INTERVIEW: Metito lays out strategy to keep region watered

INTERVIEW: Metito lays out strategy to keep region watered
Illustration by Luis Grañena
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Updated 17 May 2021

INTERVIEW: Metito lays out strategy to keep region watered

INTERVIEW: Metito lays out strategy to keep region watered
  • Rami Ghandour, managing director, explains why Middle East must realize ‘water is not free’

The Middle East’s water challenge is summed up in one stark statistic: The region is home to 6 percent of the world’s population but has just 1 percent of its fresh water.

Rami Ghandour, managing director of global water company Metito Utilities, knows these and similar figures by heart. He can tell you how much of the population of Egypt inhabits water-intensive cities (97 percent) and how much water the Gulf Cooperation Council (GCC) region consumes per capita compared to the US (significantly more).

“I think the first thing is a realization that water is not free. It is something which is quite costly. Therefore, people need to take care of it,” he told Arab News.

Metito has been taking care of water in the region, and the world, for more than 60 years, after its foundation in Lebanon in 1958 by the serial entrepreneurial Ghandour business family whose members are still big shareholders.

It is a world-leading company in the water infrastructure sector, operating sewage, water treatment, and desalination facilities in 46 countries, and is increasingly playing a leading role in the global drive toward more renewable and sustainable use of the world’s resources.

So, is Metito a utility, or an infrastructure company, or an environmental operation?

“You can check all the boxes if you like. Historically, I’d say we were an environmental company in that what we do is desalinate water, supply water to people, treat wastewater and recycle water, both industrial and domestic. Then also more recently we’ve expanded into the renewables energy sector,” Ghandour said.

The Metito group, backed by big investors such as Mitsubishi of Japan and the investment arm of the World Bank, is organized along three business lines: A design and build unit that covers the full spectrum of the engineering, procurement, and construction process, which to date has executed more than 3,000 projects around the world; the utilities and investments division offers project finance, consulting, and management services; while the chemicals unit develops environment-friendly chemicals and specialist treatment solutions for customers.

“We maintain an arm’s length arrangement between the different companies on purpose but are able to develop projects — that is at the heart of what we do — and deliver those to people to enable both environmental improvement and also basic human development and needs,” Ghandour added.

Water — cheap, free, or subsidized — has long been taken for granted in the Middle East, even as the pressure on its supply has increased with rising population, agricultural and industrial usage. Ghandour thinks that mindset has to change.

“There are obviously jurisdictions in the region, including here in the UAE, where full market price is being charged, full cost recovery and taxes are being charged. But there are other areas where there are heavy subsidies in place and that does result in encouraging wasteful behavior,” he said.


BIO

BORN: Beirut 1975

EDUCATION

  • Master’s degree in chemical engineering from the University of Cambridge
  • MBA in finance and entrepreneurial management from Wharton Business School

CAREER

  • Process engineer, Bechtel London
  • Management consultant, Boston Consulting Group, New York
  • Managing director, Metito Utilities
  • Director, Metito Group

Public education programs — such as encouraging people to turn taps off and wash the car less frequently — obviously play a part in public awareness, but the bigger challenges are more structural.

For example, the biggest consumer of water in the region is not personal domestic consumption, but agriculture.

Governments — including that of Saudi Arabia — have had some success in encouraging more efficient use of water for farming, and new technologies such as hydroponics and vertical farming can also encourage optimal use of water resources.

Some countries too have taken a more radical approach, buying farmland in other parts of the world with better water supply, growing food there, and then importing it back to the Gulf.

But Ghandour pointed out that there were other simple and effective ways to optimize water efficiency. Leakage and water theft were big problems in some countries. “People are just helping themselves and there isn’t the regulation and the enforcement to make sure that it’s not a problem,” he added.

Reuse of water was also an area of great potential. The example here was Singapore, which has made great strides toward reusing water in the domestic, industrial, and agricultural sectors.

In the Gulf, one of the sights that sets environmentalists’ nerves on edge was the liberal use of precious water on golf courses or green public spaces, in areas that would naturally be arid desert.

However, Ghandour noted that an increasing proportion of that was recycled water that may not be fit for human consumption, but which was perfectly acceptable for irrigation. Dubai, for example, has a groundbreaking wastewater recycling facility which offers users two taps for different water uses.

Metito is bidding in a project in Botswana in Africa where wastewater is directly recycled back into the consumption and drinking water systems, one of only two in the world that does that.

The company was also looking at the technology behind a pioneering project in California which recycles wastewater directly into the underground aquifers that feed water back into the consumption cycle.

But even if the region optimizes its usage, prevents leakages, and adopts efficient pricing mechanisms, there will always be a need for desalination in a part of the world as arid as the Arabian Gulf.

Desalination has been the mainstay of the basic infrastructure that has allowed the region to enjoy high rates of economic growth over decades, but it has also come under fire from environmentalists, for two reasons: The use of carbon fuels such as oil and gas in the expensive process of turning sea water into usable water; and the extra brine — salty water — expelled into the sea as a by-product.

Ghandour said the second objection was less of a significant factor, pointing out that the Arabian Gulf and Red Sea were open tidal seaways, and also that some desalination facilities in the UAE have been built on the Indian Ocean side of the country, allowing brine to disperse into a wider body of water.

The use of hydrocarbon fossil fuels to produce water was a different matter.

“I would decouple the power issue from the desalination. The good news is that the renewables business model has become much more competitive. Renewable power today is often below the cost of fossil fuels power,” he added.

The megaprojects of Saudi Arabia were the perfect testing ground for this new model. Metito is involved in two solar-powered desalination facilities in the NEOM development, which mix renewable power with sources from the national grid, and it has also won a contract for a huge desalination plant in the industrial zone at Jubail in the Eastern Province. Ghandour hinted that other big Saudi contracts were in the offing.

There are also huge Metito projects on the other side of the Red Sea, in Egypt, including an ambitious plan to irrigate the Sinai desert with treated water pumped under the Suez Canal.

Saudi Arabia’s need for clean, efficient, and reusable water was likely to increase exponentially over the next decade. For example, in addition to the megaprojects such as NEOM and Qiddiya outside Riyadh, there are massive plans to double the size of the Saudi capital by 2030, as well as an initiative to plant 10 billion trees in the Kingdom to help mitigate carbon emissions. Does Ghandour think these ambitious plans are feasible, from the viewpoint of a water expert?

He noted that the way Saudi Arabia and other Gulf countries had gone about the task was encouraging, with increasing private sector investment. “I would argue that is typically the most efficient way to deliver these projects with very strong environmental compliance standards in place,” he said, with one eye on the higher standards now required by international private sector investors in line with ESG (environmental, social, and governance) standards.

“It has put everybody in the mindset of the ESG priorities that are there, so everybody is looking at doing projects in a manner that is sustainable, and definitely the Saudis have been very much involved in that,” he added.

And does he think the Kingdom will have the capacity to water all those trees?

“I don’t have the specifics on the plan to irrigate those trees, but I’m sure as an outsider I would say yes. Additional desalination capacity is being implemented at a high rate with these public private partnership projects.

“So, additional sources of water are there, and I go back to the wastewater that can be reused, which is perfect for irrigating trees. There is today a lot of wastewater that is effectively thrown away in the Kingdom. So, it’s something where reuse would be of a significant environmental benefit,” he said.


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Updated 23 June 2021

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RIYADH: Saudi Arabia’s finance minister has issued the necessary license for STC bank and Saudi digital bank, both under establishment, the Saudi cabinet said in a statement on Tuesday.

Developing...


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Updated 22 June 2021

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  • Program aims to support small and medium-sized enterprises still struggling due to the pandemic
  • More than 106,000 contracts have benefited since it was launched in March 2020 with a value of approximately SR167 billion

RIYADH: The Saudi Central Bank (SAMA) announced on Tuesday that it is extending a deferred payment program for a second time to help support small and medium-sized enterprises (SMEs) that are still struggling during the coronavirus (COVID-19) pandemic.
SAMA said the program — one of the bank’s initiatives to support private sector financing — will be extended for another three months from July 1 through Sept. 30.
The move is part of SAMA’s role in maintaining the stability of the financial sector, enabling it to promote economic growth and maintain employment levels in the private sector, especially within micro enterprises and other SMEs.
More than 106,000 contracts have benefited from the program since it was launched in March 2020 while the value of the deferred payments for those contracts has amounted to approximately SR167 billion ($44.5 billion).
SAMA has also offered a secured financing program for SMEs as more than 5,282 contracts have benefited from that program with a total financing value of more than SR10 billion, the bank said in a statement.
These programs are meant to support the private sector and the levels of liquidity in the financial sector. They enable financing agencies to provide support while mitigating the economic and financial effects on the SME sector, the bank said.
This is the second time SAMA has extended the two programs to support SMEs. It renewed the deferred payment program for three months last March, while it also extended the guaranteed financing program for an additional year until March 14, 2022.


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Updated 22 June 2021

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DUBAI: Beirut has become the most expensive city for expats in the Middle East and North Africa region, and the third globally, based on the latest “Cost of Living” survey by consultancy Mercer.
Jumping 42 places in global rankings, Beirut has been at the center of Lebanon’s economic and political collapse, aggravated by the COVID-19 pandemic and the port explosion last year.
Living in the Lebanese capital as an expat has now become more expensive than living in Tokyo, Zurich, or Shanghai. Turkmenistan’s Ashgabat ranked first, in the list of most expensive cities for expatriates, followed by Hong Kong.
Mercer comes up with the annual list by comparing the cost of more than 200 items in each city, including housing, transportation, food, clothing, household goods and entertainment.
Riyadh has become the most expensive city in the Gulf at 29th globally. Jeddah ranked 94th, the report showed.
Dubai dropped to 42nd in the list, down from 23rd last year, and Abu Dhabi ranked 56th from 39th a year earlier.
Other cities in the Gulf also became more affordable this year, the report revealed, with Bahrain dropping to 71st from 52nd, while Muscat fell to 108th from 96th. Kuwait City dropped two places to 115th and Qatar at 21 places to 130th.


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DUBAI: Dubai Municipality has become the first government agency in the UAE to approve job titles for remote work, state news agency WAM has reported.
Remote work can now be done under normal circumstances, the department said, parallel to its other work setups such as its shifting system.
The move comes as the COVID-19 pandemic has made private, and even public, workplaces rethink ways to continue their operations despite the crisis.
Workplace innovation is not new to Dubai Municipality, as it pioneered flexible work systems for government departments in the UAE in 2007.
The pandemic has also made the municipality accelerate its smart transformation, to make the remote work system effective.


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Updated 22 June 2021

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  • Tuesday’s expansion is in addition to the company’s previously announced plan to invest $1.4 billion in 2021 alone to expand its manufacturing capacity

SINGAPORE: Chipmaker GlobalFoundries said on Tuesday it will spend $6 billion to expand capacity at its factories in Singapore, Germany and the United States amid a chip shortage that is hurting automakers and electronics firms globally.
The US-based company, owned by Abu Dhabi’s state-owned fund Mubadala, said it will invest more than $4 billion in Singapore, and $1 billion each in the others over the next two years. The unlisted company’s Singapore operations contribute about a third of its revenue.
“I think the next five to eight years, we’re going to be chasing supply not demand as an industry,” GlobalFoundries CEO Thomas Caulfield told a media briefing. He added that the company was prioritising automotive customers.
Tuesday’s expansion is in addition to the company’s previously announced plan to invest $1.4 billion in 2021 alone to expand its manufacturing capacity.
The chip shortage, which began in earnest in late December, was caused in part by automakers miscalculating demand for semiconductors in the pandemic. It was aggravated by electronics manufacturers placing more chip orders as work-from-home practices fueled a surge in sales of computers and other devices.
Large chipmakers including Intel Corp. have warned that the shortage will last well into next year. Intel announced in March a $20 billion plan to expand its advanced chip making capacity, while Taiwan’s TSMC said in April it will invest $100 billion over the next three years.
As well, governments, including those of the United States and Japan, have intervened to urge faster supplies. Earlier this month, the United States approved $54 billion in funds to increase US production and research into semiconductors and telecom equipment.
Caulfield said funding for GlobalFoundries’ expansion plan included investments from governments and pre-payments from customers.
The $4 billion investment in Singapore is the first of a phased expansion program planned by the company for the next five to 10 years, the CEO said. He did not specify a total amount.
The new Singapore fab will add capacity of 450,000 wafers per year, taking the campus’s total to 1.5 million, and the company expects to begin production in early 2023. Most of the added production will come online by end 2023.
The factory will make chips for cars and 5G technology, with long-term customer agreements already in place. It will add about 1,000 jobs in Singapore.