JEDDAH, 17 April 2006 — Fehaid Al-Shareef, governor of Saline Water Conversion Corporation (SWCC), has emphasized the benefits of privatizing the corporation, saying it would reduce the burden on the state, cut expenditures and improve services.
He said the privatization would encourage the private sector to invest in productive assets, attract foreign direct investment, and create job opportunities for young Saudis.
The Kingdom needs an additional six million cubic meters per day of water and 30,000 megawatts more of power generation capacities over the next 20 years due to population growth and urban development.
“To meet these challenges the government has taken major steps to throw open the market to private investors, so that they could invest in dual-purpose water desalination and power generation projects,” he said.
The Kingdom launched privatization of desal plants last year by awarding a SR9.1 billion contract to a consortium of Saudi and Malaysian companies in order to set up a third desalination plant in Shuaiba, about 100 kilometers southwest of Jeddah.
Shuaiba-3 was one of the four independent water and power projects approved by the Supreme Economic Council, an apex decision-making body chaired by Custodian of the Two Holy Mosques King Abdullah.
Shuqaiq-2, Ras Al-Zour, and Jubail-3 are the remaining projects set for privatization. The four projects will cost SR30 billion.
The private sector will contribute 60 percent of their cost while the state-owned Public Investment Fund (PIF) will have a 32 percent stake and the Saudi Electricity Company (SEC) an 8 percent stake in the four projects.
Shuaiba-3 will supply 194 million gallons of water and 900 megawatts of electricity daily. Work on the project will start Jan. 21 and its first unit will begin production on Oct. 13, 2008. The Shuaiba-3, which is to supply water to Makkah, Jeddah, Taif and Baha, is one of the world’s biggest co-generation projects for the production of water and electricity.
The combined production capacity of the four projects will reach 492 million gallons daily and 4,500 megawatt of power. The four projects will boost the total desalination capacity of the Kingdom by 80 percent.
Saudi Arabia requires SR350 billion in investment for water and sewage projects and SR340 billion for electricity projects in the next 20 years as these sectors grow at an annual rate of seven percent.
