Saudi Arabia plans spate of water project privatizations in 2019

NEW YORK (Bloomberg) -- Saudi Arabia plans to tender or award six water-related projects in 2019 as it pushes ahead with a privatization program that got off to a slow start.

The cabinet recently approved the tendering of seven desalination and wastewater projects. One was awarded this week, three are in various stages of tender process and three more will be offered to investors next year, the government’s National Center for Privatization and PPP said in a statement.

So far, more than 40% of the bids have come from international companies relying heavily on financing from international banks, the center said. It didn’t provide details on the monetary value of the water projects, but said the total value of all public-private partnerships to be tendered by 2020 is expected to be $6.4 billion to $7.5 billion (24 billion to 28 billion riyals).

The first project, a desalination plant in Rabigh that will supply water to the Mecca region, was awarded to a consortium led by ACWA Power on Monday.

Saudi Arabia unveiled a major privatization program in 2016 as part of Crown Prince Mohammed bin Salman’s plan to raise government revenue and diversify from oil. Economy Minister Mohammed Al Tuwaijri said last year that the government expected to raise some $200 billion in the next few years through privatization, however progress has been slow.

In addition to the water projects, the government plans in 2019 to move ahead on renewable energy projects in solar and wind, parking in Riyadh and a second cargo license station at King Khaled International Airport, according to the statement. It also plans to sell Saudia Medical Services facilities and four flour mill companies, and to establish an agriculture company,