Oman’s water authorities anticipate a downtrend in potable water demand growth in the coming years, fuelled in part by the current adoption of a revised tariff structure that seeks to achieve a phased, multi-year rollback of subsidy on water consumption.

Nama Power & Water Procurement Company (PWP), the country’s sole buyer of power and water output, citing estimates provided by Nama Water Services (previously Oman Water & Wastewater Services Company), likens the decline in average demand, in volume terms, to the equivalent of the capacity of a midsize desalination plant.

“Nama Water Services expects a decline in the average water demand in the coming years compared to those expectations in the previous statement, and this decline in the average demand for water is expected to reach 82,000 m3/d in 2028,” Nama PWP said.

“This expected decline was due to the changes in some assumptions on which the projections were based, including the decrease in the average water consumption per capita resulting from the tariff change, in addition to the expected improvement in the water losses rates,” the procurement agency – part of Nama Group - noted in a recent report.

Under wide-ranging reforms adopted by the Omani government to rein in soaring public debt amid the most recent oil price collapse, new tariffs for potable water consumption came into force starting in 2021 across all consumer segments: residential (Omanis and non-Omanis), non-residential (commercial and government). The increase has been phased over multiple years through 2024, and for Omani residential consumers through 2025, with the goal to phase out subsidy support for the sector. (A safety net has been put in place to mitigate the impacts of the higher tariffs on low-income categories).

According to PWP, average water demand in 2022 amounted to 1.041 million m3/day within the Main Integrated System (MIS), which covers consumers in the Governorates of Muscat, Batinah South, Batinah North, Al Dakhiliyah, Al Buraimi, and Al Dhahirah. It has grown by about 8 per cent over the previous year. In comparison, average water demand is projected to rise to 1.225 million m3/day in 2029, representing an increase of a mere 2 per cent over this timeframe.

However, to ensure there is enough capacity to meet even ‘high-case’ demand growth scenarios and other contingencies, as well as offset capacity falling out of contract, PWP – based on guidance provided by Nama Water Services – has drawn up tentative plans for the procurement of new capacity.

It includes a provisional plan for the procurement of a new Independent Water Project (IWP) of about 68,000 m3/day in Salalah to support the requirements of Nama Dhofar Services – the water utility serving Dhofar Governorate. Dubbed ‘Dhofar Water IWP 2027’, the new project will offset capacity shortfalls when the current Salalah Independent Water & Power Project (IWPP) reaches the end of its supply contract with PWP.

Furthermore, in anticipation of the conclusion of the Barka II IWP contract in 2024, PWP foresees the need for a new IWP to cover the deficit. “Accordingly, PWP will follow the approved procurement strategy by the Authority for Public Services Regulation (APSR) to procure a capacity of 100,000 – 120,000 m3/d for COD in Q2 2024,” said PWP in its report.

As reported by the Observer on August 21, 2023, PWP is also reviving a proposal to harness rainwater runoff stored in the massive Wadi Dayqah reservoir for potable water and irrigation water supply.

Additionally, desalination capacity will also be augmented when three under-construction IWPs come on stream over the next couple of years: Qurayyat IWP, which is currently producing 180,000 m3/day pending a ramp-up to 200,000 m3/day when it achieves its Commercial Operation Date (COD); Ghubrah III IWP, under construction with a capacity of 300,000 m3/day, is due to launch in 2026; and Barka V IWP, also under construction, will launch next year with a capacity of 100,000 m3/day.

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