Saudi Arabia targets wastewater sector for further privatisation

The kingdom has a plan to raise more than 50bn riyals from the sale of stakes in state-controlled entities over five years

FILE PHOTO: Saudi Minister of Finance Mohammed al-Jadaan speaks during a media conference with Saudi Arabia's central bank governor Ahmed al-Kholifey, in Riyadh, Saudi Arabia, February 23, 2020. REUTERS/Ahmed Yosri/File Photo
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Saudi Arabia’s National Water Company is inviting private sector participation in the building and running a series of new wastewater treatment plants across the country.

NWC is issuing tenders inviting private firms to participate in developing 114 sewage treatment plants with a total capacity of 5.1 million cubic metres per day, as part of its 2030 National Water Strategy.

NWC in its initial phase will procure contracts for 15 sewage treatment plants under five contracts, which account for 2.5 million cubic metres per day, or half of the treatment capacity in Saudi Arabia, the company said on its website.

The contracts will cover four plants in Riyadh, two in the Makkah region, two in the Jeddah governorate, two in Taif and one each in the Arar, Turaif and Sakaka, Northern Borders and Al-Jouf regions.

A request for proposals for the first contract will be issued in the current quarter, with the others to follow, NWC said.

"As well as operations and maintenance, the scope of the five contracts will cover rehabilitation, operational improvements and capacity increases," the company said.

Saudi Arabia, the Arab world’s biggest economy, is planning to sell stakes in public entities in various sectors as part of broader plans to diversify the kingdom’s revenue base and bring more efficiency to state-owned organisations.

NWC was set up as a semi-private entity to manage the kingdom's water assets in 2003 and has since agreed a series of deals with private sector consortiums, allowing them to build and run water assets in the kingdom through offtake agreements for their output.

Saudi Arabia’s efforts to build water, power and sewage sector projects with private consortiums have so far been a “successful journey”, Mohammed Al Jadaan, the kingdom’s finance minister, said in a webinar last week.

The kingdom is now targeting more assets in the water sector for privatisation and plans to bring other, “mature assets in [the] form of companies” to the capital market, Mr Jadaan said.

“There are few of them that are in the pipeline for 2020-21. I can’t disclose them because some of them have filed with the regulator and a few of them are at an advance stage,” he said.

Privatisation is a key plank of Saudi Arabia’s Vision 2030 economic diversification agenda. The kingdom raised close to $30bn (Dh110.1bn) from the sale of shares in Saudi Aramco, the world’s largest oil producing company, late last year. The listing on the Tadawul stock exchange was the biggest initial public offering in the world.

Earlier this year, the kingdom also sold a stake in two grain mills and two more assets are being offered to private investors in the same sector.