WATER

Saudi Arabia 2017 | GREEN ECONOMY | B2B

The country's rapid expansion, both demographic and industrial, means the importance of water will continue to be as if not more important that oil for the kingdom in the years ahead.

Javier Diaz Gomez
JAVIER DIAZ GOMEZ
Country Manager Saudi Arabia
FCC Aqualia
Rami Mousilli
RAMI MOUSILLI
CEO
Alkhorayef Water and Power Technologies

What is the potential of the Saudi market?

JAVIER DIAZ GOMEZ Market size is extremely important. The Saudi Arabian market has a larger population than any country in the region, and truly is the most important market in the region. Additionally, the geographical size of the country requires a much larger investment of time and capital; companies willing to make these investments will be able to capitalize on the country's rich wealth of opportunity. We were the first Spanish private company to be awarded a non-revenue water contract. This means we try to optimize the network to avoid leaks. We were awarded this contract because we are one of the top-10 firms in the world in the field of water management. Our core business is managing sewage and water networks for cities, and we have extensive experience and world-class expertise. In Spain, for example, we manage the sewage and water systems of more than 1,000 cities. In countries where there are major water scarcities, it is important to reduce water consumption and properly manage water resources. Really, our extensive experience and long history of success was why we were awarded contracts in Saudi Arabia.

RAMI MOUSILLI The country's population growth, industrial expansion, and sprawling development mean there is an ever-increasing demand to increase efficiency and upgrade the capacity of Saudi Arabia's current water and power infrastructure. The national transformation program (NTP) 2020 was mandated to fulfill the requirement of Saudi Arabia's Vision 2030 to make the Kingdom a global investment powerhouse and epicenter of trade connecting Europe, Asia, and Africa. This called for a substantial increase in non-oil revenues and exports by diversifying the economy, increasing efficiencies, and meeting the demands for expansion. In line with these targets, the relevant governmental and semi-governmental bodies underwent complete restructuring to meet them across all aspects of operations. In the power sector, the mandate to diversify the energy mix has driven governmental bodies to initiate grid-integrated renewable energy projects on a wide scale, which will help alleviate air pollution, reduce fossil fuel consumption, and contribute to peak load demand. Vis-à-vis, on the water sector side, the targets to reduce water loss, increase efficiencies, raise the tariff to cover actual costs, increase service coverage, and meet future demands has opened up the field for vast and wide ranging privatization initiative. The restructuring of water and power sector and privatization initiative undertaken by the Kingdom to address the solution to these issues and to meet Vision 2030 target goals are materializing through several major BOT, ROT, and BOO in the brownfield and greenfield projects. Moreover, Saudi Arabia enjoys a high credit rating, stability, and the required regulatory platform to facilitate implementation of PPPs.

What are your expectations for the coming years?

JDG For us, 2017 will be a transitional year. Many governmental agents are announcing their intentions to begin new projects this year, but we know that these types of initiatives take time to develop and implement. These are huge changes that need massive adjustments on the legal and financial side. This will be a major issue both this and next year and will take time to address. We will see major changes by the middle of 2018, but not before. Aqualia has a number of projects with all of the water works institutions, so 2017 is fully loaded in terms of projects. While 2016 was a poor year for tenders, right now we are in a good position. We hope that in the coming weeks we will have even more projects confirmed, especially in water management.

RM Our strategic goal for the year ahead and the future in general is to maintain our lead by continuing to expand our market share and formulate strategic partnerships with governmental and international stakeholders. We are anticipating several BOT, ROT, BOO, and concessions to be released this and the next year, which will be our main focus to transform Alkhorayef Water and Power Technologies into a major regional developer.

 

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