JEDDAH, 8 July 2005 — The first steps toward privatizing the Saline Water Conversion Corporation (SWCC) are under way. Water and Electricity Minister Abdullah Al-Hussayen, who is also the chairman of SWCC, announced that the ministry is in the process of privatizing the organization and transforming it into a holding company, Al-Riyadh newspaper reported. Al-Hussayen said his ministry would choose specialized consultants to study the process from financial, legal and technical aspects.
Following the SWCC’s board meeting on Tuesday, Al-Hussayen gave a press statement on the different proposals considered for privatizing the water sector.
One of them is production stations, 60 percent of which will be offered to the private sector, 32 percent will be owned by the Public Investment Fund and the remaining 8 percent by the Saudi Electricity Company. The first of four desalt projects to be implemented by the private sector has already been offered. They include the SR9 billion Shoaiba project, and a Saudi-Malaysian consortium was selected as the builder.
Al-Hussayen pointed out the ministry’s intention to privatize the water and the sewage sector especially in the main cities. The ministry has started by conducting a complete inspection of the water and sewage situation and signed a contract with a French company to start this project in Riyadh. Inspection of the leakage is another important matter and a Swiss company is conducting that.
Al-Hussayen emphasized that the private sector’s participation in water desalination aims at improving the services. He also said that privatization would not affect prices because the prices are set by the government and not the private sector. As for benefits to the private sector, he said that the company that would administer the sector would gain a return after the improvements in service such as reducing leakage, improving bill collection and better reading of the meter.
The minister said increasing activities in water and sewage projects demand the establishment of a joint stock company by investors in order to implement the projects. He described the current efforts at conserving water as successful.
During the board meeting, several topics were discussed about the SWCC work, its achievements, steps taken toward privatization and restructuring. The board reviewed the accounts for the year and discussed SWCC’s budget for the coming year and its new projects.
Meanwhile, the Ministry of Water and Electricity has approved a plan to improve and privatize the water and sewage sector in the Kingdom, reported Al-Eqtisadiah, a sister publication of Arab News.
Al-Hussayen also said that another sewage project in southern Jeddah has been offered for privatization costing SR1 billion and a bidder will be selected within days. He said that establishing new desalination plants will help overcome the shortage in water and that SR300 million has been allocated for the inspection program and the establishment of new desalination plants.
