Algeria’s bitter experience is a reminder that, despite the recent rain, the Middle East and North Africa (MENA) remains the most arid region in the world. The statistics are bleak: MENA is home to 5 per cent of the world population, but has less than 1 per cent of global freshwater resources. Average per capita water availability in the region is about 1,200 cubic metres a year (cm/y) against a world average of 7,000 cm/y, with residents of some areas, including West Bank/Gaza and Yemen, having access to as little as 200 cm/y. What’s more, as water consumption and population increase steadily, per capita regional water availability is falling: by 2025, World Bank projections put the average figure as low as 500 cm/y.

‘The strain on existing water resources is enormous,’ says Salah Darghouth, the World Bank’s sector manager for water environment in the Middle East. ‘In many areas groundwater is extracted at an unsustainable pace.’ As a result, salt water is entering the water table, contaminating the meagre supplies that are left. Water-intensive agricultural methods magnify the damage: irrigation claims about 87 per cent of available water resources, yet only contributes to between 5 and 20 per cent of gross domestic product.

‘It’s vital that governments have an integrated strategy towards water supplies,’ says Darghouth. ‘Water use for agriculture cannot be separated from urban demand since the resource base is one and the same. A 10 per cent increase in efficiency of agricultural water use will double the availability of water for urban consumers.’

The World Bank is encouraging authorities to consider a range of strategies to reduce water depletion, from improved irrigation technology to the re-use of wastewater, until recently considered a spent resource. ‘The potential efficiency gains are enormous, but it’s a delicate debate,’ says Darghouth. ‘It’s important governments realise the World Bank does not want to get rid of agriculture, but instead wants changes in production methods to maintain output at current levels with lower water consumption.’

Shortages have been compounded by the inefficient and inadequate structure of water provision. Old systems and low technical efficiency mean unaccounted-for water is often as high as 50 per cent, more than twice World Bank guidelines. Heavy government subsidies on tariffs deprive the networks of much-needed investment, and disguise the true cost of water to consumers, who consequently do not optimise its use.

As regional governments come to terms with the potential crisis they are facing, there is a growing recognition that the issue of resource management must be addressed. Increasingly, ministries are turning to private expertise for assistance.

Morocco is leading the way in private-sector involvement in water and wastewater management. Residents of Casablanca and Rabat are already reaping the benefits that private investment has brought. Winter flooding, once a regular occurrence in Casablanca, is now a thing of the past thanks to the improved water collection facilities engineered by Lydec, a subsidiary of France’s Ondeo, under its 30-year concession. Spurred on by the success of the concessions, Morocco has recently awarded a 25-year concession to a group led by France’s Vivendi Water for the supply of utility services to the northern coastal cities of Tangiers and Tetouan. Initial stages of the $663 million investment programme will concentrate on improving sanitation and flood protection in the two areas. In Algeria, where the regulatory framework is not as advanced as in Morocco, the government is adopting a progressive approach to private involvement. The first step in the process, a management contract for the rehabilitation of the capital’s water network, began in April, when a French group led by Societe des Eaux de Marseille won the $23 million, 40-month contract. Work will be carried out on a 50-kilometre section of the network, with the aim of reducing leakages to 20 per cent from 50 per cent.

While management contracts have their advantages, water companies tend to see them as a precursor to better things. ‘They are a bit like getting engaged,’ says one international water executive. ‘You hope that it will lead to a long happy marriage .. Water is not a sector where you can work in the short term. Investment is heavy, the parameters of control over the sector are wide, and the best results are achieved over a longer period.’

Private involvement is not only restricted to service provision. As governments recognise the need to optimise existing water resources, the build-operate-transfer (BOT) model is gaining acceptance as the way forward for greenfield projects across the region. In the Gulf, Kuwait is pioneering the formula with the $390 million Sulaibiya wastewater and reclamation scheme. Jordan too has recently joined the fold, awarding the Ondeo group a $150 million BOT wastewater treatment project at Kherbet al-Samra, the group’s third major water project in the country.

Jordan is also considering applying the BOT model to the Disi water conveyance project, although, keeping its options open, the government has not dismissed the engineering, procurement and construction (EPC) approach (see page 26).

Such a redistribution of national water resources is being replicated across the region as MENA governments seek to ease chronic water shortages. One of the most ambitious and enduring of these is Libya’s Great Man-made River (GMR) project, whose painstaking trek across the desert is now in its second decade. In Algeria, the government announced in October that it planned to invest almost $1,300 million in three of the country’s major transfer systems: the Taksebt water supply programme, the Beni Haroun transfer system and the Mostaganem-Arzew-Oran supply corridor. In Lebanon, the Litani river project – involving the construction of a 56-kilometre canal to irrigate the south with water from the Qaraoun lake – is moving ahead, 50 years after the plans were first drawn up.

While internal transfer projects carry their own financial and environmental risks, backers of the ground-breaking Iran-Kuwait pipeline will have to take into account the additional political factor. The estimated $2,000 million project to pump supplies from water-rich Iran will be the first international transfer scheme in the region (see page 27).

With many years, and much discussion, to go before imported water becomes a reality, the Gulf’s principal source of water remains the desalination plant (see above). North Africa, too, is jumping on the desalination bandwagon. The General Electricity Company of Libya has allocated $1,000 million to build 11 plants over the next 10 years. In Algeria, France’s Degremont is building a 38,000-cubic-metre-a-day desalination plant in Bredeah, to supply drinking water for the residents of Oran, and an award is imminent for an independent water and power project at Arzew, the country’s first.

It is cruelly ironic that Algeria, which is still engaged in the clean-up operation of devastating floods, is implementing major water production schemes. But the lesson is clear: to ensure sufficient water supplies for economic development to match population growth, relying on nature is not enough.