May 17, 2008

Expansion plans for water projects in Saudi Arabia

ArabianBusiness.com reported that Saudi Arabia is set to expand the privatization of its desalination and wastewater treatment sector to cover more cities in the country. The move follows the creation of the National Water Company earlier this year to oversee the privatization process which aims to improve water services in Saudi Arabia and save dwindling supplies.

The report added that the company will initially target the privatization of water projects in four cities, including Jeddah, Madinah and Riyadh.

Mr HE Loay Al-Musallam head of privatization team and deputy minister of planning and development, Ministry of Water & Electricity said "Within the next three years, we hope to cover most major cities in Saudi Arabia. I'm confident that we can create a leading water utilities service in the region."

Mr Al-Musallam added that desalination and wastewater treatment projects are implemented either as a build operate transfer or private-public partnership. He said that "Having both schemes gives us the ability to attract different types of bidders. We issue a management contract for the distribution of water and wastewater collection, one for construction of the plant and another for the sales promotion.”

He added that "The way in which we have built these contracts gives us the confidence that our targets will be met in collaboration with the private sector."

The process of privatizing Saudi Arabia's water projects began in November 2005, when a consortium of Saudi and Malaysian companies was awarded a USD 2.4 billion contract to build the Shuaiba 3 desalination plant.