Saudi awards contracts to mend leaking water mains

Minister Al Hussayen aims for complete privatisation of water sector within eight to 10 years

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By  Conrad Egbert Published  May 21, 2005

KSA Minister of Water and Electricity, Abdullah Al-Hussayen, has signed two contracts with two international consultants, as part of a strategic move toward overhauling the kingdom’s wasteful water sector. This will pave the way for privatisation within a decade. The first contract — worth US $2.4 million (SAR9 million) — was signed with Booz Allen Hamilton; and the second —worth $5.3 million (SAR20 million) — was awarded to French firm Veolia. The duration of the two contracts is six months and 11 months respectively. According to reports, the minister said Veolia will carry out a full audit of the network and service situation in Riyadh, covering production, demand and its effect on the treatment plants. One of the main components of the contract involves evaluating the loss of water through pipe leakage. It also involves other factors such 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 programme, and in eight to 10 years, with a fully-fledged privatisation, the minister said. The government anticipates a cash injection of $16 billion (SAR60 billion) over a 20-year period through privatisation of government-owned projects in Riyadh, Jeddah, Dammam, Alkhobar and Madinah. 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% of our supply,” he added. Referring to the wastage of water, the minister quoted previous studies, which showed that 30% of the total water produced, is lost through leakage. “Even if we assume, on a conservative estimate, that 20% of the water is lost through leakage, we are talking about a loss of one million m3 a day. This has a huge price tag.” 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. These are estimated to cost $6.1 billion (SR23 billion).

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