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JEDDAH — The Council of Ministers on Monday adopted some key regulations aimed at boosting the water and electricity distribution system in the Kingdom.
The weekly session of the Cabinet, chaired by Custodian of the Two Holy Mosques King Salman at Al-Salam Palace, took the decision in line with the recommendations of the Council of Economic and Development Affairs (CEDA).
In a statement to the Saudi Press Agency following the session, Minister of Culture and Information Awwad Al-Awwad said that the Cabinet decided to expand the scope of work of the Saudi Water and Electricity Company (WEC), in its capacity as the main buyer of water, so as to include the purchase of desalinated, purified, treated and untreated water.
It is noteworthy that WEC was established in 2003 as a limited liability company by virtue of a decision of the Supreme Economic Council in June 2002 to work as an independent entity to buy water and electricity from companies that will own projects for the production of water and electricity.
The entity then sells water to the Saline Water Conversion Corporation (SWCC) and electricity to the Saudi Electricity Company (SEC).
WEC, with a paid up capital of SR30 million, is equally owned by SWCC and SEC.
The Cabinet entrusted minister of environment, water and agriculture, and minister of finance to take necessary legal procedures to transfer the full ownership of WEC to the government, and conclude agreement on its corporate governance as well as on projects contracted by WEC. Both ministers have also been tasked to take the necessary measures, through an agreement between them, to establish a balancing fund to offset the deficit resulting from the difference between the projected income from the water sector on commercial basis, and the real income achieved by the officially approved tariff.
The Cabinet also approved that the minister of finance shall provide the necessary credit support to WEC to support its financial position in order to enable it to sign long-term purchase contracts within the framework stipulated in an earlier Cabinet decision, in accordance with the terms and conditions specified by the minister.
Al-Awwad said the Cabinet lauded the new 10-point programs, worked out by the Council of Economic and Development Affairs (CEDA) and its strategic importance for the government in achieving the Kingdom’s Vision 2030.
The Cabinet noted that these programs have been devised to complement the National Transformation Program of 2020 to make the Kingdom’s economy more prosperous and its society more vibrant.
© The Saudi Gazette 2017
