The work covers the expansion of wastewater treatment capacity, sewerage networks and strategic reservoirs in the capital Riyadh and Jeddah on the Red Sea, said Loay Al Musallam, chief executive officer of the National Water Co., or NWCNWC, a government-owned body responsible for water and wastewater networks in urban areas.
said projects worth SAR18 billion had been launched in the two cities in the past two years, and added that total investment needed in the kingdom's water sector was projected to be around $30.5 billion between 2010 and 2016.
The figure includes desalination and rural water networks, which are not under NWCNWC
Saudi Arabia, the Middle East's biggest economy, is ramping up investments in water, wastewater and sewerage projects amid rising demand and greater capacity requirements on the back of industrial expansion and a rapidly growing population.
"These are a portfolio of projects related to wastewater treatment and the expansion of wastewater treatment capacity," Musallam
said in an interview in Riyadh.
"They include building wastewater infrastructure, big tunnels, mainlines, and some other projects that are related to strategic reservoirs so we should have sufficient water in emergency cases," he
is eventually targeted for privatization, but Musallam
said it would not be likely to issue shares in an initial public offering, or IPO, for two to four years.
"Financially, the company now is doing good," he
"By that time [two to four years] the company can go for an IPO and basically we're talking about a small percentage of the company-- 30-35% of assets."
said making the company financially independent depended partly on an increase in water tariffs, which now stand at just SAR0.15 a cubic meter for private customers.
Around 80% of the company's revenue comes from a small number of commercial customers, he
"We have to do this gradually because water services have been perceived for the past 40 years as a free service," Musallam
"By the time we change the tariff I think we will basically be more profitable and we will cover all of our operational and capital investment costs."
Tariffs are now set by a group of different government bodies, but the kingdom is planning to set up a water regulator.
said the most likely outcome would be that the electricity regulator would assume responsibility for the water sector as well.
said the company was considering a debt issue in the future, but not for at least a year.
is also attempting to move into new business areas, including the sale of treated sewage effluence, used as an industrial coolant and for garden irrigation.
had already won sales contracts worth SAR4 billion to SAR5 billion in the past two years and aimed to invest SAR15 billion into expanding its treated sewage effluence business, which he
hopes will generate half the company's revenue within five years.