Saudi Government to Overhaul Water Sector

May 16, 2005

Yesterday in Riyadh, Minister of Water and Electricity Abdullah Al-Hussayen signed two contracts with two international firms as part of a plan to overhaul the Kingdom’s inefficient water sector and prepare it for complete privatization within a decade.

He sighed the first contract worth SR9 million (US $2.4M) with U.S. consultancy firm Booz Allen Hamilton and awarded the second worth SR20 (US $5.3M) million 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 parts of the contract involve evaluating the loss of water through leakage, along with billing and metering, water connections, status of operation, and maintenance in water purification and sewage treatment plants.

According to the minister, Booz Allen Hamilton will draw up plans to transform the water sector through initially engaging private companies in a management lease program. Then in eight to 10 years, he plans on full privatization.

The government anticipates cash infusion of SR60 billion (US $16B) over a 20-year period through privatization of government-owned projects in Riyadh, Jeddah, Dammam, Alkhobar and Madinah.

Regarding the wastage of water, the minister quoted previous studies showing that 30 percent of the total water produced is lost through leakage.

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.

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 (US $6B).

Source: Arab News