New Market Research Report: Saudi Arabia Water Report Q2 2011

April 19, 2011 - PRLog -- Saudi Arabia is the third largest consumer of water per capita in the world, but has limited groundwater to tap. The country has been plagued by shortages in recent years, and with consumption rising on the back of a growing population and economic growth set to soar, the government has needed to act quickly to stave off potential disaster and civil unrest.

Desalination forms the backbone of the government's water strategy. Some 30 desalination plants have already been built by the state, but these have barely been able to keep pace with rising demand.

The country's water problems remain acute, and will be aggravated by the economic revival underway, underscored by robust oil price levels and expansive government spending initiatives. The pressure is now on the authorities to replicate the increase in electricity tariffs implemented in mid-2010, with new water tariffs that will help to rationalise consumption. The government is understood to be studying options for increasing tariffs to conserve water.

We have revised down our forecasts for water desalination capacity additions over coming years. By 2014, we envisage water desalination supply to reach 1.294bn m3, compared with a previous forecast of 1.366bnm3. The revision reflects slower than expected progress on key schemes, as well as the delays to the major new Ras al-Zour independent water and power production (IWPP) scheme, which was to have been let on a privately financed basis, but is now being implemented as a state-backed scheme.

In Q310, one of the largest water deals in the region was awarded. South Korea's Doosan Heavy Industries & Construction won the engineering, procurement and construction (EPC) contract for Ras al-Zour scheme, in a deal worth US$1.5bn. The reverse osmosis/thermal hybrid desalination plant will boast a capacity of 226mn gallons per day (g/d).

Around US$6bn a year has been committed by the government to bolster the water sector over the next two decades. The programme involves massive input from the domestic and international private sectors.

Saudi Arabia's regulatory system for the power and water sectors was overhauled to make it more investor-friendly and to enable the creation of bodies such as the Water and Electricity Company (WEC) and the National Water Company (NWC) to manage the transition and provide state partners for investors. The latter Riyadh-based company is ramping up its activities in 2011, with a commitment to put projects worth US$800mn into operation as the kingdom focuses its attentions on boosting water use efficiency.

The main vehicles are IWPPs in which the private sector can take stakes of up to 60%. Over US$15bn worth of IWPPs have been sanctioned since the programme started in 2004. They will add over 1bn m3 a year to the country's water supply and nearly 10 gigawatts (GW) of power capacity.

The authorities are considering raising tariffs in order to conserve water, and having hiked power tariffs in summer 2010, there is now a precedent for taking action.

Implementation is the watchword in the wastewater treatment sector. NWC has successfully ensured the shortening of the expected duration of delivery on a number of critical water and wastewater projects worth SAR1bn in Riyadh and Jeddah, following the use of acceleration mechanisms.

NWC had plans to outsource the management of the Medina's water and wastewater networks under public private partnership (PPP) arrangements, with outsourcing of networks in the city of Dammam to follow in Q211. Most wastewater projects will be financed under traditional engineering, procurement and construction (EPC) contracts rather than build-operate-transfer (BOT) schemes over the next couple of years.

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Report Table of Contents:

SWOT Analysis
- Saudi Arabia Water Industry SWOT
- Saudi Arabia Political SWOT
- Saudi Arabia Economic SWOT
- Saudi Arabia Business Environment SWOT
Market Overview
- Competitive Landscape
Pricing Mechanisms And Regulatory Framework
- Tariffs
- Regulatory Framework
Sectors
- IWPP
- Wastewater Treatment
- Water Systems/Pipelines
Major Projects
- IWPPs
- IWPs
- Water And Sewage Networks
- Wastewater Treatment
- Key Projects
- Table: Major Infrastructure Projects - Water
Industry Forecast Scenario
- Table: Key Data, Water Industry
- Table: Water Data by City ('000 cubic metres)
Regional Overview: The Water Sector In The Gulf
Business Environment
- Regional Overview
- Middle East Infrastructure Business Environment Ratings
- Table: Regional Infrastructure Business Environment Ratings
- Regional Overview
- Project Finance Ratings: Outlook For The Middle East
- Table: Design And Construction Rating
- Table: Commissioning And Operating Rating
- Table: Overall Project Finance Rating
Company Profiles
- ACWA Power International
- Suez Environnement
- Veolia Water
BMI Water Forecast Modelling
- How We Generate Our Industry Forecasts
- Infrastructure Business Environment Ratings
- Table: Infrastructure Business Environment Indicators
- Project Finance Ratings
- Table: Design And Construction Phase
- Table: Commissioning And Operating Phase - Commercial Construction
- Table: Commissioning And Operating Phase - Energy And Utilities
- Table: Commissioning And Operating Phase - Transport

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.