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Sun 2 Dec 2007 04:00 AM

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Saudi unveils utilities plans

Large investment to come from government to meet Saudi Arabia’s water and power needs .

Saudi Arabia is planning major investments in power and water over the next two decades, according to the country's minister of water and electricity.

Abdullah Al Hussayen unveiled plans for the water sector at the Saudi Water and Power Forum 2007 in Jeddah in early November.

The minister was prevented by ill health from revealing power plans, however ArabianBusiness.com obtained a copy of his speech.

According to Al Hussayen, the ministry is working closely with the World Bank to develop a national strategy for managing water resources.

The new strategy will focus on managing supply by providing more water sources in the Kingdom in addition to underground and desalinated water.

Recycled waste water is considered a major future water source as the minister plans to provide the country with five million cubic metres of processed waste water in the coming seven years.

The ministry is constructing 115 new dams able to hold 1.3 billion m3 of rainwater, equal to total water reserved in the past 50 years. A further 360 dams are to come with investments of three billion Saudi Riyals (US $800 million).

The low cost of producing drinkable water from the dams compared to desalination plants will make dams a sustainable source for potable water.

The government is putting aside over SR 150 billion ($40 billion) for developing the water sector and the sewage system in the coming two decades. According to Al Hussayen the ministry is currently spending more than SR 62 billion (US $16.5 billion) on potable water and sewage projects.

Al-Hussayen said the government is forming a new national water company with a start-up capital of SR 22 billion (US $5.9 billion) to be responsible for the privatisation of the water and sewage sector.

Contracts are expected to be signed for the privatisation of water and sewage services in Jeddah in the first quarter of 2008. The ministry has already issued a request for proposals (RFP) for the project. Riyadh is coming closer than Jeddah as the minister expects to sign its privatisation contract at the end of this year.

New thermal power plants are currently under construction to expand existing capacity, the minister said in his speech.

Electricity is spending over SR 20 billion (US $5.3 billion) on the expansion of existing power plants in Riyadh, Jeddah, Eastern Province, and Rabigh which will be the home to new power-intensive mega projects.

SEC will add 1 200 MW of electricity to Rabigh's power plant to meet the energy demand for Saudi Arabia's largest petrochemical complex.

The country is embarking on grid-connectivity projects with Egypt, Yemen and other GCC states.

The first phase of the SR6 billion (US $1.6 billion) project to link Saudi Arabia with other GCC countries will be finished by the end of 2008 and the entire project will be completed in 2010.

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