The water masterplan for Jeddah, Mecca and Taif has been completed by Dutch consultants Arcadis.

Water sector contractors are hoping for a pipeline building programme in the three cities as the National Water Company (NWC) takes responsibility for water distribution and wastewater in the urban areas.

“Just one of the Jeddah packages involves hundreds of kilometres of water supply main lines,” says a water consultant working in the kingdom. “The masterplan will involve the layout for water supply and wastewater networks in the cities and industrial areas, while in Mecca the focus was initially on water services for the redevelopment of the haram and the facilities around it.”

Spain’s FCC Aqualia was one of the contractors working on similar schemes in Riyadh after the masterplan for the capital was completed four years ago.

“The masterplan focuses on water efficiency: reducing leakage; optimising and automating networks; and getting the right pressure across the network,” says Javier Diaz, country manager for Aqualia in Riyadh. “After investing in desalination, Saudi Arabia needs to look at distribution and reducing high rates of leakage.”

Two other masterplans for Medina, and Damman and Al-Khobar are in their final stages. Another three are planned for secondary cities in Saudi Arabia. The NWC is expected to take responsibility for water and privatise assets when the masterplans are complete.

However, questions remain about the NWC’s eventual mandate and responsibilities, and that of the Ministry of Water & Electricity and local municipalities. These difficulties have delayed the NWC’s assumption of responsibilities for more areas.

“The NWC carries out masterplans as it takes over the water assets for a city,” says the water consultant. “But the lines are blurred and NWC is working in some areas it has not yet taken over, while in others it is delayed for administrative reasons after receiving a mandate.”

Masterplans look at current and planned industrial and residential areas and their water needs, and improving continuity of supply. They lay out the installation of water supply mains in each city and the upgrade of existing networks, pumping stations and reservoirs.

New water networks will incorporate smart systems to monitor flow, pressure and quality, and forecast demand and leaks. Smart metering is currently being rolled out.

The masterplans also include wastewater treatment plants and the extension of wastewater networks. Coverage is currently low in the kingdom.

However, the pace of contracting this work is often slow, especially for wastewater projects, which are seen as a lower priority.

Investing in wastewater services could potentially reduce Saudi Arabia’s escalating water demand.

Following raises in industrial water rates, the NWC has the opportunity to commercialise treated sewage effluent (TSE) and generate revenue. The majority of TSE is currently pumped into the sea.

Since the NWC’s creation in 2007, it has had the task of managing the privatisation of water supply and wastewater assets in the kingdom. It is currently investing billions in improving water provision. To be successful, the NWC must identify sources of revenue and a profitable business model to reduce subsidies and attract private sector interest.

One problem is the extremely low water rates paid by residential users, which the NWC has no plans to raise. The weak regulatory framework also makes privatisation difficult.

Nevertheless, a spokesperson for the NWC insisted that privatisation would move forward over the next five years, with an increased budget of SR22bn ($5.9bn). It is working on forming two closed joint-stock companies, and plans an initial public offering in 2018.