Algiers is to overhaul the structure of its water sector, with the establishment of a single water holding company to manage the industry’s existing government agencies, Water Resources Minister Abdelmalek Sellal has announced.

The new company, expected to be established in 2006, will embrace the private sector model, following the ownership structure of Algerian Energy Company, with 50 per cent to be held by state energy company Sonatrachand 50 per cent by state power company Sonelgaz.

The umbrella body will include the dams agency Agence Nationale des Barrages (ANB), water company Algerienne des Eaux (ADE), drainage agency Agence Nationale de Realisation et de Gestion des Infrastructures Hydrauliques pour l’Irrigation et le Drainage (AGID) and water purification body Office National d’Assainissement (ONA). The government will hand over all its water assets to the new company.

‘The government has recognised that water is a critical resource and that there is a need to improve the efficiency of the sector,’ says an industry source. ‘The new company will begin to behave like an asset owner, with its focus on maximising value from its assets rather than on operational concerns. It will be financially viable in its own right, and it will be owned by two companies that are financially viable.

‘The new structure will enable the government to raise money in different ways, and use different delivery and operator models, such as long-term operating contracts.

‘There will be a greater role for the private sector, not just in infrastructure construction, but also in operation and management [O&M]. And the government will be able to sell off parts of the company, or a strategic stake, should it choose to do so in the future.’