JEDDAH, 24 January 2008 — The National Water Company (NWC), which was licensed by the Cabinet last week, will be fully owned by the government and will cover all parts of the Kingdom in three years, said Water and Electricity Minister Abdullah Al-Hussayen.

He said the new company will have a capital of SR22 billion with 2.2 billion shares, each with a nominal value of SR10, and a paid-up capital of SR6.84 billion with 684.88 million shares. He hinted at selling part of its shares in an initial public offering at a later stage.

The minister described the Cabinet decision on NWC as a historic one as it would bring about qualitative changes in water production and distribution in the country. Saudi Arabia is the world’s largest producer of desalinated water.

“The Council of Ministers will look into the possibility of selling the company’s shares in an IPO in light of proposals to be made by the Ministry of Water and Electricity in coordination with the Finance Ministry and other authorities,” he said.

According to a Cabinet statement, NWC will provide all services related to underground water sector, drinking water distribution sector and collection and treatment of sewage water on a sound commercial basis. “The company will receive all its dues, including charges for its services in the specified time from all subscribers without exception,” statement said.

“All rights and properties of the state in the above sectors will be transferred to the company in phases determined by the minister of water and electricity,” the Cabinet said. “All financial and contractual commitments of the state that are related to the above sectors will also be transferred to the company in stages,” it added. Al-Hussayen said the new company would replace directorates of water in cities and regions. An international firm will be appointed for five years to manage the company, he said, adding that the company’s board of directors will select that firm.

NWC’s activities will start from Riyadh, the largest consumer of water in the Kingdom, as the company will take over groundwater resources, sewage network and sewage treatment plants in the region. Within three months the company will move to Jeddah, then to Madinah, Dammam, and Makkah. “These five cities account for 65 percent of water consumption in the country,” he pointed out.

The new company will have a seven-member board of directors chaired by the minister of water. It will have two members each from the Ministry of Water and Electricity, the Ministry of Finance and the private sector.

Al-Hussayen also said the ministry has plans to revise the water tariff, adding that an advisory body will look into the matter. He said the ministry would have a special department to carry out public awareness campaigns to promote wise consumption of water and prevent wastage.

Speaking about water shortage in Jeddah, Makkah and Taif, he said it would be solved with the completion of the Shuaiba-III water desalination plant. “Within a year the plant will be ready and will supply enough water required by the three cities,” he said.

The plant is expected to supply about 194 million gallons of water daily as well as 900 megawatts of electricity daily when it becomes operational by the end of next year.