RIYADH, 15 May 2005 — Minister of Water and Electricity Abdullah Al-Hussayen yesterday signed two contracts with two international firms as part of a strategic move toward overhauling the Kingdom’s wasteful water sector and preparing it for complete privatization within a decade.
The first contract worth SR9 million was signed with US consultancy firm Booz Allen Hamilton and the second worth SR20 million was awarded to French firm Veolia. The duration of the two contracts is six months and 11 months respectively.
Addressing a press conference, the minister said the contract with Veolia calls for carrying out a full audit of the network and service situation in Riyadh covering both aspects of production and demand and its effect on the treatment plants. The main components of the contract involve evaluating the loss of water through leakage as well as billing and metering, water connections, status of operation and maintenance in water purification and sewage treatment plants.
“Hopefully, this will set the stage for public-private partnership,” Al-Hussayen said.
Booz Allen Hamilton will draw up plans to transform the water sector through engaging private companies initially in a management lease program and in eight to 10 years a fully-fledged privatization, the minister said.
The government anticipates cash infusion of SR60 billion over a 20-year period through privatization of government-owned projects in Riyadh, Jeddah, Dammam, Alkhobar and Madinah.
Referring to the wastage of water, the minister quoted previous studies which showed that 30 percent of the total water produced is lost through leakage. “Even if we assume, on a conservative estimate, that 20 percent of the water is lost through leakage, we are talking about a loss of one million cubic meters a day. This has a huge price tag.”
Al-Hussayen referred to his ministry’s water conservation measures. The ministry had contacted mosques as part of its study for the detection and prevention of leakage and had distributed 1.8 million kits to as many houses and apartments as part of the water conservation drive. The number will reach 3.5 million kits over the next eight months marking the end of the Hijra year.
The third phase of water conservation will cover public buildings, including hotels, hospitals, mosques and schools, where 500,000 kits have been distributed out of the targeted five million for these buildings.
“If we succeed in carrying out conservation in households and networks, we will be saving 50 percent of our supply,” he added.
The minister also referred to new projects including four giant independent water and power producers (IWPPs) — Shuaiba Phase-3, Shuqaiq Phase-2, Ras Al-Zour and Jubail Phase-3 — which are estimated to cost SR23 billion.
