JEDDAH, 30 September 2006 -- Saudi Arabia yesterday announced plans to establish a national water company to carry out water and sewage projects. The state-owned company will take over the groundwater sector, the distribution of drinking water and the collection and treatment of sewage water.
The decision to restructure the ground and sewage water sector was taken by the Supreme Economic Council, chaired by Custodian of the Two Holy Mosques King Abdullah.
The formation of the new company, which will carry out its operations on a commercial basis, is expected to boost the sector's overall performance.
Water and Electricity Minister Abdullah Al-Hussayen said the new water company would start its operations within four months after its formation. "The company will provide all services related to ground water sector, distribution of drinking water, and collection and treatment of sewage water on a commercial basis," the minister said.
The new company would float part of its shares for public subscription through a public offering at a suitable time, the Saudi Press Agency quoted the minister as saying.
Economist and Shoura Council member Ihsan Buhulaiga welcomed the SEC decision to restructure the ground water and sewage sector and said it would improve water services across the country.
He said the drinking and sewage water sector in the Kingdom required a lot of investment. "Major Saudi cities are lacking sewage facilities," he pointed out.
Buhulaiga hoped that the new company would be able to address the Kingdom's water and sewage problems within the next 10 to 20 years.
The restructuring of the water sector and the formation of a national water company are significant as major cities like Jeddah and Madinah are facing water shortages.
The water crisis in Jeddah has reached its peak with thousands of people gathering at the water distribution center in Aziziya to buy water truck deliveries after regular pipeline supply stopped weeks ago.
According to local press reports more than 15 residential districts in Jeddah have been without water for over a month, sending many of the residents to the black market where -- for a premium fee -- they could have water delivered to their cisterns.
Ramadan is a peak season for domestic water consumption as families spend more time at home. A rise in demand for water leads to water cuts in many parts of the city, leaving residents scrambling to obtain a water truck from somewhere in order to fill the tanks in their buildings. "When the new plant in Shuaiba becomes operational in two years the water crisis in Jeddah will be solved once and for all," said minister Hussayen.
Saudi Arabia is the world's largest producer of desalinated water. But the demand for water is increasing day by day as a result of growing population.
The Kingdom will require nearly SR350 billion in investment for water and sewage projects during the next 20 years.
The ministry launched a drive to privatize desalination plants in November 2005 by awarding an SR9.1 billion contract to a consortium of Saudi and Malaysian companies that will set up the Shuaiba-3 plant.
By P.K. Abdul Ghafour
© Arab News 2006
