Established to drive the reuse of water in Muscat, the Omani company aims to become profitable by 2014.
Oman Wastewater Services Company (OWSC) was rebranded Haya Water in October. OWSC was established in December 2002 to build, own and operate a modern wastewater system for the Muscat governorate. It was set up with initial capital of RO20m ($52m) and mandated to implement the $4bn Muscat wastewater scheme. The company posted a loss of RO3m in 2007.
Haya Water is a joint-stock company, entirely owned by the Omani government. Its chief executive officer, Omar Khalfan al-Wahaibi, was the first member of staff to be appointed.
The board of directors has six members, representing the finance, national economy, regional municipalities, environment and water resources ministries, Muscat Municipality and a representative of the private sector. The firm is headquartered in Al-Khuwair, Muscat, and employs 420 staff. It has five departments: finance; projects; operation and maintenance; human resources and public relations; and customer services.
In the past, the Muscat Municipality was responsible for the provision of wastewater services in the Omani capital. It operated a limited wastewater network that connected less than 14 per cent of the population. The rest of the city relied on septic tanks, which were periodically emptied by tankers, with the waste then taken on to treatment plants. The municipality’s network and its 11 treatment plants were transferred to Haya Water.
Haya Water operates under a 30-year concession agreement, which started on 1 January 2006. Its remit is to collect and treat wastewater for 90 per cent of the population in the districts of Muscat, Mutrah, Bousher, Alseeb, Alaamirat and Qurayat, by 2017. The project is known as the Muscat wastewater scheme and involves building a sewerage network and treatment facilities, as well as upgrading existing water treatment plants, which are exceeding their design capacities.
|Main business sector||wastewater|
|Main business region||Oman|
|Chief executive officer||Omar Khalfan al-Wahaibi|
Haya Water’s income is generated through connection fees, monthly service charges and the sale of treated effluent. The service charges are calculated as a percentage of the total water consumed by a property and are included in the water bills. Existing properties are not charged for the initial connection to the sewerage system as the network is being extended, but subsequent new builds will have to pay a connection fee, which will be determined by the size of the building.
The company operates 12 treatment plants, which combined receive 50,000 cubic metres a day of waste from almost 80,000 residents. Under the scheme, the firm will build six new major treatment plants and several smaller units. The treatment plants are generally being tendered as design-build-operate contracts, with five-year operation agreements. These projects are awarded with a lump sum for construction, while the operation fees contain fixed and variable elements depending on the amount of waste treated.
Haya Water is also installing a sewage collection network, with vacuum and gravity sewers and pumping stations. At the same time, it is building a secondary network to distribute treated sewage effluent around the city. Haya Water has a treated sewage effluent sales and purchase agreement with Muscat Municipality, which uses the water to irrigate public spaces. About 60-70 per cent of Haya Water’s treated sewage effluent is currently reused.
Haya Water aims to have 80 per cent of the Muscat population connected to its sewage collection network by 2014, and 90 per cent connectivity by 2017. As some areas of the governorate are inaccessible, full connectivity is not possible. The total cost of the project is estimated at $4bn.
Although the company is currently operating at a loss, Al-Wahaibi expects the firm to become profitable by 2014, as more properties begin to pay service charges.
|Sales of treated effluent in 2007||RO2.99m|
|The number of treated plants operated by Haya||12|
|The proportion of Muscat residents to be connected to Haya’s sewage collection network by 2014||80%|
He also plans to expand treated sewage effluent sales through providing treated water to private entities in addition to the municipality. The company is already in talks with a district cooling provider over a potential supply deal, and opportunities to sell water to resorts for the irrigation of golf courses are being explored.
Once the new wastewater system is set up and the company is generating sufficient operating revenues, the government plans to privatise Haya Water. When this will happen and what form the privatisation will take has yet to be decided.
The Omani government has embarked on a commendable project to improve wastewater services in the Muscat region. The negative impact of septic tanks on public health and the environment are well known and in the 21st century, a modernising, expanding city cannot afford the risk of tanks overflowing and raw sewage leaking into groundwater sources.
The government has chosen to upgrade its sewerage system itself rather than follow the example of other countries in the GCC that have brought in international technology and expertise either through equity holdings or delegated management contracts. Although the capital outlay for the government is sizeable, as Haya Water’s customer base increases, both for sewage collection and the treated sewage effluent sales, the firm will be guaranteed a healthy revenue stream, making it an attractive and valuable asset when it is eventually put up for privatisation.
The decision to include a treated sewage effluent distribution network in the Muscat wastewater scheme is prudent as water reuse is set to play an increasingly important role in the decades ahead as the region’s water shortage grows. It will be especially important for allowing district coolers to use treated sewage effluent instead of drinking water. In neighbouring countries, efforts to encourage the use of treated water in cooling systems are being hampered by a lack of such infrastructure.
Q&A Omar Khalfan al-Wahaibi, CEO
Why have you recently rebranded as Haya Water?
We believe it will make the name more attractive and easier to remember for our customers and prospective employees. It is also to link our image with what we actually do, which is making water available to make Muscat greener.
‘Haya’ is the route word for life, but also means the grass that comes after the rains in the desert. And that is what we do, we provide this water so greenery comes out of the ground, and we want to link ourselves to that.
Does Haya Water plan to move into water provision as well?
Our primary mission is wastewater collection, treatment and reuse, but we are ready for the challenge of providing water services. However, this is a government decision and it depends on how it wants to structure the water sector in general.
The government is thinking about this and hopefully we will be in the position to work on this if it decides to merge the water and wastewater sectors. We are not just willing, we are also capable of providing both services.
It would be a very good idea as there would be a lot of optimisation and a better service could be provided to the customers.
When do you expect to become profitable?
When we have enough people connected to the system. If we continue the development programme as we are planning at the moment, hopefully by 2013-14.
Do you have any intention of following the delegated management model adopted by Saudi Arabia of bringing in private companies to run the waste-water network?
No, we have been formed to do exactly this job, to build and operate the system. What we outsource is the design and construction; what we do internally is the operation.
Will you look to expand beyond the Muscat region and even outside Oman?
Yes, definitely, but we need to establish our systems here in Muscat first, to gain the experience and build ourselves a solid foundation before we go elsewhere.
What impact will the financial crisis have on your company?
With the downturn and the lower oil prices, there is a risk concerning the availability of funds to continue the building of infrastructure, but I know the government is committed to this project and will support it all the way.
As a company, you are already achieving high levels of wastewater reuse. Do you think Oman will ever go as far as Singapore and permit treated effluent to be reused as drinking water?
I would not say it is never going to happen, but I don’t see it happening in the near future. To say it would never happen would be to rule out a very important use for the water.
At the moment though, our water is used mainly for irrigation purposes. We hope in the future it will be made available for agriculture as well, as the quality of the water we plan to produce through our new plants will be safe to use for agriculture.
Do you favour conventional treatment technologies or are you willing to try out new techniques?
Our primary concern with regard to technology is the quality of the water produced, and we look for technologies that provide ultra-filtration or micro-filtration. We want water that is safe for direct human contact as the water is being used for irrigation of parks. I do not want the public to be in contact with water that might have harmful elements.
Some cities in the region are being spoilt by sewage odours. What are you doing to avoid that happening in Muscat?
In all our plants there are odour control systems. We take special care in the sensitive sewage treatment plants and areas where they are near to the public. We usually conceal them in a nice building and they have all the treatment systems to make sure they have minimal impact on the surroundings.
“We have been formed to do exactly this job, to build and operate the system”