JUBAIL, 20 September 2004 — A $2.5 billion bid for a new water and power project has been floated by the Power and Water Utility Company for Jubail and Yanbu (Marafiq) to local and international investors. Industry sources say once the project kicks off it will mark the beginning of privatization of the water and power sector in Saudi Arabia.
According to Marafiq sources, the domestic and international market has responded favorably to the new project and initially a total of 17 local, regional and international companies have responded to the offer. Marafiq short-listed 10 and a final list is expected after the bid is closed on Dec. 15 this year.
The Marafiq’s Independent Water and Power Plant project in its first phase has a capacity to produce 2,400 megawatts of power and 300,000 cubic meters of water per day. In the second phase, the project will produce about 2,000 megawatts of power and about the same quantity of water.
The new project becomes more significant with the plans for the expansion of the Jubail Industrial City, the Kingdom’s main industrial hub. According to industry sources, one factor that makes Marafiq project more lucrative to the investors is its commercial viability and credible owners. The fact that the Marafiq products will not be subsidized makes the proposal more attractive.
It appears that initially Marafiq project will concentrate in Jubail and later extend to Yanbu and then gradually expand its services to other industrial areas. Its target is to eventually reach every household in the country.
According to plans, once the project is commissioned, it will replace the 18,000 megawatts of power being bought from Saudi Electricity Company (SEC) and the 160,000 cubic meters of water from the Saline Water Conversion Corporation (SWCC).
Marafiq was set up in 2000 as a joint stock company with an initial capital of SR2.5 billion. It is owned by four major stockholders: The Saudi Arabian Oil Company (Saudi Aramco), Saudi Basic Industries Corporation (SABIC), the Royal Commission for Jubail and Yanbu and the Public Investment Fund. The four companies together own 99.24 percent share of Marafiq and the rest is shared by seven private investors.
