International Water Companies Look to Tap Saudi Arabia
The Middle East and North Africa markets are some of the most attractive for waste water solutions. That was the consensus among panellists at the MENA Business Forum held during the recent Singapore International Water Week on 28 June to 2 July 2010. While panellists agreed that the entire MENA region is experiencing phenomenal demand for waste water reuse and recycling facilities, Saudi Arabia was highlighted as the market showing most potential.
The forum bought together policymakers, industry leaders, experts and practitioners to address the issue of adequate water supply and management across the MENA region. In addition, model cities and innovative water solutions that enhance economic value while addressing environmental challenges were presented during the session.
Among them was Mr Montazar Muhalhal, Executive Director of the Corporate Strategy & Planning Division at the government-owned National Water Company, Saudi Arabia. He discussed plans to improve operational and maintenance services across the Kingdom’s water networks in an effort to reduce the volume of water and revenues lost to leakage. In Riyadh about 60 percent of the city’s valuable water supply is lost through leakage in the 10,000km of pipes that transport water to the city’s 4.5 million population. National Water Company hopes to reduce that to a more sustainable 20 percent.
In September 2009, National Water Company appointed PUB Consultants Pte Ltd (PUBC), a wholly owned subsidiary of PUB, Singapore’s national water agency, as the independent auditor for the performance-based management contract for Riyadh City Water and Wastewater Services. Over the next six years, PUBC supported by project consultants CDM will assess the performance of the management contractor of Riyadh City Water and Wastewater Services who oversees the entire production and distribution of water supply in the capital city as well as the collection, treatment and disposal of waste water. As part of its role PUBC will conduct regular audits, determine performance payment incentives and withholdings and act as a facilitator between National Water Company and the management contractor in cases of disputes.
Paddy Padmanathan, CEO of ACWA Power International explained that the breakneck pace of economic development and population growth in the Middle East and North Africa has exacerbated the region’s existing problems of water scarcity and wastewater disposal. In response, many countries are embracing reform. Governments are increasingly turning to the private sector to meet their needs, leading to an abundance of business opportunities, particularly in Saudi Arabia.
Given their location in one of the most water-stressed regions of the world, MENA countries need to look at solutions beyond simply maximizing water supply and productivity. Largely dependent on energy-intensive seawater desalination plants, local governments are increasingly looking to the private sector to build and operate waste water treatment, reuse and recycling facilities and address inefficiencies in existing water operations.
According to Mr Syed Amir Basha, Senior Vice President at water and environmental company Moya Bushnak, Saudi Arabia has the biggest market potential for reuse water facilities because it has the land capacity and the willingness to invest in these projects at a country level. However, he said governments also need to get more involved in encouraging people and industry to use recycled water.
“Government policies need to support the use of waste water if it is to reach its full potential as another water source.”
With governments acutely aware of the water challenges they face, privatization of water infrastructure is increasing. All cities in the MENA region have embraced public private partnerships and projects are gaining pace.
Singapore companies are among the top international players pioneering water projects within the GCC markets. According to Mr Sam Ong, Dy Group CEO, Hyflux Limited, it is Singapore’s integrated solutions approach to water management that is proving most successful.
“We are finding that our GCC clients want us to invest in the project, build it, then manage and operate the plant with a guarantee of planned efficiencies. This is the Hyflux business model so we are a good match for what the market needs.”
Other Singapore companies actively pursuing water projects in the GCC include Sembcorp who announced during SIWW a Memorandum of Understanding (MOU) with the Abu Dhabi Water and Electricity Authority (ADWEA) in the UAE to develop and build a new seawater reverse osmosis facility with potable water production capacity of around 30 million imperial gallons per day (MIGD). The company already has water and power interests in Fujairah and Salalah in Oman.
Salcon, a subsidiary of Boustead, a leading global specialist in water and wastewater engineering also announced last week it has been awarded a AED55 million contract to design, engineer and construct a new water recycling plant for the enhanced treatment of treated sewage effluent in Abu Dhabi. The contract for Al Wathba Enhanced Treated Sewage Effluent Treatment Plant was awarded by Abu Dhabi Sewerage Services Company.
IE Singapore, an agency under the Ministry of Trade and Industry, is the lead agency spearheading the development of Singapore’s external economic wing. With the mission of promoting the overseas growth of Singapore-based enterprises and international trade, the group is working closely with PUB and the Economic Development Board to help Singapore water companies grow their businesses in Saudi Arabia.
“Singapore companies have been prequalified for a number of projects and participated in several expressions of interest (EOI) and requests for qualification (RFQ) in Saudi Arabia. It is a market in which Singapore companies are keenly looking at opportunities,” said Mr Tan Kok Tian, Deputy Director (Business Development), Industry Development Department, PUB.
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