JEDDAH, 29 December 2004 — In a move signaling the beginning of privatization in the water and sewage sector, the Ministry of Water and Electricity has begun evaluating proposals submitted by local and foreign firms for the sector’s development.
The evaluation process is being done in cooperation with leading international consultancy houses; it includes the technical, legal and financial aspects of the offers for the first phase of a massive project calling for conducting thorough, comprehensive and reliable studies on the actual status of the country’s water and sewage networks as well as future demands. The actual start of the first phase has been set for February 2005.
According to the ministry, the Riyadh Region will be the first covered by the project, followed by the Makkah Region (where both Makkah and Jeddah are located), the Madinah Region and then the Eastern Province.
In the 2005 budget, the government allocated over SR17 billion ($4.53 billion) for water, desalination, sewage and dams. The Kingdom is currently carrying out desalination and sewage projects at a total cost of SR29 billion ($7.73 billion).
Analysts have said while the Kingdom’s demand for water is growing rapidly, there has not been a proportionate expansion in existing networks. Many water and sewage treatment plants built in the late 1970s are nearing the end of their capabilities and an increasing population is making the capacity of these plants insufficient to meet demand. They added that government had long realized the need for massive investment to upgrade or replace the existing water desalination plants, water treatment plants and sewage treatment plants and to build new ones to meet the demand for drinking water and sewage treatment.
A staggering SR303.4 billion ($80.9 billion) will be required to expand the water and sewage treatment facilities until the year 2040, according to a study presented at a conference on the future of the Saudi economy. The investments cover the construction of desalination plants, treatment plants and desalination of well water, laying pipelines, water distribution networks, waste water networks and treatment plants and also developing strategic reservoirs and emergency distribution systems.
The ministry said the proposed studies would provide detailed and reliable statistics on the level and leakage and the quantities of water lost from the mains and the level of customer satisfaction with the services provided by the ministry.
The second phase of the project will define the priorities of the water and sewage systems and lay down transitional plans for the privatization of the sector. The first contract with the private sector is expected to be awarded by the end of 2005, the ministry said.
With limited natural water resources, the Kingdom has resorted to well water and the sea to meet demands. It now has more desalination plants than any other country; they are built along the Red Sea in the west and Arabian Gulf in the east. Saudi desalinated water accounts for 30 percent of the world’s total output.
