Saudi utilities are right to bond together

Responsibility for the power and water sectors in Saudi Arabia is shared between four separate government owned utilities - the Water & Electricity Company, Saudi Electricity Company, the Saline Water Conversion Corporation (SWCC) and the Power & Water Utility for Jubail & Yanbu (Marafiq).

Despite the companies all being tasked with ensuring the kingdom's growing demand for power and water is met, they have so far pursued this objective completely independently of each other.

Now, spurred by the global economic slowdown, they have seen the error of their ways and recognised the need for a co-ordinated response to the demand picture.

As a result, Marafiq and SWCC are now planning to merge what were to be two separate projects located at Yanbu.

SWCC and Saudi Arabian Mining Company (Maaden) also intend to combine their power and water schemes at Ras al-Zour.

In both cases, the government has abandoned plans to develop the projects as private schemes and is opting instead for the more conventional engineering, procurement and construction approach.

Greater co-operation between the various stakeholders in the power and water industries will ensure that the right amount of new capacity is built where it is needed and in the most efficient way possible.

Marafiq, SWCC and Maaden have been forced into this position by the economic downturn.

They must now stay the course with this new collaborative approach regardless of the fortunes of the economy in years to come.

With Saudi Arabia's fast-growing population, the most important thing for the power and water sectors is to ensure that capacity is increased and future demand is met.