Boston, MA -- (SBWIRE) -- 12/22/2012 -- BMI View: There is a clear impetus for improving the Kingdom's water and sewage supply performance, particularly in the main cities of Riyadh and Jeddah. The latter's water infrastructure has been neglected and is due for some favourable treatment from the public purse. The big spend announced for new water connections in the capital - with around US$560mn committed - comes in response to water shortages experienced during the summer of 2012. The authorities are unwilling to let these instances recur, which represents a marked shift in strategy and one that can clearly be attributed to the government's heightened sensitivity to public displeasure at poor public service provision.

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

- Major water project sponsor National Water Company (NWC) is planning to spend a hefty SAR2.1bn (US$500mn) on new water extraction and supply facilities to service the Riyadh area. All of this comes under a fast-track programme that could result in the construction of 25 new treatment plants and a clear reaction to the spate of water shortages that hit the capital in 2012.
- Saudi Arabia will cement its reputation as the most active of the Gulf's water markets, given the willingness of utilities there to dig deep into corporate coffers and spend on new plant and infrastructure. The urgency of meeting self-imposed targets on water provision suggests there will be little scope for the NWC or other authorities to bargain hard on terms..
- Riyadh is primed to dominate Saudi Arabia's water project market over our five-year forecast period to 2016. The Riyadh groundwater strategy will seek to boost water supply in Riyadh ahead of a major new desalination plant under construction at Ras al-Khair that is due to come onstream. This will provide more than 1mn cubed metres per day (m3/d) of desalinated water to Riyadh when it comes onstream in 2014.
- Marafiq is to establish a new role as private water developer and has plans for a reverse-osmosis desalination plant at Jubail, which will serve the Sadara petrochemicals plant. A 20-year Built- Own-Operate (BOO) contract is expected to be signed. Marafiq is to act as the owner of the project, which will have a capacity of 150,000m3/d. It is now looking to appoint consultants to advise on the formulation of an offtake agreement and advise on the appointment of a contractor for the plant..

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