Saudi Arabia has canceled a $317 million mega seawater desalination project awarded to India’s VA Tech Wabag just three months ago, the company announced in a regulatory filing to the Bombay Stock Exchange (BSE).
The Saline Water Conversion Corporation (SWCC), the state-run entity overseeing the project, informed all tender participants on December 16 that the tender was canceled due to “internal administrative procedures,” according to the statement from VA Tech Wabag.
The project involved the development of a 300 million liters per day (MLD) seawater reverse osmosis desalination plant on a greenfield site along Saudi Arabia’s Red Sea coast, near Yanbu Al-Bahr.
The scope of work under the Engineering, Procurement, Construction, and Commissioning (EPCC) contract included design, engineering, supply, construction, and commissioning.
The Chennai-based water treatment company said it is engaging with SWCC to understand the rationale behind the decision.
The project, which was to feature advanced desalination technologies with a focus on energy efficiency and environmental compliance, was seen as a key milestone in Saudi Arabia’s ambitious water infrastructure plans.
The news triggered a sharp sell-off in VA Tech Wabag shares, which fell as much as 14% in Wednesday’s trading, closing at ₹1,575.3 ($18.5). The stock is now down 20% from its recent peak of ₹1,944 ($22.8).
The cancellation is seen as a major setback in Saudi Arabia’s efforts to expand its water desalination capacity to meet rising domestic demand. Analysts are closely monitoring how this development may impact the Kingdom’s broader utility infrastructure strategy.
Further updates are expected as VA Tech Wabag seeks clarity on the project’s status and the next steps.
