Saudi water privatisation ahead of schedule

17 March 2008

The privatisation of Saudi Arabia’s water re-use industry is ahead of schedule and the management of the sewerage systems of six more of the kingdom’s conurbations is to be put out to tender soon, according to the government.

The ministry has already contracted out the long-term management of the sewerage systems in Riyadh and Jeddah and contracts for greater Dammam, Medina/Yanbu and Mecca should follow by the end of 2008. It is now expanding this scheme.

Speaking at MEED’s Middle East Power & Water conference in Abu Dhabi on 17 March, Saudi Arabia’s deputy water and electricity minister Loay al-Musallam said: “We are now moving ahead with the private management of six more urban areas. They are Taif, Buraidah/Unaizah, Khamis Mushayt/Abha, Tabuk, Jubail and Hofuf.” This will extend privatised sewage system management to 15 Saudi cities with a total population of more than 14 million people that consume almost 4 million cubic metres a day of drinking water.

Other water re-use initiatives include applying build-own-operate methods to existing sewage treatment plants in Riyadh and Jeddah.

A concession for Riyadh is due to be signed by the start of the first quarter of 2008. The Jeddah concession deal is expected in the second quarter.

The tendering process for the greater Dammam area, Mecca and Medina is due to start at the end of the first quarter and all three concessions are due for signing by the second quarter of 2009.

Al-Musallam said the ministry was examining the possibility of setting up partnerships between the National Water Company, which was set up in January, and the private sector to sell treated effluent to district cooling businesses and other private buyers.

“There is a huge demand for treated effluent,” he said. The first opportunity might emerge in Riyadh which has a population approaching 5.5 million people and produces more than 1 million cubic metres a day of treated effluent,” said Al-Musallam.

He added that this could lead to sales of 800,000 cubic metres a day of water with a value of at least $4bn over a 25-year period.

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