Gas turbine services drive the Middle East and North African power plant services market

The growing installations of combined cycle power plants will also generate opportunities from boiler services for this US$2.29 billion market in various countries. Driven by these trends, revenues are expected to reach US$3.45 billion in 2011.

The countries in the Middle East and North Africa region are increasingly planning to diversify from oil and gas, thereby diverting the funds available for public works and infrastructure. The resultant dearth in funds for power plant maintenance activities need to be compensated for by a private investor that will also serve as a partner to the national utility in achieving objectives.

"Although some countries may currently have a budget surplus, this situation is highly volatile and they are continuously seeking investment from other sources to build infrastructure and facilities for the growing population," says Frost & Sullivan Research Analyst, Karthikeyan Vadamalairaaj. "Taking a cue from countries that have been front-runners in attracting heavy investment, the Middle East and North Africa regions have also taken steps to obtain funds for infrastructure development."

Apart from acquiring adequate funds, privatisation is crucial for the expansion of the power sector and consequently, the growth of the power plant services market. However, the governments of different countries have disparate perspectives on privatisation, mainly because of their conservative understanding of this concept.

"The region, as a whole, is conservative towards opening up of the markets to private investors," notes Mr. Vadamalairaaj. "Although the governments have realised the need of private investors to build the nation's infrastructure, progress is slow and bills of privatisation have been met with opposition."

Market participants will have to create strategic alliances with the consortium that is bidding for the total power plant in order to tap the potential of the market. An original equipment manufacturer (OEM) has the competitive advantage of securing the equipment services contract, apart from supplying new equipment until the expiry of power purchase agreement between the national utility and the special purpose vehicle company.