Saudi Arabia’s National Water Company (NWC) plans to spend SR249bn ($66.4bn) on water and wastewater projects in the Kingdom between 2012-20. About SR112bn will be spent in capital expenditure (capex) and SR137bn on operating expenditure (opex).

Most of the spending is to take place in the wastewater sector. SR133.9bn will be spent on wastewater projects, of which SR44.8bn will be in capex and SR89.1bn in opex. NWC plans to spend SR115.1bn on water supply projects between 2012-20. Of this figure, SR47.9bn will be spent on capex activities and SR67.2bn on opex.

The improvements are set to focus on improving services in some of Saudi Arabia’s biggest cities. Some major improvements have already been made. Jeddah was the city most in need of drastic improvements to its wastewater system. In 2008, Saudi Arabia’s National Water Company (NWC) had a coverage of 22 per cent in the country’s second largest city. Heavy flooding in 2009 highlighted the need for adequate wastewater and drainage systems. NWC is currently improving Jeddah’s system starting with an $8bn capital injection for wastewater networks and treatment.

In addition, international companies have been brought in to manage water and wastewater in three of the kingdom’s largest cities. Jeddah and Riyadh have experienced significant improvements following the signing of the contracts with the private sector. Customer satisfaction has increased from 45 per cent in 2008 to 85 per cent in 2011. Meanwhile the time taken to install a new connection has declined from 180 days in Riyadh and 70 days in Jeddah in 2008 to 30 days in Riyadh and 28 days in Jeddah in 2011 according to NWC.

A key aim of the management contracts was to increase water supply and minimise the level of water lost through leaks. France’s Veolia Water in Riyadh and Suez Environnement in Jeddah have been quite successful in achieving this. Water supply has increased from 753 million cubic metres in 2008 to 1,035 million cubic metres in 2011.

Water saved from leakage prevention has increased from just 7.251 million cubic metres in 2008 to 65 million cubic metres in 2011 in Riyadh and Jeddah. This is particularly important in Saudi Arabia where water is expensive to produce.

Similarly, in an effort to minimise the unnecessary use of desalinated water for uses that do not demand potable water, Saudi Arabia intends to fully utilise its treated sewage effluent (TSE). NWC intends to create TSE businesses from its existing wastewater assets by developing a long-term market for the treated wastewater.

TSE is currently only used in Riyadh and Jeddah on a very small scale. The overall use of TSE in Saudi Arabia is expected to treble by 2020 and almost quadruple by 2030. TSE sales have increased dramatically from no sales in 2008 to 495,000 cubic metres per day currently.

As a result, TSE is becoming an important stream of revenue for NWC. By 2022, revenues from TSE sales will exceed revenue from potable water sales across six major cities. By 2030, about SR2.83bn will be generated from potable water sales while TSE revenue will stand at SR3.282bn.