 1/m3 could be achieved by a20,000-m3/d RO plant capacity. The biggerSWRO plants will be further economic too.

6. It is recommended to reconsider the individualinstallation of the costly small SWRO plants.

7. It is recommended to rearrange the tourismdevelopment strategy, and regional planning as well,in order to accommodate the economic high capa-city SWRO desalination plants (>20,000 m3/d)that can serve surrounding tourism foundationsand urban needs economically.

8. It is recommended to avoid the highly saltygroundwater (TDS >50,000 mg/l) by using thesurface intake (TDS ~43,000 mg/l) instead. Themodern chemical pretreatment [12], microfiltrationand nanofiltration [13] systems are able to removethe undesired matters, and hardness as well,effectively. The bigger SWRO plants can affordsuch facilities economically.

9. It is recommended to study and investigatethe brine disposal into the suitable deep geologicalformation. An experienced hydrogeologist shouldsupervise the drilling operation in order to avoidthe excessive salt leak and keep environmental


contamination to minimum. A chemical monitoringprogram is advised.

References[1] Egyptian Ministry of Tourism, The Year Book 2001,

Cairo.[2] M. Abou Rayan, B. Djebedjian and I. Khaled, Water

supply and demand and desalination option for Sinai,Egypt, Desalination, 136 (2001) 73–81.

[3] S. El-Manharawy and A. Hafez, Molar ratios as auseful tool for prediction of scaling potential insideRO system, Desalination, 136 (2000) 243–254.

[4] S. El-Manharawy and A. Hafez, Technical manage-ment of RO system, Desalination, 131 (2000) 173–188.

[5] S. El-Manharawy and A. Hafez, Water type andguidelines for RO system design, Desalination, 139(2001) 97–113.

[6] T. Winter et al., The Economics of Desalination andits Potential Application in Australia, SEA WorkingPapers UWA251, 01–02, Australia.

[7] W. Owens and K. Brunsdale, Solving the problemsof fresh water scarcity, Desalination and Water Reuse,9(4) (2000).

[8] O. Sallangos and E. Kantilaftis, Operating experienceof the Dhekelia seawater desalination plant, Desali-nation, 139 (2001) 115–123.

[9] M. Faigon, Process control of Larnaca seawater ROplant, Desalination, 138 (2001) 297–298.

[10] Global Water Intelligence: Ashkelon DesalinationPlant, Price Down to Low Cost, 2001.

[11] J. Humphries and K. Davies, A floating desalination/cogeneration system using the KLT-40 reactor andCanadian RO desalination technology, IAEA-TECDOC-1172, Vienna, 2001.

[12] S. El-Manharawy and A. Hafez, Study of seawateralkalization as a promising RO pretreatment method,Sharm El-Sheikh, Egypt, Desalination, (2002), inpress.

[13] A.M. Hassan, A.M. Farooque, A.T.M. Jamaluddin,A.S. Al-Amoudi, M. AK Al-Sofi, A.F. Al-Rubaian,N.M. Kither, I.A.R. Al-Tisan and A. Rowaili, Ademonstration plant based on the new NF-SWROprocess, Desalination, 131 (2000) 157–171.

economics of seawater ro desalination in the red sea region

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