DAMMAM: Regulatory structures and environmental impact provided the major themes on the second and final day of the WEPower 2009 in Dammam yesterday. Given over to panel discussions, the conferees interacted with representatives from regulatory bodies and financial experts to discuss detailed aspects of privatization.
Abdullah Al-Shehri, vice governor for regulatory affairs at the Electricity and Cogeneration Authority, was sanguine about the prospects of getting the regulatory structure for both water and electricity in place and operational in short order. “The laws governing the electricity sector were in place during 2006 and just last week the draft report on water legislation was published,” he said. He added that a privatization plan had already been approved and estimated that the structure would be complete and operational in two to three years.
The water distribution sector was moving ahead swiftly in terms of breaking up the government structure into private bodies, but no clear regulations or single regulator concerning responsibility or revenues were yet visible, opined Diana De Pinto, Middle East program director for Ernst and Young. De Pinto noted that at one point the responsibility for water and wastewater was spread across ten different authorities. “Revenues covering water and wastewater services are only about 10 percent of cost and needed to be regularized,” she suggested.
The lack of a clear master plan was noted by Walid Basoudan, president and CEO of Saudi Masader. “We need a master plan to issue to potential stakeholders and a real demand study. It is vital to have it to develop strategic projects,” he said. “There has to be a clear position.”
Bousadan also pointed out the need to both establish contract limits for developers so that they could identify clearly the potentials for investment in a project and a strong communication structure to interact with potential stakeholders.
Turning to the potential for investment and the economic viability of water as an economic good that private investors would be attracted to Al-Shehri thought that demand for water was high and over the long-term a sound prospect. This coupled with the high financial capacity of Saudi investors and the basic ongoing need for water and power made for a solid future.
Where there has been privatization of water elsewhere in the world, it has almost without exception resulted in a rise in cost to the consumer. The Saudi case — at least for the short-medium term — is an exception. Al-Shehri explained that the tariff for water is “a sovereign decision” and the government would set the consumers tariff. Currently the government subsidy is about 90 percent and to invite private companies to take over revenue collection and limit their income makes the prospect impossibly unattractive.
Running in tandem with the WEP conference is an exhibition with displays of the paraphernalia of the water and power industry. Pipes, pumps and testing equipment jostle for attention but nestling in the interstices of the large companies’ displays are some gems.
There is a jolly 12 cm yellow ball for example that spends its working life pushed along by water flow rolling along pipelines. This attractive squeezable orb hides some complex electronic device that checks for leaks in the pipe and reports their precise location through surface ultrasonic pickups to monitoring devices on the surface. It travels through the pipes listens out for the high frequency hiss that escaping water makes. With a leakage rate of between 33 and 50 percent in the big cities, the Smart Ball could be a popular toy with water engineers. Protruding like an ungainly stork into an aisle is the top end of a street lamp. No ordinary lamp, it uses high intensity LEDs for illumination, is not connected to mains electricity and needs no servicing for its 25 year design life. Even better, it is made in Saudi Arabia and capitalizes on what the Kingdom has in abundance: Sunshine.
Abdulhadi Al-Mureeh, managing director of National Solar Systems, said that the design of the lamp was developed in the King Abdulaziz University for Science and technology to cope with Saudi conditions. “Sunlight we have, but the major problem was heat.
LEDs do not like heat and we had to come up with a combination of light emitters that could tolerate high temperatures and heat-tolerant supporting batteries and electronics.”
The lamps are currently under trial in desert conditions near Hofuf and Riyadh municipality has ordered 600 for trials.
The conference ended yesterday but the exhibition of suppliers to the water industry continues until today.