NWC: Alfadley signs consulting agreement for Water Distribution Sector privatization and private sector participation in the Kingdom with a specialized international consortium

H.E. Eng. Abdulrahman Abdulmohsen Alfadley, the Minister of Environment, Water and Agriculture and the Chairman of the National Water Company (NWC), signed today a consulting agreement with the Japanese Mizuho Bank for advisory services related to the implementation of private sector participation in the Kingdom’s Water Distribution Sector (WDS). The Bank will lead an international consortium, comprising the technical consultant Atkins Company and the legal consultant White & Case Law Firm, in the process of procuring management contracts, which will set the stage for the WDS privatization. This comes as part of the National Strategy for the Sector’s privatization, a strategy approved by the supervising committee on privatizing environmental, water and agricultural sectors in line with the Saudi Vision 2030 and the National Transformation Program 2020.

The Ministry is committed to its strategy and its supporting plans with the aim to achieve services sustainability and operational efficiency through involving the private sector in operational processes and management based on regional clusters, once the initial stages of privatization, management contracts’ offering and awarding are completed in the near future, Alfadley said.

The contract provides for reviewing the general organizational model of the WDS and for the preparation of appropriate methodology for the private sector’s participation in the operational risks and obligations of the sector, stated Eng Mohammed bin Ahmed Al-Mowkley, the CEO of NWC. The Agreement will lead the preparation stage through running a chain of competition invitations in every regional cluster for management contracts that are valid for a term of three to seven years. Competitive bidding will be organized in six regional sectors with the aim, in the first stage, of attracting international companies to participate in the management contracts that will prepare the sector for future privatization. In the second stage, however, standards and conditions will be devised to allow the transfer of such contracts into concession arrangements.

Al-Mowkley added that the management contracts will transfer the operational and administrative responsibilities of distribution networks to the private sector, which will in turn contribute to appropriate preparation of the sector and accelerate the performance improvement process, in addition to establishing standards and indicators to enhance the same.