History and Recent Developments
The Saudi water sector, like the entire country, has undergone tremendous changes over the past decades from a system based on the use of local renewable water resources for small-scale irrigation and limited domestic uses to a system largely based on the use of desalinated water and fossil groundwater for large-scale irrigation and domestic, commercial and industrial uses at a level comparable to developed countries. The Saline Water Conversion Corporation, created in 1965, has been an important player in this process of change.
Until 1994 domestic water use was entirely free in Saudi Arabia. Only then a very moderate tariff has been introduced. In the early 2000s the government decided to involve the private sector not only in the construction of infrastructure, but to expand its role also to the financing and operation of infrastructure through Build-Operate-Transfer (BOT) projects. The first BOT project in the water sector was a wastewater treatment plant in Jeddah, followed by Independent Water and Power Projects (IWPPs) for integrated power and desalination plants.
In 2003 the Ministry of Water and Energy was created. It took over the water resources management function from the Ministry of Agricultural and Water and the responsibility for water supply and sanitation from the Ministry of Municipal and Rural Affairs. In the same year the Water & Electricity Company was created as an off-taker for water and electricity produced by the IWPPs.
In 2008 the privatization program was expanded to drinking water supply when the Kingdom's first management contract was signed for the capital Riyadh, followed by two more management contracts (see below). Beginning with the expiration of the management contract in Riyadh in 2014, it is planned to award 20 to 30-year lease contracts for the cities covered by management contracts.
Read more about this topic: Water Supply And Sanitation In Saudi Arabia
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