Riyadh approves utility sale
Water & Electricity Minister Abdullah al-Hussayan and the board of directors approved on 10 October the privatisation strategy for Saline Water Conversion Corporation (SWCC). The decision will now go to the Supreme Economic Council for review and final approval.
The state-owned desalination plant operator will become corporatised as a holding company with separate production and transmission subsidiaries. Private sector participation will be obtained through the production companies using the kingdom's existing independent water and power project (IWPP) model.
'We expect the government approval process to require three-six months,' says SWCC director of privatisation Saad Bakheit. 'This will be followed by a restructuring phase and the preparation of all required tendering material. The beginning of introduction of partnership contracts with the private sector could begin in 2008 or 2009. All privatisation options offer possibilities of IPOs for any of the incorporated companies.
'Revenues will be secured through long-term contractual arrangements with the offtaker or directly with the entities responsible for water distribution, namely the ministry and the national water company, in addition to Saudi Electricity Company for electricity generated.'
The selected strategy was the culmination of an eight-month advisory process carried out by Booz Allen Hamilton (strategic), Germany's Fichtner (technical), Ernst & Young (financial) and Prima Law & Consultation Office with Freshfields Bruckhaus Derringer (legal) (MEED 9:12:05).
The privatisation decision was taken a week after Riyadh created a new water company to oversee the privatisation of the groundwater, water distribution and wastewater sectors.
Al-Hussayan said the company, which will have a capital of SR 30,000 million-40,000 million ($8,000 million-10,666 million), will start operating commercially within four months of its creation. Up to 40 per cent of the company's shares will be sold publicly in an initial public offering (IPO).
Its first major task will be to oversee the privatisation of the water distribution and wastewater networks in the kingdom's four main cities of Riyadh, Medina, Jeddah and Dammam. Saur International, Safege and Veolia Environnement, all of France, are carrying out a wholesale audit of the networks in preparation for the sell-off (MEED 14:4:06; 2:12:05).
www.meed.com/powerwater
Water & Electricity Minister Abdullah al-Hussayan and the board of directors approved on 10 October the privatisation strategy for Saline Water Conversion Corporation (SWCC). The decision will now go to the Supreme Economic Council for review and final approval.
The state-owned desalination plant operator will become corporatised as a holding company with separate production and transmission subsidiaries. Private sector participation will be obtained through the production companies using the kingdom's existing independent water and power project (IWPP) model. 'We expect the government approval process to require three-six months,' says SWCC director of privatisation Saad Bakheit. 'This will be followed by a restructuring phase and the preparation of all required tendering material. The beginning of introduction of partnership contracts with the private sector could begin in 2008 or 2009. All privatisation options offer possibilities of IPOs for any of the incorporated companies. 'Revenues will be secured through long-term contractual arrangements with the offtaker or directly with the entities responsible for water distribution, namely the ministry and the national water company, in addition to Saudi Electricity Company for electricity generated.' The selected strategy was the culmination of an eight-month advisory process carried out by Booz Allen Hamilton (strategic), Germany's Fichtner (technical), Ernst & Young (financial) and Prima Law & Consultation Office with Freshfields Bruckhaus Derringer (legal) (MEED 9:12:05). The privatisation decision was taken a week after Riyadh created a new water company to oversee the privatisation of the groundwater, water distribution and wastewater sectors. Al-Hussayan said the company, which will have a capital of SR 30,000 million-40,000 million ($8,000 million-10,666 million), will start operating commercially within four months of its creation. Up to 40 per cent of the company's shares will be sold publicly in an initial public offering (IPO). Its first major task will be to oversee the privatisation of the water distribution and wastewater networks in the kingdom's four main cities of Riyadh, Medina, Jeddah and Dammam. Saur International, Safege and Veolia Environnement, all of France, are carrying out a wholesale audit of the networks in preparation for the sell-off (MEED 14:4:06; 2:12:05). www.meed.com/powerwaterThis content is only available to full MEED package subscribers (MEED magazine and MEED.com).
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