JEDDAH, 17 February — Saudi Arabia is consuming three to eight times more water than the quantities available from its renewable sources and would need to invest SR300 billion ($80 billion) over the next 40 years to meet growing demand in the water and sewage sector, according to one expert.
Dr. Adil Bushnak, member of the consultancy board at the Supreme Economic Council, said the government recovers less than three percent of the actual cost it pays to provide water and sewage services to the people of the country. The money is lost as a result of the low tariffs, flawed collection procedures and substantial water loss from the mains.
This situation represents a real challenge and underscores the compelling need for the speedy privatization of the sector if the economy is to operate efficiently, Dr. Bushnak said in a lecture on the privatization of the water sector. He called for establishment of an independent body that would lay down plans, supervise the projects and monitor the water policy.
"We need to have an independent national water commission to streamline this vital sector and protect the rights of both consumers and suppliers. The commission should seek to review the current tariff and define the technical and financial criteria to be adopted by both the public and private agencies involved in water production and distribution. It should also seek to define a mechanism for market monitoring and controlling to ensure fair competition," he said in the lecture hosted by Jeddah Chamber of Commerce and Industry.
An engineer by profession, Dr. Bushnak chairs the boards of a number of companies involved in water and environment protection. He is a member of Madinah Regional Council, Madinah Water and Sewage Department, JCCI and Jeddah Training Center. He was a founding member of Dar Al-Hikma College, a non-profit institution for girls education. He is a member of the board advising the SEC headed by Crown Prince Abdullah, deputy premier and commander of the National Guard, set up in 1999 to draw the Kingdom's economic policy and oversee the privatization program.
The other speaker at the seminar was Dr. Akil Khawaji, deputy director general of investment affairs at the Royal Commission for Jubail and Yanbu, who stressed the need for privatization as an effective means for raising productivity, ensuring better services and attracting local and foreign capital.
He outlined RC's experience in privatization through the SR2.5 billion Utility company, a joint stock firm recently set up for the operation, maintenance, administration and expansion of power and water utilities in the two industrial cities. The company is expected to invest SR5 billion to SR8 billion during the first five years of operation on water and electricity projects.
Consumption in Jubail is put at 180,000 cubic meters per day of drinking water, 700,000 cubic meters per hour of sea water used for industrial use (cooling) and 114,000 cubic meters per day of sewage, including industrial waste water. In Yanbu, consumption is put at 85,000 cubic meters of drinking water, 400,000 cubic meters of cooling water and 51,000 cubic meters of sewage. Future expansions will add 130,000 cubic meters of drinking water, 500,000 cubic meters of cooling water and 98,000 cubic meters of sewage.
Dr. Khawaji said privatizing the sector would curb the high consumption rates brining them to levels found in areas of similar environments and thus enable supply to cope with the growing demand.
While stressing the need for privatization to create more jobs, increase investments and savings, motivate creativity and encourage competition at the international level, Dr. Bushnak acknowledged such a drive would entail great risks and challenges that have to be addressed.
These include scarce resources vs. high demand, increased threats to water security as a result of an agricultural policy that could further deplete the already meager resources, the colossal amounts of money needed for future investment (SR300 billion until the year 2040), shortage of reliable information and data, shortage of skilled manpower, increased degradation of the environment and the resulting health risks, and the lack of comprehensive and sustained policies governing the water sector.
"There are no ready-made solutions. We have to be patient and try to accommodate with changing trends. The first step should be the creation of a national water commission to maintain a balance between water security and food security. There should also be independent information and monitoring centers to follow up the implementation of these policies."
Dr. Bushnak called for a formula whereby the state would be able to secure the actual water needs for people and animals and sell the extra quantities to help offset the cost and encourage further investments.
