RIYADH, 23 July 2006 — In line with the Kingdom’s privatization program, the Ministry of Water and Electricity signed yesterday five consultancy contracts worth SR23.4 million for privatizing water and wastewater management in Riyadh.
Abdullah Al-Hussayen, minister of water and electricity, who inked the accords with representatives of companies selected for the project, told newsmen that this is the first phase of the ministry’s privatization program which would be extended to Jeddah, Madinah, and Dammam in the subsequent months.
“We have chosen these four major cities since they use 50 percent of the water consumed in the Kingdom,” said the minister. “The project comes through the ministry’s efforts to improve the performance in water and wastewater sectors by providing enhanced services to customers with the technical support of several international specialized companies.”
He pointed out that these companies will assist in the process of issuing the proposed Public Private Partnership (PPP) contracts to manage, operate and maintain the water and wastewater services in the capital.
According to the agreement, these signatories would also assist in the prequalification process of international companies that are bidding for the PPP project.
“Several international specialized companies from France, Germany, Singapore and Japan have shown interest in participating in water and wastewater services projects in the Kingdom,” he said.
Only half of the wastewater is treated in the Kingdom; this could increase to 85 percent in the coming two years if ministry projections are accurate.
The first contract was signed with Fichtner in cooperation with Price WaterhouseCoopers for SR5 million to lead the process of issuing the Riyadh city privatization contract and preparing assets transfer plan from the General Directorate of Riyadh region.
The German company will review the current financial regulations and propose suitable amendments in accordance with the sectors’ privatization requirements.
The second contract was signed with the Law Firm of Yousef and Mohammed Al-Jadaan in cooperation with Clifford Chance LLP for the value of SR3.5 million to provide legal consultancy services. The scope of work includes reviewing the current legal regulations, legal due diligence, propose and draft the necessary legal amendments and assist the ministry in drafting the PPP contract to manage Riyadh city water and wastewater operations and complete legal procedures.
The third contract was signed with Halcow Group Ltd., for the amount of SR4 million to provide technical consultancy services. The scope of the work includes preparing the prequalification documents for the international companies bidding for the Riyadh city PPP contract and prepares a prospectus for operation and maintenance.
The fourth contract with Ernst and Young Consulting, valued at SR7.8 million, is to provide human resources consulting services. The area would include consultancy in human resources.
The final contract was signed with ILF Consulting Engineers for the amount of SR3 million to carry out a feasibility study to establish wastewater treatment plant in the city which would be managed by the private sector on a build-own-operate basis with a treatment capacity if 400,000 cubic meters per day. The wastewater plant tendering process is expected to start next year.
