Saudi Arabia Water Report Q3 2012

A steady stream of tenders and contracts should be awarded across the remainder of 2012, with activity heavily skewed towards the wastewater sector, where the National Water Company (NWC) is in the midst of a major investment programme to ramp up treated effluent capacity. According to NWC, some US$1.8bn will be spent on contract awards in 2012 – geared towards wastewater treatment plants and pipeline networks. A rollout of new desalination capacity is anticipated over the forecast period, with a large existing slate of new plants currently under construction.

The key themes to highlight in Saudi Arabia’s water sector are:

• With a slew of new contracts expected to be awarded by National Water Company (NWC) over 2012 and beyond, Saudi Arabia is set to emerge as the world’s most prominent water project market. This confirms its status as an accommodating location for developers and contractors to do business, with foreign investors increasingly drawn to the attractive business environment.
• International companies have been invited to manage and operate water and wastewater contracts in major cities, having generated significant local goodwill following an improvement in water provision in recent years. Under a shift in approach, NWC’s newly fashioned O&M contracts are expected to be replaced with longer-term contracts which will offer services to Riyadh, Jeddah, Mecca, Ta’if, Medina and Dammam.
• Contractors had until mid-May 2012 to submit bids for a SAR1bn contract to build a 500,000 cubic metres per day (m3/d) sewage treatment plant at Jeddah’s international airport. Furthermore, Saudi Aramco’s 24,000m3/d wastewater treatment at the Jeddah oil refinery is now scheduled for completion in 2015. Commercial bids were submitted by contractors in mid- April 2012.
• In late April 2012, NWC completed the draining of the lake at Alasla Valley southeast of Jeddah, draining 2.5 million square metres ahead of schedule. Meanwhile, the Shura Council approved a draft agreement between the Japanese and Saudi governments on water management and sewage maintenance systems in mid-May 2012. The agreement is understood to cover desalination, water distribution and control, as well as reducing the number of leaks and wastage.

The world’s largest producer of desalinated water will see a substantial increase in output over the next four to five years. Under BMI’s water forecast scenario, we expect desalinated water production to rise from 1.29bn m3 in 2012 to 1.49bn m3 by 2016, the result of various major new plants coming onstream under the government’s ambitious independent water and power project investment programme. This 200m m3 rise in desalination capacity should help the authorities to head off an increasingly thirsty population. In tandem with the increase in capacity, BMI anticipates a precipitous rise in the number of connected users to the water grid. We see the number of subscribers growing by over 100,000 by 2016 from the current level of 923,000. All this means there will be little scope for complacency as Riyadh charts its way to a future where demand will continue to be robust.

Water Report of Saudi Arabia Q3 2012

Published: June 2012                              No. of Pages: 53                          Price: US $ 1175  
                               


Table of Contents

Executive Summary ... 5
SWOT Analysis 6
Saudi Arabia Water Industry SWOT .. 6
Saudi Arabia Political SWOT . 7
Saudi Arabia Economic SWOT .. 8
Saudi Arabia Business Environment SWOT 8
Market Overview .. 9
Domestic Competitive Landscape 9
Pricing Mechanisms and Regulatory Framework .. 14
Tariffs 14
Regulatory Framework 14
Sectors .. 16
IWPP.. 16
Wastewater Treatment . 17
Water Systems/Pipelines .. 19
Major Projects 21
IWPPs 21
IWPs .. 23
Water And Sewerage Networks .. 23
Wastewater Treatment . 23
Key Projects . 25
Table: Major Projects – Water .. 25
Industry Forecast . 27
Table: Key Data, Water Industry, 2009-2016 27
Table: Water Data by City (''000 cubic metres), 2002-2006 . 28
Regional Risk Reward Ratings ... 29
Table: Regional Infrastructure Risk/Reward Ratings. 34
Macroeconomic . 35
Table: Saudi Arabia – Economic Activity, 2011-2016 ... 37
Company Profiles 38
ACWA Power International ... 38
Suez Environnement . 40
Veolia Water 42
BMI Water Forecast Modelling ... 44
How We Generate Our Industry Forecasts 44
Infrastructure Risk/Reward Ratings . 45
Table: Infrastructure Business Environment Indicators . 45
Project Finance Ratings... 46
Table: Design And Construction Phase . 48
Table: Commissioning And Operating Phase – Commercial Construction.. 49
Table: Commissioning And Operating Phase – Energy And Utilities 50
Table: Commissioning And Operating Phase – Transport . 51Table: Major Projects – Water . 25
Table: Key Data, Water Industry, 2009-2016 . 27
Table: Water Data by City (''000 cubic metres), 2002-2006 . 28
Table: Regional Infrastructure Risk/Reward Ratings. 34
Table: Saudi Arabia – Economic Activity, 2011-2016 . 37
Table: Infrastructure Business Environment Indicators . 45
Table: Design And Construction Phase . 48
Table: Commissioning And Operating Phase – Commercial Construction. 49
Table: Commissioning And Operating Phase – Energy And Utilities . 50
Table: Commissioning And Operating Phase – Transport . 51