Privatization of the Water and Sewage Sector:
- The major responsibilities of the Minister of Water and Electricity include, according to the decree of the Cabinet no. 125 dated 25 Rabe’a Al-Thani 1422H., developing the mechanisms, frameworks, and necessary arrangements of Private Sector for investing in the Water Sector in terms of financing, implementation, operation and maintenance.
- Water Sector is considered one of 20 facilities planned to be privatized by the dint of the cabinet decree no. 219 dated 6 Ramadan 1423H.
- Decree of Supreme Economic Council no. (2/ 27) dated 14 Safar 1427H in relation with the rules organizing and regulating the contribution of the private sector into the Water and Sewage Sector, which provides, according to article three, for the arrangements of the transitory phase that would take between three and five years, through which the following would be carried out:
The Supreme Economic Council’s decree no. (8/ 27) dated 11 Shaban 1427H, stating for the approval on restructuring the subterranean water sector, potable water distribution sector, sewage water pooling sector, and its treatment made by the Ministry of Water and Electricity, and turning these into a joint venture company under the name of National Water Company, which is totally owned by the state represented in the Public Investments Fund. And it should assume its works during four months as of the date of the passing of its establishment decree.
- Examining the water and sewage sector from all its aspects and evaluating its (Illegible), and defining the way by which the growing demands for water would be handled..
- Restructuring the Water and Sewage Sector and developing its (Illegible), and leveraging the standard of services provided to the provinces and regions in different parts of the Kingdom.
- Establishing partnerships with the private sector for promoting the performance and effectiveness of the sector and devising a legal, financial, and technical action framework.
- Revising the water rates.
- The performance of the sector should be evaluated by the end of the transitory phase for identifying the appropriate privatization options available for application and the steps taken for this.
As per the paragraph no. 8 of the Supreme Economic Council no. (8/ 27) dated 11 Shaban 1427H, on establishing an ad hoc committee composed of the Ministries of Water and Electricity, Civil Service and Labour, for developing the arrangements and rules necessary for the work force of the related ministry (Underwater Sector, and Drinking Water Distribution Sector, and collecting and treating wastewater) under the civil service system and labor scheme. Therefore, His Excellency Minister of Water and Electricity has passed decree no. 905/ 6 dated 2 Dhul-Hidja 1427H including establishing such a committee, and the latter was convened to hold meetings for studying and developing the necessary arrangements and rules for handling the status of the related workforce of the Ministry, and thereafter submitted recommendations to the Supreme Economic Council dated 5th of Gumadil-Aakhir 1428H, which has in turn submitted its recommendation no. (54148/B) dated 18th of Dhul-Hidja 1428H by approving the suggested mechanism and submitting the issue to the cabinet.
Cabinet has issued its decree no. 5 dated 12 Muharam 1429 H, stating the approval on the license to establish National Water Company by virtue of the articles of association.
The company shall gradually, in phases set by the Ministry, secure and make available all services of the underground water sector, drinking water sector, wastewater collection and treatment of wastewater affiliating to the Ministry on sound commercial foundations, and the company shall receive its entitlements, including the fees accrued in return for the services rendered duly and regularly by the subscribers without any single exception, and shall also effect all payments due.
Royal Decree no. (M/1) dated 13th of Muharam 1429 H, providing for the approval on the license to establish the National Water Company according to its articles of association with capital issued as follows:
- All state’s rights and properties in relation with the sectors shall be transferred to the company according to the stages determined by the Ministry of Water and Electricity.
- Ministry of Water and Electricity shall supervise the company’s performance of services to such sectors according to the related articles of association, by-laws, and regulations.
- Ministry of Water and Electricity shall examine the cost of producing water and distributing it to the company’s distribution networks, and the purchasing value of these waters in light of the tariff that the company is allowed to collect, and the costs of fulfilling the obligations vested with the company as per the statute, and until then the state shall be bound with providing the company with its needs for drinking water.
The cabinet’s resolution no. 72 dated 09/03/1429H, stating the approval on establishing the NWC’s board for (seven years) starting as of the date of the resolution’s passage.
- The company’s issued capital amounts to SR 22 bn. divided upon (2.2) bn shares with SR10 nominal value
- The company’s paid-in capital upon incorporation (6,848,880,000), six billion, eight hundred forty eight million, eight hundred eighty thousand Saudi Riyals divided upon (684,888,000) shares
contributing to the broader goals of the Kingdom's development strategy