JEDDAH, 23 March 2005 — Saudi Arabia has offered new desalination projects worth SR36 billion to private investors as part of its drive to fully privatize the sector, according to Fehaid Al-Sharief, governor of the Saline Water Conversion Corporation (SWCC) and chairman of the Water & Electricity Company (WEC).
Addressing the second Middle East conference on water and electricity in Abu Dhabi, Al-Sharief said the new projects include four giant independent water and power producers (IWPPs) — Shuaiba Phase-3, Shuqaiq Phase-2, Ras Al-Zour and Jubail Phase-3 — which are estimated to cost SR23 billion.
“Tenders for Shuaiba Phase-3 have already opened,” the governor said, adding that experts were presently analyzing technical and financial aspects. SWCC had earlier short-listed 11 companies for the Shuaiba project, which is estimated to cost between SR4.5 billion and SR5.6 billion.
The winner of the contract, to be announced shortly, will have a 60 percent stake in the project. The Public Investment Fund will hold 32 percent of shares and WEC eight percent. Shuaiba, located about 100 km south of Jeddah on the Red Sea, is the Kingdom’s second largest desalination plant.
Referring to other projects, he said there are four water pipeline systems, which are estimated to cost SR10 billion, six small desalination plants worth SR850 million, the Alkhafji plant valued at SR650 million and building projects worth SR1.5 billion.
Al-Sharief said that desalination would remain a strategic option to meet the Kingdom’s potable water requirement. “We have so far spent nearly SR54 billion on desalination projects, which cater to 60 percent of water needs in the main cities,” he added.
“The Supreme Economic Council’s decision allowing private sector participation in water and electricity projects is an actual translation of the Kingdom’s privatization strategy,” the SWCC chief told the conference.
He said the formation of the Electricity Authority would also help private investors. “The WEC being the sole purchaser of water and electricity from investors will also reduce investment risk,” he pointed out.
The direct credit support offered by the government to companies involved in water and electricity projects and the provision of land at nominal rates would encourage private investments, the governor said.
