Saur forms O&M JV in Saudi Arabia

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The company will work together with part-private utility Marafiq in the first contract of its type in the Kingdom. It will be the first test of a model that Saudi’s water planners eventually want to see in place across the country.

 French water company Saur has formed a joint venture with Saudi Arabian utility Marafiq to operate and maintain water and wastewater assets in the industrial city of Jubail; a move that could provide an insight into the future of the lucrative water market in the Kingdom.

 
The contract for the JV takes in O&M of assets covering water production and distribution and wastewater collection and treatment, as well as seawater cooling for industrial purposes.
 
Equity in the JV is split 51% for Marafiq and 49% for Saur, and the turnover is predicted to be around $60 million a year. The contract covers the next eight years in Jubail, making it a lucrative development for Saur.
 
The new win for the company comes less than a year after it picked up the fiveyear contract for water distribution and network management in Mecca/Taif, along with the Saudi-based Zamil Operations and Maintenance Company (Zomco). The $46 million contract was just the third major municipal management agreement signed in Saudi Arabia, but the value is dwarfed by this new agreement.
 
Zomco has operated and maintained water and wastewater facilities in Jubail since 2003, and was involved as a potential partner in early-stage negotiations with Marafiq and Saur when the former decided to expand the O&M remit in the city.
 
Jubail is an industrial city on the east coast of the Kingdom, with some 150,000 inhabitants. It is one of the two cities – along with Yanbu on the Red Sea coast – where power and water are covered by Marafiq. Marafiq is an independently-operated utility, which is jointly owned by the government and representatives of Saudi industry. There is also a small privatelyowned stake.
 
Assets that will be operated by the new JV include three desalination plants with a total capacity of 37,800m3/d, water tanks and pumping stations, 885km of water supply network and 586km of sewerage network, as well as two wastewater treatment plants with a combined capacity of 132,000m3/d dealing with both municipal and industrial waste.
 
The joint venture between Saur and Marafiq will be under close scrutiny as a precursor to plans laid out for the rest of the country by Saudi Arabia’s National Water Company (NWC). While the management of water distribution in major cities has been fully outsourced to the private sector – Veolia in Riyadh, Suez in Jeddah and Saur/Zomco in Mecca/Taif – NWC has said its ultimate goal is to form O&M JVs with the private sector, and eventually bid for contracts around the region.
 
In an attempt to prepare for this, NWC has been actively trying to include as many foreign operators in the country as possible. The most recent new entrant was Spanish company aqualia, which was awarded a contract to detect leaks and improve reliability in Riyadh.