Decision imminent on new desal capacity

26 July 2002

The first independent water and power projects (IWPPs) are due to be carried out soon, Abdullah al-Hussayen, governor of the Saline Water Conversion Corporation (SWCC), told MEED on 24 July. At the beginning of what could prove a landmark quarter for the kingdom's water sector, decisions are also expected on how SWCC will be organised to fit into a liberalised water and power production sector, and on the appointment of a new water minister.

'There are three plans for IWPPs in the kingdom, all of which now fall under the gas initiative,' said Al-Hussayen. 'But Foreign Affairs Minister Prince Saud al-Faisal has made it very clear that these projects will go ahead regardless of what happens in the gas initiative. If they have to be implemented another way, then it will be done privately in co-ordination with SWCC and SEC [Saudi Electricity Company] .'

The three plants now under consideration are to be situated at Jubail and Ras al-Zour in the Eastern Province, and at Shuaiba in the Western Region. With the gas initiative negotiations now in a final stage, a decision is imminent on how these three projects will be carried out.

A masterplan for the SWCC's new structure, which was prepared by the US' McKinsey & Company, was due to be presented to the SWCC board on 24 July for approval, after which it will be presented to the Supreme Economic Council for a final decision on implementation. The report is understood to recommend that existing SWCC assets be partially sold to the private sector, while companies will be formed for new projects alongside SEC and the private sector. Under the plan, SWCC would eventually become a holding company with stakes in all green and brownfield IWPPs.

The government is preparing to announce the appointment of a new water minister to head a dedicated water ministry that is to be split from the Agriculture & Water Ministry, and incorporate elements of other ministries including the Industry & Electricity Ministry and the Municipal & Rural Affairs Ministry. A senior source told MEED in mid July that an announcement 'could happen any day'. The appointment will allow the new ministry to be set up, creating a single strategic decision making body for the sector.

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