Saudi Arabia has recently increased its daily production of desalinated water to 5.1 million cubic meters from 3.8 million cubic meters, with the government-owned Saline Water Conversion Corporation (SWCC) supplying 70 percent of that amount, according to Ali bin Abdulrahman Al-Hazmi, engineer and governor of SWCC. But even so, the kingdom still faces real challenges in water security, due to its booming population and surging demand from agricultural and industrial users.

With no lakes or rivers, residents and businesses rely entirely on groundwater reserves and output from desalination plants on the coastlines of the Arabian and Red seas. Already the largest producer of desalinated water in the world, producing nearly a quarter of the global total, up to $53 billion of fresh investment is expected to flow into the sector over the next few years, as the kingdom looks to quench its thirst for fresh water. Partnerships with the private sector will be at the heart of this investment, as mandated by Saudi Vision 2030. And by 2020, the government wants over half of its desalination capacity to come via strategic partners.

Japanese companies are already playing a major role in developing the Saudi Arabian desalination sector and this is set to expand. Among the memorandums of understanding signed earlier this year between the two countries, as a result of the Saudi-Japan Vision 2030 alliance, were agreements to provide the latest desalination technology and commercialization expertise to the kingdom.

Deals included materials manufacturer Toyobo's work on water treatment membranes, and JFE Engineering's plan to develop desalination systems. Other firms, like Sasakura Engineering, are set to provide support on the commercialization of the desalination units. These firms will be eager to repeat the success of many other Japanese companies, including engineering giants, that have already played an integral part in the development of the kingdom's water infrastructure. Sasakura Engineering, for example, has a long history of success in Saudi Arabia, having worked on several desalination plants in the region, including a facility at Jubail, which it worked on in collaboration with SWCC.

The Saudi government anticipates that the upcoming wave of desalination projects will boost employment, especially in the technical area, and create lucrative openings for small and medium-sized enterprises providing services like water transportation to large firms. And the need to maintain and service the new plants will also generate new business opportunities.


Growing force in desalination
For the past 43 years, SWCC has worked to increase desalination output and boost the amount of electricity generated through the reverse osmosis (RO) water purification process for return to the national grid. It operates 28 plants, which provide over two-thirds of the national desalination capacity, on the kingdom's east and west coasts. One of these is the largest desalination plant in the world — the organization's showcase facility at Ras Al-Khair on the Arabian Sea. The state-of-the-art, award-winning plant transforms over 1 billion liters of seawater into potable water each day, with a lengthy water transportation pipeline delivering the huge volumes to millions of consumers in Riyadh. But, with demand for water increasing by at least 5 percent a year, SWCC plans to increase its daily desalination capacity by 43 percent to 7.3 million cubic meters in the next three years.

The company is also moving ahead with its plans for privatization. "SWCC is keen to privatize and align with Saudi Arabia's 2030 strategic objectives, and has decided to invest in the transformation of its operations," according to Al-Hazmi. This means there is currently a plethora of opportunities for international investors and enterprises to play a pivotal role in developing the fast-growing industry, while experiencing robust returns on investment, says Al-Hazmi.

Among the openings for Japanese companies is cooperation on forward osmosis technology, which uses a semi-permeable membrane to separate water from dissolved solutes. Examples of Japanese firms taking up opportunities in desalination include Doosan Heavy Industries and Construction, which signed a contract with SWCC in March 2017 for the fourth stage of its desalination plant at Shaibah. Total water production from public and private desalination plants in Shaibah has already reached almost 2.4 million metric tons per day. But when completed, SWCC's plant alone will produce 400,000 metric tons of water a day and will provide the local area with sufficient potable water to meet its growing demand.

Another exciting project is the Mega-ton Water System initiative, which involves SWCC, Toray and Hitachi, among others. The goal here is the development of a desalination technology that will produce 1 million cubic meters of fresh water a day, at minimal cost and with little impact on the marine environment.


Privatization to trigger investment flood
Apart from SWCC, the other key player in the kingdom's water industry is the National Water Company (NWC), a government-owned Saudi joint-stock company that provides water and wastewater treatment services meeting strict international standards. The company's responsibilities include the provision of quality drinking water, ensuring all households are fitted with safe water and wastewater connections, preserving natural water resources and the environment, and sewage.

In July of this year, Saudi Arabia announced the first steps in the privatization of its sewerage industry. With Japan's Mizuho Bank's involvement, new wastewater plants will be entirely financed and operated by the private sector. This came as a result of a comprehensive strategic study of the kingdom's water sector by the Ministry of Environment, Water and Agriculture, which aims to ensure the sustainable provision of high-quality water and sanitation services at fair prices, in accordance with Saudi Vision 2030.

Dr. Abdulrahman bin Mohammed Al-Ibrahim, CEO of NWC, says that a 500,000-cubic-meter capacity wastewater treatment plant at Jeddah airport's new terminal will be the first to be financed, implemented and operated by the private sector, with the same model then being followed at plants in Dammam, Taif, Arar and Skaka. The first step in the privatization process will be the preparation of contract documents by international specialists, after which a build-operate-transfer contract for the plants will be awarded through a trio of consultants, which includes Mizuho Bank.

More opportunities in water
A few weeks before the privatizations announcement, NWC revealed that in 2016 it launched 48 projects worth nearly $1.5 billion for the development of its water and wastewater services and infrastructure. Around two-thirds of this has been allocated to water projects, as it seeks to increase operational efficiencies, expand urban coverage, meet rising water demand and provide a world-beating full-service portfolio.

Some of these initiatives were among the 116 projects inaugurated one month earlier by the Minister of Environment, Water and Agriculture, Abdulrahman bin Abdulmohsen Al-Fadhli, engineer. All of which will improve drinking water and sanitation services across the kingdom. These projects include purification and pumping stations, the expansion and enhancement of existing treatment plants, the implementation and completion of household and other network projects, pipelines for the distribution of drinking water and sewage, and the establishment of new water tanks in various regions. "The cost of implementing the water and wastewater networks, which cover over 1,400 kilometers, is around $650 million," says Al-Fadhli, adding, "These projects include the installation of more than 61,000 sanitation connections with a treatment capacity of 225,000 cubic meters."

His ministry is keen to hear from companies that wish to explore opportunities in the water sector — especially coming from desalination, building, operating and managing the new waste plants, surface and ground-water purification plants, and the expansion of existing water supply systems in major urban areas. "We are effortlessly willing to address the problems and failures of water supply services by delivering scheduled projects on time, implementing preventive maintenance operations, upgrading customer services centers, improving treatment plants and increasing their efficiency and capacity," explains the minister.

According to official data, Saudi Arabia is, not only the world's largest producer of water through desalination, but one of its biggest users of water overall. The kingdom consumes about 70 gallons of water per person every day — double the individual daily consumption in the European Union, for example. And demand is growing quickly. Japanese companies seeking experienced and professional partners to take advantage of the resultant increasing opportunities in the kingdom's water sector need look no further than AlKawther, a fully integrated provider of turnkey water projects and products, and part of the giant Al Murjan Holding business group.

Ahmed M. Gashlan, engineer and CEO of AlKawther, is very upbeat about his industry's prospects, with demand continuing to outstrip supply and the sector being of vital importance to the health of the economy and tens of millions of people. "In some neighboring countries, over 70 percent of the population are expats. If there is a problem, they will go back to their original countries. But here in the kingdom, the water demand is local and the current growth in that demand is beyond anything ever seen elsewhere. "There is a shortage of 1 million cubic meters of water and a capacity deficit of over 3 million cubic meters of sewerage systems. That is just to cover the current market," he says.

He expects the Saudi Arabian water industry's privatization rollout to act as a powerful catalyst for massive local and foreign investment into new water infrastructure, support services and operations. This is because, he explains, "in the past, we were limited to a few big projects at a time, as government processes were slow." The time is right for getting into the market and reaping the full benefit, he says, "now is the real start to being a pioneer in the industry. If you are among the first to enter and contribute to the kingdom's water sector, you will have a major strategic advantage in the future.

"The government will share its thoughts with you first and this will open doors to pioneering opportunities, not just in building plants, but in related industries like technology, education, training, research, manufacturing, chemicals and exports." Gashlan does not see the opportunities stopping at Saudi Arabia's borders. "The end goal is not just to control the Saudi market; we have the capacity to expand to all Gulf Cooperation Council countries," he states.

A pioneering partner in water
AlKawther has been setting the standard for activities and operations in the water industry throughout the region for nearly 40 years. It was the first provider of water treatment equipment and services in Saudi Arabia, and has since participated in more than 500 water treatment plants across the Arabian Gulf. The company's turnkey projects have included major new infrastructure initiatives, desalination plants and sewage treatment works. Its subcontracting portfolio is extensive and includes filtration plants, tank farms, industrial wastewater treatment plants, disinfection units and sludge separation plants.

"We have long been regarded as industry pioneers," says Gashlan, "because we built the giant reverse osmosis (RO) desalination plant at Ras-Tanajib on the shores of the Arabian Sea in the early 80s. It has a capacity of more than 6 million cubic meters a day." Since then, AlKawther has been the recipient of numerous industry awards and certifications recognizing its highly reliable products and services, along with its contribution to the growth of the water industry in the kingdom and wider region. Operating from gleaming headquarters in Jeddah, AlKawther is the leading supplier of specialized equipment to operators of water and sewerage plants, with a product portfolio that includes metal fabricators for sand filters, storage tanks, filtration systems, booster pumping equipment and chemical dosing systems.

Near AlKawther's headquarters is its modern 18,000-square-meter manufacturing and fabrication facility, which is able to produce packaged and modular systems with capacities of 1,000 to 100,000 gallons a day. All materials are thoroughly inspected before leaving the factory to ensure premium quality and over 320 qualified engineers and technicians are employed in the development and implementation of optimum process and system designs. The company also has a well-equipped water analysis and testing laboratory that serves in-house requirements and also provides testing services for clients.

With the benefit of these facilities, AlKawther is able to design desalination plants based on comprehensive feed water analysis reports, with extensive temperature and pressure data ensuring each client's requirements are met and adhering to the World Health Organization's guidelines for water quality. By using the latest computer-aided design and modeling techniques, the company also has the ability to carefully select the best membrane design for any given application, taking into consideration optimum performance and system economics.

Japanese allies for growth
Japan's unrivaled experience and talent for technology, combined with the kingdom's rich potential for major new water-oriented partnerships and consortiums, appears like the ideal match — and AlKawther is at the head of the queue for such promising alliances in infrastructure development. The company is actively pursuing partnerships with firms from countries like Japan, in order to maintain its upward growth trajectory through mutually beneficial relationships, reveals Gashlan.

"As specialists in water treatment, we are positioned as a total sustainable-solutions provider and are open to collaborations in manufacturing for water-related products, process and design, funding, and financing arrangements like build-operate-transfer (BOT)," he states. He also points out that all the new desalination plants in Saudi Arabia use RO technology, with the old plants gradually being changed over to the same system. "We already represent world-class Japanese brands within the kingdom and the wider region for RO-plant components like pumps, ultra-filtration membranes and chlorination systems, as well as treatment-plant components like blowers, diffusers and for activities like dewatering, odor control and sludge treatment," he stresses.


Financing the future of water
AlKawther regards build-own-operate and BOT contracts as among the best long-term solutions for financing the projects that will ensure a reliable water supply in Saudi Arabia for the future. And it has recently proposed two initiatives to upgrade plants for the National Water Company, one under a BOT arrangement and the other under a build-finance-transfer deal. Gashlan thinks that this partnership approach to projects allows the client and service provider to guarantee water delivery at a specific price, quality and quantity.

It also adheres to the company's mission and vision, which are centered around innovation and partnerships with stakeholders for the development of sustainable communities across the Gulf region. "The most popular trend for the transformation of Saudi Arabia's water sector to privatization is BOT arrangements," he says. "Public-private partnerships will be the second step, because that requires concessions. The government wants to see the result of a BOT arrangement with an investor and then evaluate the project before this happens. On the water side there have been privatization success stories, but not on the sewage side yet. This is because converting sewage into something commercially viable is more complicated," he explains.

He is excited by the upcoming developments in the Saudi Arabian water industry, saying, "we are a stable country with a young population. The demand is there and the land is here. If not Saudi Arabia, then where? There are many opportunities and if we can form partnerships with Japanese companies for future projects, there will be great added value in our sector, leading to successful businesses and a successful country."