The Saudi Ministry of Environment, Water and Agriculture signed on Monday an agreement to implement the first privatization program in Saudi Arabia.
The initiative lies in signing of Rabigh 3 Independent Water Project (IWP) from the desalination plant at Rabigh with a design capacity of 600,000 cubic meters of desalinated water per day.
The new project will benefit the Makkah area to meet the growing demand for desalinated water there.
It was offered to investors under the build–own–operate–transfer (BOOT) system and was won by the ACWA Power consortium.
Saudi Minister of Environment, Water and Agriculture Eng. Abdulrahman al-Fadhli, who also chairs of the Board of Directors of the Water and Electricity Company and the Supervisory Committee for the Privatization of Environment, Water and Agriculture Sector, signed the project’s agreement in the presence of Minister of Economy and Planning Mohammed bin Mazyed al-Tuwaijri in the Ministry’s headquarters on Monday.
Fadhli explained that the project is located on the Red Sea coast (150 km north of Jeddah) with a planned capacity of 600,000 cubic meters per day of potable water, using the desalination technology of seawater reverse osmosis, and it is expected to begin operating in 2022.
Signing the agreement comes within the projects of water production and sewage treatment of which the government intends to offer to investors in accordance with the Kingdom’s Vision 2030, Fadhli explained.
He added that it also comes in line with the cabinet’s approvals to offer a number of water production and sewage treatment projects to investors with four projects for water production and three wastewater treatment projects.
These projects aim at raising the level of services, improving the efficiency of spending, benefiting from private sector expertise and financing and increasing its participation, the minister said.
He highlighted the ministry's success in reducing energy consumption levels in independent water production projects by 20 percent.
"The ministry has increased local content to 40 percent at the beginning of the project, gradually reaching 70 percent after the first five years of operation," Fadhli explained.
