Bbk gcc water for life jan2013

«Water for Life».

A Strategic Report on the GCC Countries.

January 2013. osec.ch

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| GCC “Water for Life”

Water for Life.

Title.

Water for Life (A Strategic Report on the GCC Countries)

Language.

English

Number of pages.

85 pages

Content.

The rapid growth of the GCC countries population, as well are increasing water needs for the oil & gas industry and the cooling systems in the Gulf Region, are putting existing water resources under serious pressure.

The Gulf region has always shown that innovative solutions could provide reliable answers to water scarcity and allow local economic and social development. That’s the reason why members of the GCC are today heavily relying on water desalination for their fresh water. They are by far the world largest producers of desalinated water in the world.

The following report aims at presenting Swiss companies a panel of those existing business opportunities. Analysis and market growth forecasts are provided country by country about the needs and the objectives of GCC local governments to alleviate the pressure existing on their water resources in terms of quantity and quality.

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Author.

Franck Galland, CEO of Environmental Emergency & Security Services

Other Industry reports.

Are you interested in other industry reports for other sectors and countries? Please find here more of them.

| GCC Water for Life

Contents 1.

Water: The Global Future Challenge

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1.1 1.2 1.3 1.4

Global challenges International debate on how to tackle challenges Industry vs. State. Water a common good or a commercialized resource?

State vs. State. Conflicts about water now and future (special reference to Middle East)

4 6 8 9

2.

The GCC Countries: general overview on economic strengths and water weaknesses

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2.1 2.2 2.3 2.4 2.5 2.6

Saudi Arabia United Arab Emirates Qatar Oman Kuwait Bahrain

12 14 17 18 20 21

3.

The GCC countries: water supply and water demand management

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3.1 3.2 3.3 3.4 3.5 3.6

Saudi Arabia United Arab Emirates Qatar Oman Kuwait Bahrain

23 31 35 40 42 46

4.

Opportunities for Swiss companies in the GCC:

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4.1 4.2 4.3 4.4 4.5

The municipal market The industrial market The smart irrigation and cooling market Competitive insights Projects under development

50 53 54 56 57

5.

How to start Business in the Gulf Countries

71

6.

Annexes

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6.1 6.2 6.3

Exhibitions, fairs and conferences 2011-2012 Useful addresses Sources consulted for this study

74 76 81

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1.

1.1

Water: The Global Future Challenge Global challenges

Pressure on water resources is increasing around the world and affects surface water and groundwater. At the same time, competition for water (between countries or between domestic users) is becoming an additional factor of social and political instability, both domestically and regionally.

Firstly, this is due to the increase in water demand, linked to world population growth and water-related use such as domestic and agricultural water. At the same time, per capita water consumption is rising, as it supports the improvement of living standards or even the mere connection to networks, for drinking water or irrigation purposes. Cities, with their population centres, concentrate demand and pollution, and thus exercise great ecological pressure on the neighbouring environment.

Secondly, the increase in water demand is compounded by the decreasing availability of water resources in most major hydraulic basins, either because of deterioration in quality (pollution) or quantity (climate change, aquifer depletion, change in precipitation regime). Even the wettest areas on the earth, such as the Amazon basin, suffered periods of drought in 2005 and 2010.

This drop in availability immediately and appreciably affects not only surface water, but also groundwater which is the main source of water for the Gulf countries.

The global challenges for a sustainable management of water resources are directly linked to the primary drivers of the pressures affecting water demand and availability.

Agriculture: The increase in agricultural production as a consequence of the green revolution has had the greatest impact on water consumption.

Agriculture represents 90% of world fresh water consumption and 70% of withdrawals. This sector is, at the same time, the one in which the greatest progress is expected and is yet the most difficult to reform.

Agriculture has many dimensions: social (providing work and ultimate protection against extreme poverty), political (social stability), economic (% of agriculture in the downstream states’ GDP).

However the emergency is now to adapt regionalagriculture water demand to water availability. The main challenge in this area is how to feed the current and future populations in a context of water scarcity?

Agriculture and its attendant social dimension stand at the heart of tensions. Because of that social dimension, any alteration to the agricultural sector due to the lack of water may lead to internal social and political instability. With this in mind, Saudi Arabia’s agriculture seems to be particularly vulnerable, due to the limited horizon of fossil water exploitation.

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Climate Change: Climate change is the major hot spot of the global warming in a large area from the Mediterranean countries to the Gulf region. Increase in atmospheric temperature has considerable impact on water resources and on agricultural and energy sectors: reduction of the availability of water (especially in basins fed by glaciers that are shrinking), increase of evaporation, shifts in precipitation patterns, increase in inter annual precipitation variability, more frequent and intense extreme events (droughts, floods), fall in hydropower potential etc.

In the Gulf countries, precipitation and renewable water resources are already very scarce. But increase in atmospheric temperature will lead to a stronger evaporation rate. Consequently the current overexploitation of aquifers will be exacerbated.

Changes in annual runoff (2090-2099 vs 1980-1999)

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“Climate change and Water”, IPCC, Technical Paper n°4, 2008, 210p

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Water quality: Water quality also features as one of the most important issues in water management. Poor water quality has direct consequences for mortality in emerging countries.

This results from the progressive salination of water sources, which itself occurs essentially because of the over-exploitation of surface and groundwater resources. Water contamination subsequently results from industrial and domestic waste, as well as from agric ultural pesticides.

The situation is all the more problematic in that polluted aquifers can take thousands of years to regenerate.

The Energy-Water nexus: Energy constraints are beginning to affect water policy, and water policy is beginning to affect national energy choices. On the one hand, more and more energy, especially electricity, is needed to produce freshwater (desalinization, reuse, water treatment.) or to “displace” the resource (groundwater pumping, water transfers, pressured networks for irrigation or domestic water). On the other, water is required to generate energy (for turbines in hydro-electric facilities, for district cooling and cooling in thermal or nuclear energy plants).

For the moment, it is estimated that an average of 102 KWH/capita is needed to provide water and clean waste water during one year, which is quite little. 40% of the power needed is for water; the remaining 60% are for waste water treatment. Water supply systems and waste water treatment technologies are supposed to use 1,2% of the energy consumed in the OECD countries, but already 2,9 % of the energy consumed in the Middle East.

Access to safe water and sanitation: This is one of the most important global challenges. Around 1.1 billion people lack access to safe water supplies. 2.6 billion still lack access to improved sanitation and 4 billion are not connected to any sanitation network.

Many programs by international organizations have tried to tackle this challenge, such as the UN’s International Drinking Water Supply and Sanitation Decade (1981-1990). But the targets have not been met so far because of the high level of population growth.

1.2

International debate on how to tackle challenges

Since the 1972 United Nations Conference of Stockholm on the Human Environment, international organizations have developed specific programs in the water sector. Today, action on water issues by 26 agencies and entities from the UN System is coordinated by UNWater2.

Two major institutions or programs dedicated to water must be underlined. Firstly, the World Water Council, based at Marseille and created in 1995, is an international multi-stakeholder platform (public actors, private sector, NGO etc.). Its missions is “to promote awareness, build political commitment and trigger action on critical water issues at all levels, including the highest decision-making level, to facilitate the efficient conservation, protection, development, planning, management and use of water in all its dimensions on an environmentally sustainable basis for the benefit of all life on earth”.

Every three years, the World Water Council organizes the World Water Forum, which is the world's largest meeting on water issues. Over 25,000 participants took part in the 5th World Water Forum in 2009 in Istanbul. Marseille will welcome in March 2012 the 6th edition of this event. All the GCC countries will take part in the event.

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http://www.unwater.org/

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THEMATIC FRAMEWORK3 FOR THE 6TH WORLD WATER FORUM IN MARSEILLE (MARCH 2012)

Secondly, the World Water Assessment Programme (WWAP) is the leading UN-Water program. It was founded in 2000 and is housed in Paris at UNESCO’s headquarters. The WWAP monitors “freshwater issues in order to provide recommendations, develop case studies, enhance assessment capacity at a national level and inform the decision-making process”.

Every three years this program publishes the World Water Development Report (WWDR), which is the reference document about the state of the resource and the tools for policy makers to implement sustainable use of water. The 4th WWDR will be published in March 2012 during the 6th World Water Forum.

After almost 40 years of involvement, international organizations are very cautious about the balance of their own actions. No global solutions can be promoted. Most water disputes appear indeed at the local level, which means that the local level is also the geographic scale of conflict resolution.

International organizations are therefore developing particularly adaptable instruments for water management such as Integrated Water Resources Management (IWRM), based on testing, classification and the dissemination of good practices.

But several themes of debate can be underlined: Sustainable water management should include a supply-side and a demand-side strategy. Most of the states are too focused on quantity and the amount of water available. This political vision can lead ton infrastructural national water policy exclusively, based on too many inter-basin transfers, desalinisation and water reuse programs.

This amplifies the dependence on ever growing quantities of water, in a context of increasingly scarce regional resources due to natural desertification and climate change. That is why supply-side strategies alone are potential crisis factors.

Technology is an important part of the solution of water shortage, and must be integrated in supply-side and demand-side strategies.

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http://www.worldwaterforum6.org/en/commissions/thematic/#targets

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The water sector, in fact, needs more efficiency and more management. Water losses remain very high in most irrigation networks or urban water distribution systems. One part of the solution is to increase the networks’ efficiency, and also the efficiency of irrigation techniques.

Furthermore, water management means a clear vision of the future needs and demands, and a clear assessment of future drivers on water demands.

It seems indeed that tensions generated by water resources result primarily from a lack of adequate management policies. So the water crisis can basically be explained because of a governance crisis.

The relationship of water to populations comes from traditional or customary uses, and cultural or religious perceptions. The success of water management policies must involve all the above parameters, and many stakeholders (users, policy makers, private sector and national NGOs) must also be involved in the water policy process.  In its 2000 Millennium Declaration, the United Nations Assembly set eight goals for development, called the Millennium Development Goals (MDGs). Goal n°7, completed by the final declaration of the UN Conference on Sustainable Development in Johannesburg (2002), is to reduce by half the proportion of people without sustainable access to safe drinking water and without improved sanitation. This challenge mobilizes all international organizations related to the water sector.

1.3

Industry vs. State. Water a common good or a commercialized resource?

In 1992, the International Conference on Water and Environment in Dublin triggered off a revolution in the perception of water. Principle n°4 of the Dublin Declaration on Water and Sustainable Development stated that “Water has an economic value in all its competing uses and should be recognized as an economic good”. This principle recognizes the economic dimension of water as well as its social and environmental dimensions.

As a direct consequence of the Dublin Declaration, several ethical questions appear regularly in the international debate: The opportunity for private firms to participate in providing essential services, the (virtually) free nature of water, its commercialization, and the recognition of a human right to water. Under such circumstances, the price of water has become a more political than economical issue.

Although the economic character of water is stressed in the current debate, this is only one component of it, compared to its social and environmental dimensions.

A new balance between the different uses of water remains to be found. That is why water is an economic good (which is not contradictory with the human right to water) but not a commodity.

The full cost recovery of the water services cannot be applied in most parts of the developing countries because of poverty 4.

In the Gulf Countries, the recovery cost of water services is among one of the lowest in the world, despite the high level of water consumption per habitant in this region.

This can be explained by very low water tariffs such as in Saudi Arabia (less than 0.3$/M3), or by water bills which are not collected efficiently and paid such as in Kuwait.

4

“Beyond Scarcity : Power, Poverty and the Global Water Crisis”, Human Development Report 2006. New York, 2006.

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1.4

State vs. State. Conflicts about water now and future (special reference to Middle East)

Water, in countries where the effects of shortage are already severe, can be firstly a source of internal instability (rural poverty, rural depopulation, public health matters, conflicts between categories of users) and secondly of interstates disputes.

There are 276 international rivers5 and around 230 transboundary aquifers6 in the world. The history of water conflict7 has shown that so far peace has always prevailed versus what journalists are calling “water wars”.

However, water has become a key factor in power politics and is going to remain a source of tensions. Water will more particularly remain a means of exerting international pressure, and is certainly a key issue between states especially in the basins of the Aral Sea, the Nile, the Indus River, the Jordan river, the Mekong and the Tigris and the Euphrates.

But the resource is also a cooperative issue.International watercourses are representative of different degrees of cooperation, from the existence of ancient basin institutions (e.g. the Mekong, Senegal) to a quasi-total absence of common management (the Aral Sea and the Tigris and Euphrates basins). The Middle East (Jordan river, Nile basin) illustrates an elementary but very incomplete cooperation.

Except the Disi aquifer (shared by Jordan and Saudi Arabia) and informal contact between Yemen and Saudi Arabia about the Wajid aquifer, there is no water agreement, either for surface water or groundwater, between Gulf countries.

A point to underline in the Gulf region is the prevalence of internal tensions. The potential for conflict is primarily internal, whether it comes to competition between categories of users (agricultural vs domestic use of water in Yemen, agricultural vs domestic/industrial use of water Saudi Arabia) or among agricultural users themselves.

In the Middle East, countries are accepting the depletion of non-renewable water aquifers. States that exploit fossil resources most massively, such as Saudi Arabia or Jordan, seem resigned to the depletion of these water tables.

Therefore, the vision of fossil water as a mining stock imposes itself, and triggers a race for the extraction of confined aquifers until they are altogether depleted. It reinforces the “Tragedy of the Commons” described by Garrett Hardin8, which shows that the economic rationality of actors enjoying a public good leads to the disappearance of the latter.

The Gulf Cooperation Council (GCC9) has not integrated water in its areas of cooperation (except in the scientific fields, cf. GCC Charter).

If the Arab League is more dynamic in this field, its action related to water is focused on the Palestinian issue. The Arab League has not adopted any statement so far about water resources shared by at least two of its members.

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Last calculation from the PC-CP Program (UNESCO) in 2011, to be published.

“Atlas of transboundary aquifers”, PURI Shaminder, AURELI Alice, ISARM Programme, UNESCO-IHP, 2009.

According to Aaron Wolf and his team from the University of Oregon, only one “open war” was directly caused by the division of water use. This is said to have involved two Mesopotamian cities, Umma and Lagash, over the appropriation of an oasis 4,500 years ago. For more information : “Transboundary freshwater dispute resolution. Theory, practice and annotated references”, BEACH Heather L., HAMMER Jesse, HEWITT J. Joseph, KAUFMAN Edy, KURKI Anja, OPPENHEIMER Joe A., WOLF Aaron T., New York, United Nations University Press, coll. Water resources management and policy, 2000.

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“ The tragedy of the commons ”, HARDIN Garret, Science, n°162, 1968, pp.1243-1248. See also the books published by the UNDP (United Nations Development Programme) about world public goods : KAUL Inge, GRUNBERG Isabelle, STERN Marc A., (dir), “Global public goods. International cooperation in the 21 st Century”, New York, Oxford, Oxford University Press, 1999, 549p. and KAUL Inge, CONCEICAO Pedro, LE GOULVEN Katell, MENDOZA Ronald U., (dir.), “Providing glabal public goods. Managing globalization”, New York, Oxford, Oxford University Press, 2003, 646 p.

9 http://www.gcc-sg.org

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Ground water and fossil aquifers in Gulf countries Due to the very low rainfall in this area, most of the water withdrawals in Gulf countries are coming from non-renewable aquifers (also called fossil groundwater).

Improving knowledge on groundwater has therefore become a priority for international organizations involved in the water sector, because groundwater is an essential resource for human beings. In the world, they account for about 50% of pumping for drinking water 10 and for 20% of the water used for irrigation.

In India, 80% of agricultural production depends on groundwater. In arid and semi-arid zones such as the GCC countries, 60% of the water used for irrigation comes from groundwater11.

Among the various types of existing phreatic layers12, fossil groundwater is both a geological and climatic characteristic feature. The Terminology Commission of the French National Committee for Hydrological Sciences (Commission de terminologie du Comité National Français des Sciences Hydrologiques) proposes the following definition13: “Water that has been in an aquifer for a very long time (in the order of several centuries at least, more usually several thousand or tens of thousands of years), that has often flowed into it under different climatic and morphological conditions from the current ones, with no relation to the contemporary water cycle.”

In practice, a fossil water table that did not replenish itself rather pertains to a theoretical model. A fossil groundwater layer actually refers to the very slow renewal of the aquifer (over several centuries or even tens of thousands of years).

Generally, non-renewable groundwater resources are defined as posting a turnover not exceeding 1% per year 14 (i.e., the groundwater takes a century to renew itself completely).

In view of their extremely slow replenishment (a century or more), any use of non-renewable resources can be said to be, by definition, a case of over-exploitation, as it leads to the gradual disappearance of these water layers.

The water is no longer considered as a renewable but as a mining resource, and the water layer as a deposit (referred to as mining when it comes to fossil water).

The duration of the exploitation results from the ratio between annual pumping and the estimated stock in the non-renewable aquifer. This type of pumping promotes unsustainable uses of the resource, giving the illusion that the resource is more abundant than the volume actually renewable each year.

Today, Saudi Arabia, Libya and Algeria together account for 85% of the mining of non-renewable groundwater resources15 in the world.

In Libya and Saudi Arabia, over 50% of total water demand is supplied by groundwater.

10

Worldwide Scheme for the assessment of water resources, L’eau pour les hommes, l’eau pour la vie, Paris, Unesco Publishing, 2003, p. 78.

Worldwide Programme for the assessment of water resources, Water, a shared responsability. The United Nations World Water Development Report 2, Paris, UNESCO Publishing, 2006, p. 128.

12 According to the French hydrology dictionary, a water table car be defined in different ways: *Based on the nature of the aquifer : it is either an alluvial layer, a dune layer, a chalk layer, a « Green sands » layer, or an « infra-mollassic » layer, etc. *Based on hydrodynamic conditions : it is either a free layer, a perched water-table, a captive layer or an artesian aquifer, *Based on the hydrogeological structure and the conditions prevailing at its limits: it is either an spilling layer, a discharge layer, an overflow layer, a supported layer, or a sub-river layer, *Based on accessibility: it is either a phreatic layer, a deep layer, *Based on the water features: it is either a salt layer or a thermal layer.

13 Dictionnaire français d’hydrologie (mainly written by Jean Margat), accessible at the following address: http://www.cig.ensmp.fr/~hubert/glu/indexdic.htm 14 MARGAT Jean, Les eaux souterraines dans le monde, Paris, BRGM Editions, 2008, p. 76.

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15

Ibid.

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ARABIAN PENINSULA: SHARED GROUDWATER AQUIFERS16

16

PURI Shaminder, AURELI Alice, Atlas of transboundary aquifers, ISARM Programme, UNESCO-IHP, 2009, 326 p.

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2.

The GCC Countries: general overview on economic strengths and water weaknesses

Gulf Cooperation Council countries account for:    

38 million people today, 63 million in 2025; 40% of the world oil reserves; a Gulf oil producers’combined nominal GDP higher than 1.1 trillion USD in 2011 17 ; nearly half the total economy of Arab countries.

In essence a strategic region, which concentrates today’s - but even more so tomorrow’s - current political, societal and energy stakes, the Gulf countries are living an extraordinary phase of transition towards the post-oil era .

In appearance, they have numerous forces in common: demographically exploding, they have young societies, and all bear a strong concentration of urbanization and the coastalisation.

Economically speaking, their economies are still traditionally based on oil and gas, but are in the process of diversific ation, with local government investing in knowledge and education. Other privileged tools of economic diversification are the special free and economic zones. Today, the Gulf enjoys about forty of these zones, which are particularly concentrated around the Strait of Hormuz.

On the other hand, they also have weaknesses that need to be tackled. From a societal point of view, they almost all lack a national workforce to accompany economic diversification. But strategically, they lack water. The lack of water has really become a strategic and a defence and security issue for the Gulf countries.

GCC countries, which have a lot in common prove however to be very different in terms of political power, economy, and business attractiveness. The following pages aim to briefly present each of them, in terms of economy, political strengths and weaknesses. They also introduce serious issues regarding water resources vs. freshwater demand.

These six index cards, rather like ID cards, introduce in fact part III of this water strategic study on GCC countries.

2.1

Saudi Arabia

A brief history: Saudi Arabia is the birthplace of Islam and home to Islam's two holiest shrines in Mecca and Medina. The modern Saudi state was founded in 1932 by Abd Al-Aziz bin Abd al-Rahman Al Saud (Ibn Saud). His son Abdallah bin Abd al-Aziz, rules the country today as required by the country's 1992 Basic Law. King Abdallah is continuing the cautious reform program begun when he was Crown Prince, in terms of political participation, promotion, while opening the country and encouraging religious tolerance on a global level (see Inter-Faith Dialogue initiative in 2008).

The country remains a leading producer of oil and natural gas and holds more than 20% of the world's proven oil reserves. The government continues to pursue economic reform and diversification and promote foreign investment in the Kingdom, particularly since KSA’s accession to the WTO in December 2005.

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The outside current account surplus of the GCC countries should double in 2011, with regard to last year, exceeding the 300 billion dollars threshold.

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National strategic and forecast vision /investment in infrastructures: The government is building five new ecocities as part of its new economic program. According to the Saudi Arabian General Investment Authority (SAGIA), this project will contribute USD 150 billion to the country’s GDP by 2020. These cities are also expected to provide job opportunities for 1,3 million people. According to SAGIA, the cities will be developed in clusters of four industrial core industries: steel, aluminium, fertilizers and petrochemicals.

These cities are namely: • KAEC, King Abdullah Economic City, the largest, all inclusive city.

• KEC, Knowledge Economic City, to develop the technology base.

• PABMEC, Prince Abdulaziz bin Mousaed Economic City, clusters of agro business.

• JEC, Jazan Economic City, all inclusive city, but specializing in heavy industry.

Key figures: • Total area: 2 149 690 km2.

• Government: absolute monarchy, with 13 provinces (The current King is Abdallah bin Abd al-Aziz Al Saud).

• Population: 26,534,504 (July 2012 est.)

• Median age: 25 years.

• Percentage of foreigners among the population: 30 % • GDP: 676.7 billion $ (2011 est.)

• GDP per capita: 24 000 $ (est. 2011) • Unemployment rate: 10,5% • Urban population: 82 % • Urbanization Rate: 2,2% Water resources vs. freshwater demand: The majority of Saudi-Arabia is desert. The climate is semi-arid to dry. Saudi Arabia possesses no natural permanent source of water.

Furthermore, surface water is very limited. That is the reason why many reservoirs were built from 1975 (226 dams in service in 2006) to preserve rainwater.

Saudi Arabia’s food security policy has required a high allocation of water resources for agriculture, and the possible exhaustion of the fossil water is due to the formerly inappropriate agricultural practices, especially in methods of irrigation.

With water for agriculture, Saudi Arabia consumes over 22 billion cubic meters of water annually, having the highest per capita water consumption rate in the world.

With a population of more than 25 million in 2011, demand for water in Saudi Arabia is expected to increase from 7.5 million cubic meters per day in 2011, up to 9.6 million cubic meters per day in 2020. This demand is also tending to grow because of the diversification economic plan. For example, the 5 new economic cities will be built soon, along with all of the necessary energy and water infrastructures.

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The following graph shows high increase rate in water consumption:

2.2

United Arab Emirates

A brief history: Just like Qatar, UAE won independence from the British protectorate between 1971 and 1972 and became a federation of seven emirates. The exploitation of oil began in the 60s, bringing to UAE a rich and stable enough economy that enabled them to quickly transform the former desert into a modern state. The government quickly invested in diversification and in the creation of new jobs. Successful efforts at economic diversification reduced the portion of GDP based on oil and gas output to 25%. Many differences exist in demographics, power and economics between the seven Emirates. Only four of them possess oil and gas: Abu Dhabi, Dubai,Sharjah, and Ras Al Khaimah, .

The global financial crisis, tight international credit, and deflated asset prices constricted considerably the UAE’s economies in 2009 and 2010. More particularly, Dubai faced a deep financial crisis. According to the IMF, its public debt end of 2009 was close to USD 109 billion, which was about 130% of Dubai’s GDP. However the financial crisis faced by Dubai was tackled through Abu Dhabi’s strong support as well as other GCC members’ financial contribution. Public expenses have also been heavily cut.

Following this internal and financial crisis in the Emirates, the UAE needs now to develop new partnerships, and according to its recent efforts (and its long term strategy), there could be a chance to take.

National strategic and forecast vision: The UAE's strategic plan for the next years is focusing on diversification and creation of more opportunities for nationals, through improved education and increased private sector employment.

Concerning its energetic transition, UAE plans to produce 7% of its power capacity from renewable energy and should enjoy a 30% low carbon energy by 2020.

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Key figures: • Total area : 2 149 690 km2.

• Government : Constitutional monarchy (the current President is H.H. Khalifa bin Zayid Al-Nahyan), with seven Emirates : Abu Dhabi, Dubai, Sharjah, Ajman, Umm al Quwain, Ras el Khaimah, Fujairah.

• Population : 5,314,317 (July 2012 est.)

• Median age: 30 years Percentage of foreigners among the population: 80% • GDP : $260.8 billion (2011 est.)

• GDP per capita : $48,500 (2011 est.)

• Unemployment rate : 4% • Urban population : 80% • Urbanization Rate : 2,3% Comparis on Abu Dhabi vs. Dubaï : Abu Dhabi ➢ GDP : 60% of UAE’s GDP ➢ 9% of the oil world reserves ➢ 5% of the world’s gas reserves ➢ Special economic zones ➢ 2006 forecast economic roadmap “Vision 2030” to create a new economy, less dependence on carbon resources, aim to develop renewable energies for 7% of its energetic needs by 2020. Masdar, the green city project, powered by a photovoltaic power plant, is its symbol.

Dubai ➢ GDP : 26% of the UAE’s GDP ➢ Special Free Trade Zones, offering 100% foreign ownership and zero taxation : platform of re exportation in the region (the port free zone of Jebel Ali homes 6400 companies in 2011, from 100 different nationalities). ➢ Financial hub: Dubai International Financial Centre (DIFC).

Focus: Abu Dhabi’s new cities’ projects In the « 2030 vision » initiated by H.H. Sheikh Khalifa bin Zayed Al Nahyan, Abu Dhabi plans to develop its future economy based on tourism. Five new cities are planned to serve that purpose : • Mohamed Bin Zayed City, the new standing city Started in 2007, and planned to be completed in 2012, this city is in Abu Dhabi’s suburbs area called Mussafah. The city is planned with 349 towers welcoming 85 000 inhabitants.

• Al Raha Beach, the beach under the buidings Al Raha is a coastal project, of 11 kilometers long and that should be ready in 2019. It is designed for 120 000 inhabi tants. The city is planned with a very efficient transport network, which will facilitate the communication and exchanges between the 11 districts.

• Saadiyat Island, the cultural hub This is one of the Abu Dhabi’s flagship projects both in capita and in capacity. Second in terms of capacity, it is planned for 150 000 inhabitants, and represents the second largest budget planned with USD 27 billion. This project tends to attract the rich thanks to 8000 luxury villas. Besides, it should become a cultural hub with several prestigious museums, such as the Guggenheim and the Louvre.

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• Al Reem Island, the Nation’s proudness project This is the largest project supported by Abu Dhabi: 633 hectares, 280 000 inhabitants, a 30 billion USD investment. It should be ready in 2012. The project is so important that is being divided into 4 sub projects: Al Shams (22 000 accommodation units and about one hundred tower blocks), Najmat (16 accommodation units and 3000 shops), Marina Square and Addax port (mainly residential tower blocks).

Water resources vs. freshwater demand: As its Saudi neighbour, the UAE consists of 80% desert, especially on the western coast. The climate is arid. Because of this arid climate, the country is in permanent water stress. The precipitation rate is very low. Covering a period between 9 and 19 days in the year, annual rainfall is about 78 mm.

Without any permanent sources of water, the UAE uses the artificial recharging of aquifers, by increasing the storage of water in dams along (or by feeding) river beds.

Water demand in the UAE is one of the highest in the world. Moreover, demand is increasing every year due to population growth, increasing levels of tourism, and agriculture.

Each Emirati consumes about 550 litres of water per day, according to the Agency for the Environment of Emirates, compared with a world average of 180 to 200 litres. We should note that among the emirates, two are big water consumers: Abu Dhabi and Dubai. The grandiose new infrastructures projects (see above) will almost inevitably contribute to increase water demand in the years ahead.

Furthermore, agriculture uses 80% of the national water resources. This issue is the most worrying and challenging for the UAE’s future.

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2.3

Qatar

A brief history: Ruled by the Al Thani family since the mid-1800s, Qatar, which started as a poor British protectorate, turned into a rich and independent state in 1971. The State began to grow from an economic and demographic point of view in 1949, due to the first oil exploitation. Later on, the discovery of the world’s largest natural gas layer in 1971 propelled the country to the rank of the 3rd largest worldwide gas reserves.

In 2007, thanks to oil and natural gas Qatar was enjoying the second-highest income per capita in the world. Oil and gas have likely made Qatar into the highest per-capita income country – now ahead of Liechtenstein - and the country with the lowest unemployment rate.

Indeed, the oil and gas exportation accounts for 60% of the emirate’s income and 80% of its external receipts. Conscious that this hydrocarbon force is limited in the long term, Qatar decided to anticipate peak oil (envisaged circa 2030 according to projections) by diversifying its economy.

National strategic and forecast vision: The strategic program “National Vision 2030”, launched in March 2011, consists of the four following axes: - Global technological clusters related to the economy of knowledge such as the Qatar Science and Technology Park, QSTP, which will attract global companies R&D centers.

- Air, land and sea transport hubs.

- A regional financial center.

- Business tourism.

This strategy also includes a significant industrial investment program, ranging from chemical industry, petrochemistry, liquefaction of natural gas, aluminium, steel-works, paper and fiber, to agro-alimentary industry.

In parallel, two mega new city projects have been launched: - Pearl Island, very close to Doha, - Lusail City, north of Doha.

Investment in infrastructures: • Technically, from 2016 on, Qatar will invest approximately 40% of its annual expenditure to finance new infrastructures and projects of economic diversification.

• The government also implemented in-depth legislative reform concerning foreign investment. Since January 1 st, 2010, corporate income tax was returned to a single rate of 10 %. Also, since February 1st, 2011, foreign investors can hold 100 % of the capital of a Qatarregistered company .

• Qatar is also going to need a metro system and the Qatar-Bahrain causeway to accommodate the 2020 World Cup, which was won by Qatar about a year ago.

Thanks to the 2020 World Cup, Qatar aims to become “the sports’ capital of the Middle East”. Qatar is also examining its capabilities in terms of accommodation, facilities and the services it needs in order to be able to host big sporting events. With Doha International Airport’s continuing expansion and plans for rail connections to the city, Doha is quickly developing a transport infrastructure to match its ambitions, as a host of major sports events. The Qatar Olympic Committee (QOC) is currently working on two new football stadiums and a velodrome for cycling and has set aside land for the construction of sports complexes on a build-operate-transfer basis at low rents.

Five years ago, Doha had also organized successfully the Asiatic Games of 2006, thanks to a budget of USD 2.8 billion and has already began to transform itself into a high level sports’ place.

Key figures: • Total area: 11,586 km2.

• Government: Emirate run by Emir is H.H. Hamad bin Khalifa Al Thani.

• Population: 1,951,591 (July 2012 est.)

• Median age: 30.8 years • Percentage of foreigners among the population: 86.5 % • GDP : $181.7 billion (2011 est.)

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• GDP per capita : $102,700 (2011 est.)

• Unemployment rate: 0.5 % (2011) • Urban population: 96% of total population (2010) • Urbanization Rate: 1.6% annual rate of change (2010-15 est.).

Water resources vs. freshwater demand: Qatar is a rocky desert area. The arid desert climate is characterized by scanty rainfall with an annual average of about 80mm over the period of 1972-2005. There are no permanent rivers in Qatar, only seasonal ones.

Direct and indirect recharge of groundwater from rainwater is the main source of natural internal water. The average annual groundwater recharge from rainfall is estimated internally at 55.9 million m³/year. We should note that these renewable resources are almost exclusively underground resources shared with Saudi Arabia.

Qataris are one of the world’s biggest consumers of water with each inhabitant using an average of 400 litres of water per day.

Contrary to their Saudi neighbours, the takings in water serve essentially for domestic and industrial needs, and the use of water for agriculture is significantly less intensive. Indeed, the country chose to depend almost exclusively on imports to meet food requirements instead of producing it on their own soil (except for the culture of dates).

2.4

Oman

Brief history: Inhabitants of Oman have long prospered on Indian Ocean trade. In the late 18th century, Oman's dependence on British political and military advisors increased, but it never became a British colony. In 1970, H.H. Qaboos bin Said Al-Said overthrew the restrictive rule of his father. He has ruled as Sultan ever since. His extensive modernization program has opened the country to the world while preserving the longstanding close ties with the UK. In February and March 2011, in response to protester demands and demonstrations, Sultan Qaboos pledged to create more government jobs and promised to implement economic and political reforms.

Also in March 2011, the Gulf Cooperation Council pledged USD 20 billion in financial aid to Oman and Bahrain over a 10-year period to assist the two nations in their struggle following the Arab spring. In October 2011, Sultan Qaboos issued a Royal decree expanding the legislative powers of the Council of Oman to amend and approve draft legislation.

National strategic and forecast vision: Oman is a middle-income economy that is heavily dependent on dwindling oil resources. Because of declining reserves, Muscat is now trying to diverse its economy. Oman is pursuing a development plan that focuses on diversification, industrialization, and privatization, with the objective to reduce the oil sector's contribution to GDP to 9% by 2020. Tourism and gas-based industries are key components of the government's diversification strategy. By using enhanced oil recovery techniques, Oman succeeded in increasing oil production, giving the country more time to diversify.

Key figures: • Total area: 309 500 km2.

• Government: Monarchy (the current Sultan is H.H. Sultan Qaboos bin Said al Said) • Population: 3,090,150 (July 2012 est.), includes 577,293 non-nationals • Median age: 24 years.

• GDP: $80.89 billion (2011 est.)

• GDP per capita (PPP): $26,200 (2011 est.)

• Unemployment rate: 15% (last evaluation of 2004) • Urban population: 73 % • Urbanization rate: 2,3%

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Water resources vs. freshwater demand: Oman is more fortunate than other GCC countries since it has marginally higher rainfall, which does recharge shallow aquifers on both sides of the northern Oman mountains and the Salalah plain from Jabal Qara.

For this reason Oman is the only country of the GCC considered as above the "poverty line" for freshwater.

Aflaj (sing. falaj) are the main source of irrigation water in Oman beside wells. They are used in agriculture as well as for domestic use since ancient times.

According to the Ministry of Water Resources (MWR), the number of Aflaj in Oman is estimated to be 11,000, among which 4,000 are major ones constantly flowing.

Compared with the other GCC’s countries, Oman seems the least unreasonable in its water management. It is indeed the only one whose takings of water do not exceed renewable resources.

Domestic consumption is estimated to account for a small part (about 10%) of all water demand in Oman. Industrial demand for water is less than five per cent.

The greatest consumer of water in Oman is therefore agriculture. It consumes over 90% of renewable freshwater resources and contributes about 2% to GDP at current prices according to Ministry of national economy data.

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2.5

Kuwait

Brief history: Britain oversaw foreign relations and defence for the ruling Kuwaiti Al-Sabah dynasty from 1899 until independence in 1961. Kuwait was attacked and overrun by Iraq on 2 August 1990. Once free thanks to an international coalition, Kuwait spent more than USD 5 billion to repair oil infrastructure damaged during 1990-91. The war deeply affected the national economy for the 90’s. The Al-Sabah family has ruled since returning to power in 1991 and re-established an elected legislature. The country is usually referenced as a democratic pioneer in the region. Nevertheless, the 2010-11 uprisings and protests across the Arab world, staged small protests in February and March 2011 demanding citizenship, jobs, and other benefits available to Kuwaiti nationals. Youth activist groups rallied for an end to corruption and the ouster of the Prime minister and his cabinet.

Kuwait has a geographically small, but wealthy, relatively open economy with self-reported crude oil reserves of about 102 billion barrels about 9% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 95% of government income. Kuwait has done little to diversify its economy, but recent reforms could change the settings.

National strategy towards investment in infrastructures: • In January 2010, the government passed an economic development plan that pledges to spend up to USD 130 billion in five years to diversify the economy away from oil, attract more investment, and boost private sector participation in the economy.

• In order to support foreign investments, a commercial free trade zone does exist in Shuwaikh, the main port of the country. This trend will be supported by the new measures.

• Kuwaiti officials have committed to increasing oil production to 4 million barrels per day by 2020.

Key figures: • Total area: 17 818 km2.

• Government: constitutional monarchy (the current Emir is H.H. Sabah al-Ahmad al-Jaber al-Sabah).

• Population : 2,646,314 (July 2012 est.) includes 1,291,354 non-nationals.

• GDP : $149.8 billion (2011 est.)

• GDP per capita (PPP) : $40,700 (2011 est.)

• Unemployment rate: 1,7% • Urban population: 98%.

• Urbanization Rate: 2,1%.

Water resources vs. freshwater demand: Kuwait has a desert climate characterized by a long, dry, hot summer, with temperatures reaching more than 45°C with frequent sandstorms, and a cooler winter, with temperatures sometimes even falling below 4°C. The rainy season extends from October to May. Over an area of about 100 km2 annual rainfall is less than 100 mm, in the remaining part it varies between 100 and 300 mm. The long-term average annual rainfall for the whole country was about 176 mm, giving slightly more than 3.1 km3. In recent years rainfall has decreased to an average of between 106 and 134 mm/year.

Groundwater sources are in the zones of Al-Rudatain and Um-Aish and produce a slightly salted water. Only two groundwater sources, Rawdation and Umm al Eish, have a salt rate less than 1000 mg/l, compatible with domestic uses. Takings take place only in the renewable ground-water sheets, and represent over ten times the flow of refill. This indicates over exploitation since the 70’s. This was officially admitted in 2000, considering groundwater levels have fallen about 200 meters.

Per capita water consumption in Kuwait is very high, the third in the GCC, just after Saudi Arabia and the UAE. About 50% of withdrawals are used for agriculture. Consumption is increasing overall at 7% per year, with some local wastage (private pools, watering of gardens…). Current daily consumption is thus estimated at 600 million litres of fresh water.

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2.6

Bahrain

A brief history: The archipelago attained its independence from the British protectorate in 1971. Bahrain turned early to petroleum processing and refining and, facing declining oil reserves, it transformed itself, in the 80’s, into an international and regional banking center. Bahrain houses several islamic banks and about 300 financial institutions, attracted by the off-shore regime. Bahrain has a little industrial free trade zone in northern Sitrah island.

The financial sector currently represents 27% of the GDP; assets managed by banks reach USD 187 billion, or more than 14 times the GDP of the country.

Unlike Dubai, the financial centre of Bahrain has an image of transparency, mainly because it accommodates the seat of the MENAFATF (anti-money laundering). Furthermore, since 2006, it has a new central bank, the CBB, Central Bahrain Bank, that aims to develop and regulate the market.

As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006; the first FTA between the US and a Gulf state.

Apart from the financial sector, the economy of the country also depends on the aluminium, automobile mechanics, IT companies, consulting and tourism. Bahrain has indeed effectively become a choice holiday resort in the region.

Investment in infrastructures: • The Bahrain Financial Harbour (BFH), inaugurated in 2007, was supposed to gather all the Bahraini financial institutions at the same place. At this stage, it is a relative failure, because only 75 % of its objectives were attained by 2007. The complex should begin to open up and to integrate other, non-financial sectors.

• Following the settlement by the ICJ in the Hague about the border dispute with Qatar, Bahrain’s sovereignty - over the Hawar Islands has been granted. As a consequence it allows now the normalization of the relations between the two countries and leads to the construction of a bridge dike of 45km connecting the two States.

• Laws were improved in order to facilitate establishment of foreign companies. The taxation rate is very low and special investment laws allow foreign companies to invest in numerous domains such as tourism, services, business and technology.

Key figures: • Total area: 741 km2 • Government: Constitutional monarchy (the current Emir is H.H. Hamad bin Eisa Al Khalifa) • Population: 1,248,348 (July 2012 est.), includes 235,108 non-nationals • Median age: 30 years • GDP : $30.8 billion (2011 est.)

• GDP per capita : $27,300 (2011 est.)

• Unemployment rate: 10% (more than 20% for young people) • Urban population: 89 %/Urbanization Rate : 2% Water resources vs. freshwater demand: Bahrain has an arid to extremely arid environment: high temperatures, erratic and often scanty rainfall, high evapotranspiration rates (with peaks of over 10 mm/day in July), as well as high humidity levels due to the surrounding Arabian Gulf waters.

Total annual surface runoff is only about 4 million M3 and there are no perennial streams.

Bahrain receives groundwater by lateral under-flow from the Damman aquifer, which forms only a part of the extensive regional aquifer system, called the Eastern Arabian Aquifer. This aquifer extends from central Saudi Arabia, where its main recharge area is located at about 300 meters above sea level, to eastern Saudi Arabia and Bahrain, which are considered the discharge areas. According to Bah21

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rain’s Electricity and Water Authority (EWA), Bahrain consumes 532 million litres of water per day. This water consumption goes at 45 % for agriculture, 49 % for domestic use and 6 % for industry.

Bahrain has a very high rate of water consumption, noting that per capita consumption of water is about 500 litres in the Kingdom, compared to about 228 litres in Japan.

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3.

3.1

The GCC countries: water supply and water demand management Saudi Arabia

Desalination: Like many of its counterparts in the GCC, the Kingdom of Saudi Arabia (KSA) relies heavily and steadily on water desalination for its fresh water. The KSA is by far the world largest producer of desalinated water in the world; it owns nearly one quarter of the world total capacities with a production of 3.6 million cubic meters per day. Its involvement in the global production of desalinated water has placed the Kingdom before the United States and before another main player of the Gulf, the United Arab Emirates. In a smaller area, concerning the Gulf Cooperation Council (GCC), the involvement of Saudi Arabia has reached 45.5% of the regional production of desalinated water, also placing the country before the United Arab Emirates (38.15%) 18.

By 2014, water desalination supply in the Kingdom is forecast to reach 1.294 billion M³, compared with a previous forecast of 1.366 billion M³, Research and Markets said in its latest "Saudi Arabia Water Report Q1 2011”.

This graph from United Nations’ ESCWA report shows also the growth prospects in Saudi for desalination capacities:

MSF: Multi-Stage Flash/ MED: Multi-Effect Distillation/ RO : Reverse Osmosis The Kingdom of Saudi Arabia established in fact 30 desalination plants on the Red Sea and Arabian Gulf coast, which meet approximately 60 % of Saudi Arabia’s demand for drinking water. Desalination will for sure continue to grow in the KSA under the control of the Saline Water Conversion Corporation (SWCC) which already manages the 24 desalination plants on the Red Sea and six currently existing on the Persian Gulf.

As a proof, the SWCC has signed contracts with legal, strategic, financial, and technical advisers to build or expand 11 desalination plants with an additional 362,000 M³ of water per day to the existing capacity of 3,6 million M³. In Q3 2010, a SR 6.6 billion contract for a new desalination plant was awarded to a consortium led by South Korea's Doosan Heavy Industries and Construction Company Ltd. The Ras Al-Zour plant will have 2,400 MW of power and 1 million cubic meters per day (M³/d) water desalination capacity, making it the world’s largest IWPP. In terms of investment in new desalination capacities in the KSA, prospects are the following, for CAPEX in desalination, between 2007 and 2016: 18

Franck Galland «Arabie Saoudite : quand l’eau signifie opportunité », Mars 2010, Cap Mena.

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Independent Water and Power Projects (IWPP) and industrial zones: But the growing trend of desalination in the Kingdom will continue as long as the country will be able to afford it. Although technology has enabled energy efficiency for desalination units, the Kingdom of Saudi Arabia needs to manage the increasing cost of energy for fresh water in the years ahead.

This explains why KSA is now taking steps to introduce new sources of energy such as nuclear, solar and others in order to meet its growing demand for power. Domestic demand for electricity will reach 120 GW by 2032 with an average annual increase of 8 %. Huge domestic consumption (10% increase last year), and ageing fleet with current installed generation capacity of 45 GW, explains the strategy adopted by the Saudi authorities to achieve a new energy mix in the Kingdom. This will help in part to produce energy for water desalination units.

One of the best examples which illustrate this strategy is the Water & Electricity Utility Company, which has built the Marafiq complex, a combined cycle gas turbine plant on a BOOT contract basis in Jubail.

Until the completion of the Ras Al-Zour plant, Marafiq is still the world’s largest independent water and power project (IWPP). The plant is expected to produce 800,000 M³ of water per day and 2,746 MW of electricity.

The Marafiq example illustrates the fantastic growth opportunities existing for water services management companies in KSA’s new industrial zones. Marafiq controls indeed sizeable water and wastewater facilities in Jubail & Yanbu, with total current, under-construction, and planned capacity of 664,000 M³ /day.

Under these circumstances, the O&M opportunity for industrial zones’ water assets such as those of Marafiq is estimated to amount in millions of USD. As a concrete example, in May 2011, Marafiq formed a joint venture with the French water company Saur to operate and maintain water and wastewater assets in the industrial city of Jubail. The contract for the JV takes in O&M assets covering water production distribution and wastewater collection and treatment, as well as seawater cooling for industrial purposes. This success for Saur comes a year after it picked up the five-year contract for water distribution and network management in Mekkah/Taif (see after).

Water transmission systems: The Saudi Government has also put in place an extensive water transmission system, which is one of the largest in the world, with more than 900-kilometer pipe system that will pump nearly 4 million cubic meters per day of water from Jubail Industrial City to the capital of Riyadh.

The problem for the Kingdom is that over 80% of Saudi Arabia’s water supply is withdrawn from non-renewable groundwater aquifers. At present abstraction rates, it is estimated that these aquifers contain only a 15-25 year supply19.

19

Cited by Dr. Laura Diaz Anadon, Dr. Arani Kajenthira and Dr. Afreen Sidiqqi, in « A new case for wastewater reuse in Saudi Arabia : bringing energy into the water equation », Dubai Initiative, Policy Brief , Belfer Centre for Science & International Affairs, Harvard University.

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As water from aquifers is becoming scarce, Riyadh is for instance increasingly dependent on the desalinated water coming from the eastern coast of the country, which accounts now for 70% of the fresh water used in the capital.

In this very specific field it is expected that O&M contracts will also take place in the years ahead for water transmission systems, such as that in Jordan. The DISI-Aman project is a water extraction and conveyance system which will supply the Greater Amman area with 100 million M³/year of potable water. 325 kms of pipeline will convey water to Amman from a non-renewable aquifer located at the Saudi border.

The project is executed through a 25-year contract on a Build Operate and Transfer (BOT) basis between DIWACO (a special project company 90% owned by the Turkish Gamma Group) and the Water Authority of Jordan (WAJ), an agency within the Ministry of Water (MWI).

Water Reuse: The need to protect natural ground water resources which are non-renewable, and the permanent need to develop new alternative water sources,especially for a city like Riyadh which desperately needs more and more water, have convinced Saudi Arabia to become a key user of water re-use technologies in the years to come.

As a consequence, the Kingdom has launched a major initiative for the use of treated sewage effluent (TSE) for non-potable purposes in major cities such as Riyadh, Jeddah, Medina & Makah.

Under this government initiative, market segments have been identified for TSE reuse in industry, commercial district cooling, public parks, landscaping, and of course agriculture which represents an expected demand of 1,350,000 M³/day for Riyadh and its neighbourhood only20. According to a NWC study, if the treated effluent is sold at a conservative price of USD 0,53 a cubic meter, it will bring revenues of about USD 4 billion over a 25-year period21.

For the time being, TSE in Saudi Arabia is primarily reused in large cities for the irrigation of non-edible crops (36%), land discharge (34%), sea discharge (18%) and industrial purposes, groundwater recharge and landscaping (12%) 22.

Only 18 % of treated water is reused in Saudi Arabia. The NWC estimates this figure could rise 70 per cent over the next 25 years23.

20

Eng. Fawaz Bahlas, National Water Company, « Business Opportunities in Water & WasteWater Industry in Saoudi Arabia/Public sector perspective », presented to the Singapore International Water Week 2009.

21 Digby Lidstone, « Kingdom tests case for privatisation », MEED, Gulf Wastewater, 2009.

22 B. Jimenez and T. Asano, Eds., « Water Reuse : an International Survey of current practice, issues and needs » (Scientific and Technical Reports). IWA Publishing, 2008.

23 Digby Lidstone, « Kingdom tests case for privatisation », MEED, Gulf Wastewater, 2009.

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According to Global Water Intelligence, investment in new water reuse capacities between 2007 and 2016 will be as follows:

Water demand management: Apart from increasing its water resources, the Saudi Government is also focusing its efforts on water demand management. Saudi Arabia is the 3rd largest consumer of water in the world. This situation is no longer sustainable for the Kingdom where fresh water reserves are now failing below the 250 m3 of water per habitant per year.

The reform probably started in the late 1990’s by which time it had become a pressing and wide scale requirement to catch up on delays which could prove fatal in the short-term for the Kingdom. Leakages are indeed far too high for a country where water scarcity has become a threatening reality.

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Presented to SIWW 2009, Singapore, 25 June, 2009, by Eng Fawaz Bahlas (NWC)

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The first major achievement was the establishment, in July 2001, of the Ministry of Water and Electricity (MOWE), which subsequently recovered manu militari and centralized responsibilities for drinking water and sanitation, previously shared between the Ministries of Agriculture and Water and Municipal Affairs and Housing.

The aim of this new organization was clear: to introduce a new contractual framework allowing international private groups to provide Saudi Arabia with their operational efficiency and technical expertise; revise water rates; urgently introduce a collective initiative in order to reduce the consumption of domestic water; reduce the Non-Revenue Water (NRW), which characterize abnormal losses in water supply systems.

In Riyadh about 60% of the city's valuable water supply is lost through leakage in about 12,000 km of pipes that transport water to the city's 5.5 million population expected in 2010, which was expected to consume more than 150 litre par day and per person 24.

The National Water Company also estimated that water losses due to leakages were about 1,1 million M³/day, which are calculated to be the equivalent of fresh water produced by 9 desalination plant’s. The desalination plants with the highest capacity in Saudi Arabia are Khobar II and Shoiba I.25 (see graph above).

The budget awarded so far - and expected - by the Kingdom to fulfil those strategic challenges is impressive. It is estimated by the National Water Company that, 14 billion USD will be needed in CAPEX and 7 billion USD in OPEX over the next 20 years 26 to fulfil its objectives in water distribution coverage throughout Saudi Arabia For this reason opportunities in the KSA’s municipal market are considered to be the most important in the MENA region. For example, 2008 alone saw the Ministry of Water and Electricity (MoWE) award more than 743 contracts worth over 3.1 billion USD (SR 11.9 billion).

According to Global Water Intelligence in a 2011 report, capital expenditures in water services management is expected to grow significantly in the years ahead:

The key player in charge of managing water demand and supply, as part of Saudi Arabia’s urban water sector restructuring, is the National Water Company (NWC), set up to provide services to 13 regional directorates previously managed by the Water & Electricity Ministry.

24

« Full audit of water and wastewater services in the city of Riyadh », Action plan and recommandations report, May 2006, Seureca.

Ibid Loay Al-Musallam Deputy Minister for Planning & Development Ministry of Water & Electricity (MOWE) Kingdom of Saudi Arabia, « Wastewater Treatment Plant Privatization initiatives in Saudi Arabia », Presentation to SAWEA 2007 Workshop, Dhahran.

25 26

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Officially established in January 2008, NWC has more precisely the operational responsibilities of: -

underground water production & treatment which represent less than 40% of the urban water supply; water distribution management; customer service; wastewater collection & treatment.

NWC started its operations on 1st of June 2008 in Riyadh and Jeddah, through initially two seven-year management contracts signed with major private operators in Q2 2008: Veolia Environnement for the Riyadh Business Unit of the NWC, and Suez Environnement for the NWC’s Jeddah Business Unit; both of them aimed at bringing qualitative changes in the urban water & wastewater sector.

As previously said, less than two years after, another French player, the Saur group was also awarded along with the Saudi-based Zamil Operations and Maintenance Company, a five-year contract for water distribution and network management in Mekkah and Taif.

This trend in the municipal market is expected to continue for the management of networks of cities such as Dammam and Al-Khobar conurbation, as well as Medina, which are expected to be the next on the list. Consultants have been appointed for those next stages of the PPP process.

The management contracts signed in Riyadh, Djeddah and Mekkah/Taif could also be turned into concession contracts, according to NWC plans.

Waste water: During the Water Reuse Summit organized by GE in April 2011 to explore water reuse solutions that can support the Kingdom and the MENA region in securing a sustainable water supply for the future, H.E. Eng. Abdullah Bin Abdul Rahman Al Hussayen, Minister of Water and Electricity, Kingdom of Saudi Arabia, said that: “With the Kingdom of Saudi Arabia being one of the fastest growing economies in the Middle East, wastewater and water re-use issues need to be addressed now in order to sustain this rapid growth” 27.

In terms of Waste Water Treatment (WWT), the Saudi market can be seen as slightly late compared to what has been done elsewhere in the MENA region. It is considered that almost 30% of WWT capacity is outsourced in the MENA and mainly in O&M contracts especially in Egypt (see for instance the Gabal Asfar contract of Degremont, a subsidiary of the French group Suez Environnement).

With this in mind, KSA currently represents less than 10% of this O&M market for WWT Plants, which is estimated in the MENA region at almost 400 million USD in terms of revenue.

The Kingdom’s sewage collection coverage is currently near 50 %. So wastewater treatment plants and networks now require huge investment from the Saudi authorities. These are estimated to be at USD 23 billion in CAPEX and 10.4 billion in OPEX for the next 20 years28.

27

« GE organises water re-use summit in Saudi Arabia », Anoop, April 5, 2011.

Eng. Fawaz Bahlas, National Water Company, « Business Opportunities in Water & WasteWater Industry in Saoudi Arabia/Public sector perspective », presented to the Singapore International Water Week 2009.

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According to its own analysis, Global Water Intelligence is expecting a huge growth of capital expenditures in wastewater treatment:

Waste water is of the utmost concern for the authorities as the loss of life and property during the flash floods of November 25th, 2010, was widely blamed on the inadequacies of Jeddah’s wastewater network, which only seems to cover 22% of the local population. This dramatic situation also highlighted the extent to which KSA is lagging behind other Gulf States in providing comprehensive wastewater collection and treatment services.

As a consequence the NWC has announced it will spend USD 17 billion in the 14 cities that are to have private-sector sewage managers in the next five years, as it has done since 2008 in water services management.

As concrete examples of this new governmental willingness, projects to be tendered soon include two sewage treatment plants (STPs) in the Riyadh area (capacity to process 100,000 M³/day). In Jeddah, bids are to be invited soon for the second phase of the STP in King Abdulaziz International Airport, which will increase capacity by 250,000 cubic meters a day, and a 700,000 cubic meter a day sewage lift station.

Industrial Water: Some case studies performed by Saudi Aramco have shown that efficient management of water in oil and gas production, as well as the reuse of water consumed to produce oil and gas, could possibly save 31% of KSA’s total industrial water demand 29.

According to prospects, 2 million M³/day (~20M bbl/d) of oil was projected to be produced in MENA in 2010, and approximately 4 million M³ of water/day is estimated to be produced with the oil.

In the field of oil refining capacity, approximately 900K M³/day of process and effluent water (55% / 45% respectively) is required. This could represent in the long-term good opportunities in O&M or management contract for water services.

However, so far, Saudi oil companies have considered management of produced water as their core business and do not want to outsource it. Similar to upstream, process water for refining is considered part of the core operations of the Saudi oil operation and is unlikely to be outsourced.

However, while the majority of water management in these O&G business is currently performed in-house, outsourcing in industrial zones is becoming more frequent. As previously said in this report, in May 2011, Marafiq formed a joint venture with the French water company Saur to operate and maintain water and wastewater assets in the industrial city of Jubail.

29

Cited by Asma El Kasmi, director of the Arab Academy of Water, « Water and Energy seminar », (Re)Sources, Water & Energy Network for Development, Abu Dhabi, March 2011.

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The Saudi Industrial Property Authority (MODON) also oversees and provides water utilities to over 20 industrial cities with some project under development such as Sudair (the largest industrial zone to be developed by Modon with a total area of >200 Km2) and Al-Kharj (approximately 100 Km2).

So far, MODON has decided to outsource most of its water utilities through BOT contracts, such as Jeddah 1st and 2nd, Dammam 2nd, Riyadh 2nd, Al-Ahsa 1st, and Al-Qassim cities.

Mainly local subcontractors have benefited from this trend such as Tawzea, Mowah, and ICDOD (Industrial Cities Development and Operation Company).

3.2

United Arab Emirates

Organization of the water sector: Till the seventies and the rapid economic and demographic growth of Abu Dhabi, the Emirates were dependent solely on groundwater resources. Becoming more and more scarce, freshwater from underground aquifers was progressively replaced by desalinated water, which made it possible to sustain the growth of the country.

At the same time the water sector needed a complete reorganization and was to be regulated by a public agency, relatively independent from the Emirate’s central government: the Regulation and Supervision Bureau (RSB) for the Water and Electricity Sector in the Emirate of Abu Dhabi which enforces law, technical regulation and price regulation.

The water and electricity companies were in fact created in 1999, following a 1998 piece of legislation which allowed for the break-up of the old Water and Electricity Department (WED). This included the formation of the Abu Dhabi Water and Electricity Authority (ADWEA), which retained sole ownership of these companies at the time. However, in 2000, the first Independent Water and Power Producer (IWPP), a joint venture (JV) between a foreign partner and ADWEA called Emirates CMS Power, was created. A privatization process took place for water and power supply plants 30.

Since then, eight private Integrated Water and Power Production (IWPP) companies have been allowed to operate on the Build-OwnOperate (BOO) formula, and are producing and selling desalinated water to the Abu Dhabi Water & Electricity Company (ADWEC).

ADWEC is owned by the government through ADWEA and is the single buyer of desalinated water and the single supplier of water for the distribution companies.

The Abu Dhabi Transmission and Dispatch Company (TRANSCO), also a public company, transports water from the desalination plants to the networks of the distribution companies.

The Abu Dhabi Distribution Company (ADDC) sells water and electricity to approximately 216,000 customers in Abu Dhabi and its suburbs. The Al Ain Distribution Company (AADC) does the same in Al Ain. Both are owned by ADWEA. They are not expected to be privatized or to sign O&M outsourcing contracts in network management with private companies.

ADWEA continues in fact to play a central role in the Emirates water and waste water policies. The Chairman of ADWEA is a member of the Executive Council, which is managed by the Crown Prince, and is ranked just below, in terms of protocol, behind the Ruler of Abu Dhabi.

Desal and water production: All production sites along the coast use the combined-cycle method to produce electricity, which are ‘co-generation plants’. The waste steam from the turbines is passed to a desalination unit, which uses thermal desalination techniques to produce potable water.

30

Regulation & Supervision Bureau, « Water and Electricity Sector overview 2008-2009 ».

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Some reverse Osmosis plants also exist but are located in the east of the UAE in Qidfa (Emirate of Fujairah) because this area is less salty than the Gulf.

The output capacities of the major water and electricity power companies in the UAE are 1500 MW and 100 million gallon /day, the most important being Taweelah Asian Power Arabia Power and Shuweihat International Power.

In terms of prospects, an O&M contract was planned in 2011 for Masdar Plant, and a BOT project for Hassyan IWPP, in Duba誰 and Northern Emirates.

The following graph published in a 2011 report of Global Water Intelligence shows how desalination capital expenditures (CAPEX) are going to increase drastically, while CAPEX in water distribution networks remain stable:

Groundwater recharge: Artificial groundwater recharge with desalinated seawater has been piloted in 2003 near the Liwa Oasis. The construction of large-scale recharge facilities was begun in 2008 and is due to be completed by 2013.

The objective is to create a 90-day reserve instead of the current 48-hour reserve for drinking water supply, in order to protect the Emirate against the risk of terrorist attacks or oil spills which risk shutting down the entire water supply.

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This newly implemented technique will help to increase natural groundwater recharge, estimated at about 300 million cubic meters per year.

Waste Water Treatment and Reuse: The sanitation sector was initially left out of the reform and remained the responsibility of the municipality, despite heavy investments that were required for wastewater treatment and reuse. A public joint stock wastewater company was created only in 2005 with the transfer of assets from the two Abu Dhabi municipalities to form the Abu Dhabi Sewerage Services Company (ADSSC).

In 2008, wastewater in Dubaï reached crisis point and stories of beaches being polluted as a consequence of illegal sewage trucks dumping were reported in the international press. At the same period, Dubaï, as Abu Dhabi, deeply needed to act because their existing plants were overloaded by larger than expected inflows, due to the local population growth.

In 2009, Abu Dhabi government issued a decree, splitting ADSSC off from ADWEA, with a direct reporting line to the Abu Dhabi Executive Council.

So currently there is only one major provider of the full range of wastewater services, namely Abu Dhabi Sewerage Services Company (ADSSC). However, new private wastewater treatment plants have been established to take wastewater from ADSSC, treat it and then return the treated product to the Company.

The model for these companies is similar to the IWPP project finance arrangements described earlier, in that 60 percent of a company’s equity is owned indirectly by the Abu Dhabi Government. The remaining 40 % is privately owned.

Both these major ISTP companies are established on a build, own, operate and transfer (BOOT) basis, rather than the BOO system employed in water the production sector.

However the crisis which hit Dubaï in 2008 put a hold on ambitions for new waste water treatment projects which have been delayed. Two wastewater treatment plants planned for the world’s largest waterfront development - UAE developer Nakheel’s Dubai Waterfront - have been put on hold due to the delays in the wider project. The most notable setback was the termination of the contract awarded to France’s Degremont and Belgium’s Besix for the construction of the largest WWTP to use membrane biorector technology, which combines sludge treatment and filtration.

In terms of prospects, Global Water Intelligence is now expecting a continuing growth in waste water capital expenditure:

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ADSSC also provides treated water and bio-solids to the Municipalities for horticulture purposes. Water ReUse is indeed an area of growing interest in the UAE, due to the lack of freshwater in the Emirates. For this reason Abu Dhabi aims to reuse all of its treated water in the long term. The primary applications are for irrigation, firefighting and industrial cooling, but local authorities are als o keen to use it for district cooling in place of more expensive desalinated water 31.

TSE for irrigation could really help to decrease the part of agriculture in the Emirates’ water consumption, which is one of the largest in the GCC.

The Masdar City project is a unique approach in the GCC countries on how water will be recycled. Headed by the Abu Dhabi Future Energy Company (ADFEC), and launched in 2006, the project should finally be completed for its phase 1 in 2015, since the financial crisis impacted very seriously on the Emirates.

Final completion is now scheduled to be between 2020 and 2025, with an estimated cost to the city around 20 billion USD. Masdar City will be the latest of highly planned, specialized, research and technology-intensive municipalities that incorporate a living environment. At the end of the project, it will employ a variety of renewable power resources and water efficiency techniques.

Approximately 80 % of the water used will be recycled and wastewater should be reused "as many times as possible," with this grey water being used for crop irrigation and other purposes.

Specific focus on Dubai: The Dubai Electricity and Water Authority (DEWA) is currently managing the consequences of the financial crisis faced by the Emirate of Dubai.

31

Elisabeth Bains, « Emirates struggle to cope », MEED, Gulf Wastewater, 2009.

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Until the crisis, demand for potable water had been rising at about 10% a year, one of the highest growth rates in the world. But the effect of the financial crisis has arrested growth. Although water demand will still see a significant increase in the coming years, it seems that existing capacity and new capacity under construction will suffice for a number of years, as shown on the following graph:

That’s the reason why some projects have been recently cancelled such as the Hassyan project which was aiming to build power and desalination facilities to serve large-scale developments including Dubai World Central, Dubai Industrial City and Dubailand, which, by themselves, have also been seriously hampered by the effects of the financial crisis.

There have now been claims that the demand for water has been affected so much that even projects which are currently being commissioned are not being used to the full.

So the situation of DEWA is not easy for the moment, all the more so that, at the same time, DEWA is now taking charge of the assets of the collapsed private utility Palm Water. This includes an unused 32,000 M3/d sewage water reverse osmosis plant in Palm Jumeirah. which had civil works completed but was suspended before membranes were installed.

3.3

Qatar

Organization of the water sector: Compared to its immediate neighbours, there are still many institutions in Qatar in charge of water. The main institutions responsible for water development, planning and management are: - the Qatar General Electricity and Water Corporation (KAHRAMAA), which is responsible for providing desalinated water for drinking and industrial use; - the Qatar Electricity and Water Company (QEWC), which is responsible for the desalination of water and selling it to the General Electricity and Water Corporation; - the Drainage Affairs of Public Work Authority (ASHGAL), which is responsible for the collection of wastewater and its treatment and distribution to the farms and the Doha landscape; - the Supreme Council for Environment and Natural Reserves (SCENR), responsible for the protection of water resources; - the Planning Council, concerned with planning for water and other resources.

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Due to the lack of water in the country, a Permanent Water Resources Committee (PWRC) was established in April 2004 under a decree

by H.H. the Emir of the State of Qatar and via Decision No. 7/2004 of the Council of Ministers32.

Its objectives principally include contributing to secure ample water resources in quality and quantity for a range of uses of the Qatari society and the reinforcement of public awareness of the importance and value of water. The situation of Qatar is indeed critical in terms of water scarcity.

Desal and power supply: Desalination in and under the control of the Qatar Electricity and Water Company, which is a public shareholding company founded in 1990, for the purpose of acquiring and managing power generation and water desalination stations. Approximately 43% of the shares of the company are owned by the Government of Qatar and the remaining 57% is held by institutions and private individuals.

The company is one among the largest joint stock companies in the region. It owns and operates power plants and desalination stations.

During the past ten years, the company has increased its production capacity through the development of expansion projects and new stations, including several Power Generation and Water Desalination projects. For instance, Ras Laffan Power Company, where QEWC has recently increased its ownership to 80% by purchase of shares of AES Corporation, has a production capacity of 750 MW of power and 45 M gallon/day of water.

The second Independent Power Project in Qatar is Q Power Project, which has a power generation capacity of 1025 MW and water desalination capacity of 60 M gallon/day. QEWC holds 55% ownership in Q Power.

With the completion of projects in progress, QEWC portfolio of power generation capacity will reach more than 60% of the total power generation in the state and water desalination capacity is to reach more than 70% of the total water desalination capacity the State of Qatar.

Girtas Power Company project is the latest project supported by QEWC, which owns 45% shares of Ras Girtas Power Company, along with Qatar Petroleum (15%), GDF Suez through International Power (20%), Mitsui & Co. (10%) plus Chubu Electric Power Company and Shikoku Electric Power Company.

32

ÂŤ Qatar country profile Âť, Aquastat, 2008 Version, Food and Agriculture Organization of the United Nations.

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Inaugurated the 1st of June 2011, the USD 3.7 billion power and water plant combined desalination and power facility now has the capacity to produce 286,000 M³/day of water and 2,730 MW of power has been opened in Qatar and will contribute around 43% additional electricity to the Qatar grid.

With another project such as Ras Girtas, QEWC appears to have developed the necessary plans to ensure that the company is keeping pace with Qatar’s growing demand for electricity and water. Estimates suggest that demand for water in Qatar will almost double from 1.1 million M³/day in 2011 to around 2.1 million M³/day by 2020.

In order to face the growing demand for water, expected capital expenditures are the following according to a 2011 Global Water Intelligence report:

For internal and regional security reasons, following the model adopted by Abu Dhabi, Qatar is also trying to build up water reserves in order to meet the country's needs for a week in case of an emergency. Indeed, according to experts, existing desalinated water reserves may only last one-and-a-half days in an emergency.

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Water distribution and demand: In July 2000, the Qatar General Electricity & Water Corporation, "KAHRAMAA", was established in July 2000 to regulate and maintain the supply of electricity and water to its customers, focusing on transmission and distribution of power and water.

Substantial growth in Qatar's urban areas, in conjunction with the expansion of both agriculture and industry, has led to an enormous increase in the size and the demands placed on the 1926 Kms long’s water network and the related facilities managed by KAHRAMAA. The distribution network is now planned to reach a total length of 4682 Kms by 2012, with a total budget allocated for extension projects between 2009 to 2012 of 3 billion USD (the same amount of money was spent by KAHRAMAA between 2000-2008!).

But the Qatar Electricity and Water Company (QEWC) will have to look at options for new desalination capacity at its existing power and water facilities, as the country’s general offtaker KAHRAMAA seeks to find more than 400,000 M³/d of extra water supply by 201633.

KAHRAMAA, is believed to be looking for an extra 318,220 M³/d of water capacity to be added to the country’s network by April 2015, and a further 90,920 M³/d by April 2016 to deal with rising demand 34.

Water for irrigation: Land suitable for irrigation in Qatar totals 52 128 ha. Due to its lack of arable land and its high dependency on importation of most of its agricultural products (90% imported), over the last ten years the Qatari authorities have decided to implement irrigation research and studies to meet the country’s growing concerns about food security. Any disruption in food supply makes Qatar prone to food insecurity.

Qatar imports vegetable products mainly from GCC countries, followed by the European Union (EU), Asia, and the United States; beef, veal, mutton, and lamb mainly from Australia and New Zealand; and poultry from neighbouring Arab countries.

In Qatar, 98% of groundwater withdrawals in recent years have been for agriculture, this is unsustainable given recharge rates.

Ground water recharge is only 56 million cubic meters per year against usage of 220 million cubic meters per year. It means Qatar is in “Water Overdraft”. It has overdrawn almost 2.1 billion M³ of water in the last 30 years. Desertification, depletion of groundwater aquifers and increased land salinity has reduced land suitable for agriculture from 10,039 hectares in 1999 to 6,928 in 2004.

33 34

Global Water Intelligence, « Qatar needs to construct new desal capacity over the next five years to meet the rising demand for water », Vol 12, Issue 7, July 2011.

Ibid

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In this context, new irrigation techniques are urgently needed for the country. They include irrigation with saline water, optimizing the use of TSE for forage production, the economics of protected agriculture when using desalinated water, optimum use of water resources in agriculture and modernizing irrigation in the Qatari farm.

After the food crisis of 2007 and 2008, Qatar recognized that reliance on external sources for its food supply was no longer a sustainable strategy and decided to launch the Qatar National Food Security Program (QNSFP). This forward-looking policy-making initiative is part of the Office of the Heir Apparent, HH Sheikh Tamim Bin Hamad Al-Thani. Its mandate is to ensure that Qatar puts in place the right systems and mechanisms that will help the country achieve food security.

In this field PPPs are expected to play a significant role, and more precisely in the area of renewable energy to desalinate seawater for agricultural purposes.

Qatar also launched the ‘Global Dry Land Alliance’, whereby arid countries that face similar problems to Qatar’s will join and implement the necessary preventative and responsive policies to combat food insecurity.

Increasing treatment and ReUse of wastewater: In order to enhance food security, water reuse techniques will be of utmost priority for Qatar.

So far Drainage Affairs already considerably increased the volume of treated sewage effluent (TSE) through the connection of more residential areas to the public sewer and extension to Doha South and Doha West Treatment Plants.

The amount of TSE increased from 46 million M³ in 2004 to 58 million M³ in 2006 and the amount reused in forage production and irrigation of landscape increased from 39 million M³ to 44 million M³ during the same period 35.

According to forecasts, wastewater reuse is expected to concentrate a USD 95 million investment program each year according to a 2011 Global Water Intelligence report.

The development of these new techniques are included in the implementation of a large-scale investment plan in waste water, as shown on the following graph:

Sports events as an opportunity for the water and waste water sector: Qatar’s successful bid to host the FIFA World Cup in 2022 will present new investment opportunities that will flow into the country and contribute to its ongoing growth.

35

« Qatar country profile », Aquastat, 2008 Version, Food and Agriculture Organization of the United Nations.

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Qatar will be investing into rebuilding and revamping its infrastructure which will include building an estimated 25 billion USD metro and a 14 billion USD international airport in Doha. Water infrastructures will be part of this new trend.

Public-Private Partnerships or PPPs are likely to benefit some local firms since the World Cup will create opportunities for local enterprises to form strategic external alliances and to connect to global value chains through government support.

In March 2011, KAHRAMAA has already unveiled projects worth QR52bn to further develop and expand the water and electricity networks across the country ahead of the FIFA World Cup in 2022. Plans for the next 10 years include development of electricity and water networks at an estimated cost of QR30bn and QR22bn, respectively.

The project includes for example the establishment of large reservoirs with a capacity of 1,902 million gallons of water to supply drinking water across the country through pipelines stretching over 183 Kms.

3.4

Oman

Water and electricity supply: The Oman Power and Water Procurement Company (OPWP) is the single Buyer of power and water for all IPP/IWPP projects within the Sultanate of Oman and is responsible for ensuring that there is sufficient electricity and water production capacity available at the lowest cost to meet the growing demands in the Sultanate of Oman.

As part of the OPWP responsibility, the OPWP undertakes long term generation planning and publishes a seven-year statement. The last 7-year statement issued by Oman Power and Water Procurement Company (OPWP), covering the outlook for demand over 2011-2017, outlines the likely need for new power generation and water desalination capacity within the Main Interconnected System (MIS), which is the largest part of the system, covering the northern part of the Sultanate.

Average 'expected demand' for electricity is anticipated to increase from 1,924 MW in 2011 to 2,454 MW by 2017, entailing an average growth rate of about 9 per cent per year. Peak 'expected demand' is projected to increase at around the same rate, rising from 3,500 MW to 6,371 MW by 2017.

Two new major desalination plants are also expected to be built in Oman. The two new plants, which will have a combined capacity in the region of 400,000 M³/d, will be built at Qurayat and Suwaiq, on the coast, west of Muscat. The tenders’ launching is expected for beginning of 2012.

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Figures from the country’s recently published seven-year demand forecast predict that water demand will outstrip current supply levels by about 522,000 M³/d by 2017. Demand for water is growing at about 8% a year, and the country, planning to eliminate the use of groundwater for domestic purposes within the next five years, has made it mandatory and urgent to search for extra water.

About half of this shortfall should be covered by the Ghubrah project that is currently approaching the bidding stage, and the soon-to-be commissioned Salalah IWPP (68,000 M³/d & 445MW). But this still leaves a gap of some 261,000 M³/d, largely accounted for by the northern coastal regions of Barka and Sohar 36.

During the past decade, Omani law has required all new power only and power-and-water capacity to be procured through a privately financed IPP or IWPP structure. However, the law does not apply to pure desalination projects.

The Sultanate has also pushed the model further than any other country in the region. For instance, the privatization law that brought in the use of the IWPP model could potentially allow for further liberalization by letting plant owners sell water or power directly to customers, rather than dealing solely with OPWP. Water demand management: The Public Authority for Electricity and Water is the Authority established under Law of Public Authority for Electricity and Water (Royal Decree 58/2009). The objectives of the Authority include development and enhancement of the government’s policy in respect of the development of the unrelated water sector and electricity and related water sector, securing the electricity supply to all the citizens in all the areas of the Sultanate, and encouraging private sector to invest in unrelated water and electricity sector.

Under its control, campaigns to reduce network water losses have been recently implemented so that extra water from desalination building plans is not wasted.

Oman’s water authority has decided to embark on a spending programme to reduce the amount of water lost through leakages and billing errors – and reduce the strain on desalination and treatment facilities.

So PAEW is believed to be investing in active leak detection technology and advanced metering and billing equipment, which it hopes will save it the equivalent of USD 39 million a year in lost water revenue37.

Wastewater treatment and Reuse: Contrary to the rest of the GCC countries, responsibility for Oman’s wastewater is split between five entities covering different regions in the Sultanate. Local private companies and public companies in fact share the wastewater treatment market of Oman.

36

« Supply Agreement with the PAEW, covering inter alia the Bulk Supply of Desalinated Water from a number of Power and Desalination plants», Global Water Intelligence, Vol 12, Issue 6, June 2011.

37 « Planning to plug the leaks », Global Water Intelligence, Vol 12, Issue 6, June 2011.

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The main group is Haya Water, which oversees wastewater services in the Muscat governorate, the most populous of the Sultanate’s region.

Salalah Sanitary Drainage Solutions looks after Salalah City in the Dhofar region, and Sohar Development Office within Muscat Municipality looks after Sohar province.

Lastly Dhofar Municipality takes care of the rest of Dhofar region which is not covered by Salalah Sanitary Drainage Solutions. The Regional Municipalities & Water Resources Ministry is responsible for the rest of Oman.

The Sultanate’s wastewater treatment capacity is estimated to be 335 990 M³/d by 2015 38.

Much of the current activity in Oman’s wastewater sector centers around the 4 USD billion waste water project, developed by Haya Water.

The project aims to connect 80% of the population of the Muscat governorate to the wastewater network by 2014 and 90% by 2025.

In November 2008, Haya announced plans to issue tenders in 2009 for four treatment plants. The largest of the four, Daisait, with 50 000 M³/d of treatment capacity is due to begin operating in December 2011.

Additional wastewater treatment capacities are expected to follow, Haya aiming in particular to issue a tender for the expansion of existing plants.

In terms of wastewater reuse, in 2006, 37 million M³ were treated and reused in Oman. So far they are limited to landscape irrigation using sprinkler, drip and bubbler systems, but new applications could be implemented in the years ahead.

Oman’s experience in successfully facilitating IPOs of its independent power and water projects could provide some guidance to move towards the introduction of private finance into its wastewater sector. In the mid-term, the most promising prospect for investors is the potential part-privatisation of Haya Water, Oman’s largest wastewater utility company, which is operating under a 30-year wastewater concession in the governorate of Muscat.

3.5

Kuwait

In March 2011, the risk-assessment consulting firm Maplecroft issued a report in which Kuwait, together with the UAE and Oman, was named among the 10 nations with the “most extreme risk” of interruptions to water supply. Following Mauritania, which has the highest risk ranking of the 162 countries surveyed, Kuwait is considered as most vulnerable to having an insufficient quantity and quality of water.

38

Perry Williams, « Muscat modernises the network », Gulfwastewater, MEED, 2009.

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Moreover, Kuwait is now facing increasing infrastructure problems due to the lack of investment and maintenance during past decades.

Water and electricity production problems and extra capacity needs: At the beginning of 2011, the country's parliament called a special session to discuss the power-related concerns. Electricity and Water Minister Badr al-Shuraian said on that occasion that the country's electricity outages during long summer months would come to an end of 2012, when the new Subbiya power station was in operation.

Oil-rich Kuwait has fallen behind its Gulf neighbours in its electricity production and as series of power cuts have occurred in past summers. Kuwait came close to pushing its power capacity to its limits in the summer of 2010, as record high temperatures placed extra pressure on power plants throughout the country.

It now aims at filling the gap as part of an ambition to double its electricity production capacity by 2020. Kuwait's current capacity stands at around 11,300 MW and power needs call for an additional 10,000 MW over the next 10 years. This lack of power supply capacity has already had heavy consequences on water production and distribution.

At the same time, Kuwait is seen as one of the GCC countries with the least secure water supplies. Moreover, according to the KISR (Kuwait Institute for Scientific Research), the country recorded in 2010 the highest consumption of water on a global scale with around 500 litres per capita.

For this reason Kuwait is now asking for a better water demand management with domestic water savings, while trying in parallel to develop new alternative water resources. Therefore Kuwait is now aiming at raising its desalinated water capacity by 75 percent in the next five years. Its desalination capacity was 2 390 000 m3/d in 2008.

In November 2010, Kuwait's electricity ministry said it would spend about USD 21.3 billion in the next four years on power and water projects in its 2010-2014 development plan.

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Projections of extension of Kuwait’s desalination capacities are the following:

At the end of February 2011, Kuwait signed an initial USD 1.5 billion in power and water contracts.

The contracts signed in emergency are planned to relieve the pressure and include the second phase conversion of the southern Al-Zour power plant into the combined cycle system through installing additional gas turbines. It also includes the building and repair of five water reservoirs at a capacity of 80 million gallons each in western Finats area. The reservoir project will cost USD 170 million and take three years to be completed.

The trend for new contracts in water supply systems and water reservoirs is expected to continue in the years ahead according to the forecasts of Global Water Intelligence’s experts:

Wastewater treatment: Kuwait was one of the first Gulf States to build a wastewater network in the fifties. Yet as in many other areas in Kuwait’s infrastructure, the country‘s ageing water and waste water plants and networks have had many problems coping with demand during past decades.

The situation seems to be in particular more and more tense for waste water. During the past five years, the Public Work Ministry, which oversees waste water collection and treatment, was obliged to use tankers in order to transfer sewage to secondary plants, when main 44

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waste water treatment units were malfunctioning. Local media have for example reported that, in 2008, raw sewage was also dumped into the sea39.

The obvious deterioration of Kuwait’s WWT plants has forced the authorities’ hand. Under plans drawn up by the Public Works Ministry, Kuwait plans to install 800 000 M³/d of additional capacity by 2015.

These expansion projects are accompanied by an overhaul of the local wastewater network, which covers almost 70% of the country.

Water reuse is also considered as an on-going technology to be developed in the country, and would represent, according to a 2011 Global Water Intelligence report, annual capital expenditures between USD 50 and 60 million.

If 70% of treated effluent is reused in Kuwait, mostly for irrigation, with the remainder dumped at sea, the ministry was planning to achieve total reuse by end of 2011, doubling the amount of treated water used by farms and supplying wastewater to the Al-Wafra agricultural area.

New wastewater and water reuse projects are so expected to grow steadily in Kuwait according to the forecasts of Global Water Intelligence:

New cities and urban mega development plans: In 2009, the Kuwaiti national assembly approved the development plan up to 2013/14, the first plan since 1986 in order to revive the Kuwaiti economy facing recessionary pressures since September 2008. The plan includes a total of 1,100 projects among them many Mega Projects, were approved with estimated at USD 125 billion of spending focusing on both oil and non oil economic sectors.

Kuwait has announced spending in the 2010/2011 fiscal year about USD 55.6 billion, and it was basing its 2010/2011 budget on an oil price of USD 43 a barrel.

All these projects will follow the build-operate-transfer (BOT) model, thus allowing the private sector to become more involved in the ongoing development of Kuwait.

The Mega Projects Agency (MPA), the executive arm of the Kuwaiti Ministry of Public Works leads the charge to design and implement most of the country's infrastructure projects. Among the largest projects are:

39

Digby Lidstone, « Relieving pressure on the system », Gulfwastewater, MEED, 2009.

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-

the Kuwait University City (KU City), a educational complex in Shadadiyah, 20 km west of Kuwait City, over a 4.9 million m2 area. Upon its completion in 2015, the city will have the capacity to accommodate up to 40,000 students.

-

Silk City - known as Madinat Al Hareer - approved in July 2008 by the Kuwaiti Government, is the biggest real estate project which will be located in Subiya, northern Kuwait. The city will span 250 km2 and will include 30 communities grouped into four main districts : Finance City, Leisure City, Ecological City, and Educational and Culture City. It will include as well an Olympic Stadium, residences, hotels and retail facilities. Project is under design. Construction in first phase is expected to be in 2012.

Estimated duration of the project 2012-2023.

-

New city developments are included in the plan to meet the demands of its fast growing population. Kuwait has plans to create satellite cities and towns in the outlying regions mainly in Subiya, Khairan (potentially for 500,000 people), Jaber Al Ahmed City (100,000), Arifjan (up to 100,000) and other smaller city developments. According to the Public Authority for Housing Welfare (PAHW) almost 50,000 residential units will be distributed at the end of the five-year development plan.

This new scheme of urban development is likely to offer a range of opportunities in O&M for utility systems.

3.6

Bahrain

Water and wastewater are part of the vision 2030 Strategic Plan put forward by the Economic Development Board (EDB) of the Kingdom of Bahrain. One of the pillars of the Vision 2030 for the Kingdom is to have the right infrastructure.

To achieve these strategic goals, the Bahraini government led by His Royal Highness the Prime Minister Prince Khalifa Bin Salman Al Khalifa has decided to develop and reinforce the electricity and water transmission networks to meet the growing demand for electricity and water in the Kingdom from various industrial, commercial and residential sectors.

The Electricity and Water Authority (EWA) is responsible for water production, transmission, distribution network, metering and consumer management.

The second principal body is the Ministry of Works (MoW) which is responsible of all public works taking place in Bahrain inc luding wastewater treatment plants. Inside the MoW, a special sanitary division exists which is in charge specifically of the Tubli wastewater treatment plant (see after), and which implements also the nationwide waste treatment and water ReUse policies.

Desalination: EWA objectives were that in 2010, 100% of the water produced in Bahrain comes from desalination in order to save underground aquifers from overexploitation.

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Till 2011, EWA was supposed to achieve this strategic objective through: the Hodd Power and Water Plant, which has a capacity of 409 000 M3/d.

The plant is operated under a BOO basis (Build-Own-Operate) through a consortium including GDF-Suez International (30%), International Power (40%, which is now part of GDF-Suez) and Sumitomo Corporation.

Ras Abu Jarjur, which currently produces 73 000 M3/d.

The Sitra Prower and water plant which is one of the oldest of the country with production capacity from distillation of 114 000 M3/d.

The Aluminium Bahrain (Alba) plant which has an average production of 24 700 M3/d.

EWA will need in the near future to expand the capacity of those existing stations.

So opportunities for expanding desalination capacity are expected to be large in the near future, as it is shown on the following graph:

But EWA will also decide to build new desalination units if it wants to cope with the population growth of Bahrain. The very last project implemented by EWA is the Al Dur power and desalination plant, which is being developed on a build, own, operate basis by a consortium composed of GDF-Suez and Gulf Investment. The project has seen lucrative contracts already awarded to large international players and 47

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is consisting of a combined cycle gas turbine power plant and a reverse osmosis desalination plant, together with all support facilities such as seawater intake and discharge structures and gas connection.

Water transmission and strategic storage: The "Water Transmission Development Project 2009-2012" is the largest water transmission project to be undertaken in the Kingdom of Bahrain in terms of size, geographic reach and cost. The project involves the installation of water transmission pipelines to connect the new Al Dur Power and Water Company Station (ADPWC) with the water transmission network in the kingdom to transfer and distribute the potable water produced form the ADPWC Plant. The project includes in particular installation of about 135 Kms (45%) additional water transmission pipelines ranging in diameters from 1400mm to 600mm.

The completion of this project will ensure equitable water distribution in terms of quantity and quality from all the water production facilities in Bahrain and will ensure a very high level of flexibility and security of supply by achieving Network inter-connectivity and three days of water storage as many reservoirs are planned in the scope of work, which is anticipated to be completed by late 2013 and early 2014.

Wastewater and water Reuse: About 90% of the population are now connected to the sewerage network. The government aims now to increase network coverage to 99% by the year 2015.

The task is a real challenge as the population of Bahrain is growing at a rate of 2% per year and major developments are under way on Muharraq Island where population growth is forecast at 7% per year.

A German consortium made up of P2M Berlin, GTZ and Dornier Consulting was asked in 2008 to draw up a wastewater masterplan for the Kingdom. The German study was considering using treated sewage effluent to replenish the water table, and making more water available for irrigation, which was so far using only desalinated water for crop production.

Besides expanding wastewater network and using more TSE for agriculture and domestic use, Bahrain’s government aims also to strengthen treatment capacity to 500 000 M3/d. This strategy requires extension of current capacities. 120,000 M3/d expansion were first concerning the WWT of Tubli, which is Bahrain’s largest wastewater treatment plant and had to process so far above its design capacity of 200 000 M3/d.

To achieve Bahrain’s wastewater treatment stations expansion needs, the Ministry of Finance seems to encourage initial public offerings (IPOs) in future wastewater project as well at it did for in the past for water and power projects.

The main motivation for the government to introduce the new strategy is to share the benefits of Bahrain’s privately financed wastewater projects with local investors, by offering shares in the 100% privately owned project company. According to local experts, Bahraini institutional investors should be quick to snap up such an offering, who emphasised the low risk and stable cashflows offered by such kind of project.

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4.

Opportunities for Swiss companies in the GCC:

The six GCC states have performed strongly since 2005, with the only dip being in 2009 due to the fall in oil prices and the global recession. Despite world economic crisis, economic prospects of the GCC countries seem to guarantee an annual 5% GDP growth rate, as shown on the following graph extracted from The Middle East Projects Forecast & Review 2011 : GCC real GDP growth rates, 2005-16 (% change)

Government revenues and expenditures are expected to continue to grow, and especially in the Kingdom of Saudi Arabia, which, by 2016, according to the IMF forecasts, will enjoy a GDP close to USD 800 billion.

Those revenues will be directed towards capital project programmes, much of them focused on utilities.

For example, Riyadh’s project expenditure is expected to almost triple by 2016 com- pared with USD 100 billon in 2005. Kuwait, the UAE and Qatar are also set to double their expenditure rates over the same period.

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In order to give Swiss companies the most attractive scenarios for growth and opportunities in the water market specifically, we have decided to share our analysis in three distinctive parts: 4.1

the municipal market, the industrial market, the smart irrigation and cooling market.

The municipal market

Water demand management: Water efficiency and network management represent the first growth opportunity in the GCC countries.

By population, only 8% of network management is outsourced to the private sector in the MENA region. While concession contracts were signed in the 90’s and at the beginning of 2000 in the main cities of Morocco (for instance : Casablanca with Suez Environnement; Rabat, Tetouan, and Tangiers with Veolia Environnement), the trend during the past six years appears to favour lighter types of business models, such as management contracts for water and waste water, under quite a short period of time (5 years in Algiers for Suez Environnement and 7 years for the largest cities of the KSA, such as Riyadh with Veolia Environnement, Jeddah with Suez Environnement, and Mekkah/Taif with the Saur Group).

New management contracts are expected to be signed in KSA, which is the most attractive market in this municipal segment. Per formance based contracts should be signed before 2020 in other main Saudi cities such as Dammam, Madina for the first two; and then Buraida/Onaizah, Khamis/Abha and Tabuk for the last group.

Under such circumstances, business opportunities will expand to water distribution technical fields such as : pipes and coating, valves, command and control, water supply systems integrators, leakage detection, custumer services, IT systems.

In these last two, in December 2010 the National Water Company of Saudi Arabia, aiming to modernize the infrastructure and introduce international standards of customer services, awarded Accenture a contract to design and deploy a comprehensive IT solution for its water and waste water services in the cities of Riyadh and Jeddah. Under the agreement, Accenture will develop and implement a range of Oracle-based solutions that cover customer care and billing, a customer portal, enterprise asset management and middleware. Accen-

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| GCC Water for Life

ture will provide maintenance and support of the new infrastructure for one year and will also be responsible for a change management program to help the company’s leadership and staff introduce new business processes.

Opportunities also lie in the reviewing process of those performance-based contracts implemented in KSA. For instance, in September 2009, the Saudi National Water Company appointed PUB Consultants Pte Ltd (PUBC), a wholly owned subsidiary of Public Utilities Bureau, Singapore's national water agency, as the independent auditor for the performance-based management contract for Riyadh City Water and Wastewater Services. As part of its role, PUBC will conduct regular audits, determine performance payment incentives and withholdings and act as a facilitator between the National Water Company and the management contractor in case of disputes.

Water production and desalination: According to Samba Financial Group, the utilities sector, including electricity and water supply, is currently the fifth largest recipient of foreign investment in Saudi Arabia, and is expected to rise further in investor attractiveness over the next five years. Desalination has already been earmarked as one of the sectors targeted for privatization for 2009 40. The Saline Water Conversion Corporation (SWCC), for example, is still currently undergoing a large-scale restructuring and privatization plan. Moreover, SWCC has signed contracts with legal, strategic, financial, and technical advisers to build or expand 11 desalination plants with an additional 362,000 M³ of water per day to the existing capacity of 3,6 Million M³. So BOT as well as O&M projects in desalination are continue to grow in the GCC and in the UAE and the KSA mainly.

Like the SWCC, other utilities in the GCC seem to offer huge contract opportunities such as the following, both active in electricity and water:

M&RA Ministry is the Municipal & Rural Affairs Ministry of Saudi Arabia.

PTB Kuwait is the Partnership Technical Bureau.

In terms of contractors, the main players for BOT in thermal desalination are : GDF/Suez, Sembcorp Gulf O&M Company, Marubeni, and NOMAC (a JV between Sogex Oman Co. LLC and ACWA Power International of Saudi Arabia created to deliver operation and maintenance services solutions to public and private sector owners of power and desalination plants).

In BOT Reverse Osmosis or hydrid (using RO and thermal technologies), the key players in the GCC are : GE Water, Sembcorp Gulf O&M Company, Hyflux, Befesa Agua, GDF-Suez, Veolia, and Aqualia.

Singapore companies are among the top international players pioneering water projects within the GCC markets, and more precisely in desalination. Hyflux and Sembcorp are the best known. For instance, during the last Singapore International Water Week, Sembcorp 40

« The 2009 Water Sector in the Kingdom of Saudi Arabia », the U.S.-Saudi Arabian Business Council (USSABC).

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announced a Memorandum of Understanding (MOU) with the Abu Dhabi Water and Electricity Authority (ADWEA) in the UAE to develop and build a new seawater reverse osmosis facility with potable water production capacity of around 30 million gallons per day (MIGD).

The company already has water and power interests in Fujairah and Salalah in Oman.

Other opportunities for Swiss companies are in membrane technologies.

Business prospects in this field have already led Dow Chemical Company to invest recently in a best-in-class manufacturing facility for DOW FILMTEC™ reverse osmosis (RO) elements in the Kingdom of Saudi Arabia. High-performance DOW FILMTEC membranes from Dow Water & Process Solutions are used for instance in the Shoaiba Barge Seawater Reverse Osmosis (SWRO) plant, which is one of Saudi Arabia’s largest RO seawater desalination plants.

Wastewater, stormwater and Reuse: The biggest requirement for new capacity is in Saudi Arabia, which will need 2,2 million M³/d of treatment capacity by 2015. The UAE will need 1,3 million M³/d and Kuwait will require 795 000 M³/d.

Saudi Arabia is by far the best opportunity in the GCC countries and has already launched 4.8 billion USD in projects to expand wastewater treatment capacity, sewerage networks and strategic reservoirs 41. In Abu Dhabi as well, opportunities are many. ADSSC's investment program of some USD 6.5 billion over the next five years, is aimed at preparing Abu Dhabi to meet the Emirate's 2030 vision with a state-of-the-art wastewater infrastructure. Also, to achieve Bahrain’s wastewater treatment stations expansion needs, the Ministry of Finance seems to encourage initial public offerings (IPOs) in future wastewater project as well at it did for in the past for water and power projects.

This provides very interesting opportunities for Swiss companies in engineering, design and supervision of works, as well as in operation & maintenance, for: -

sewer systems, waste water treatment plant, sludge treatment and recovery, pumping stations, stormwater storage.

For instance, the engineering firm Mott MacDonald received a mandate by ADSSC for the design review, overall coordination and construction overview of wastewater works to be undertaken as part of private development activities in the Emirate of Abu Dhabi, with the exception of Al Ain. The work will take place over a 48-month period. Dorsch Consult, meanwhile, has received a mandate for the design review, overall coordination and construction overview of wastewater system works to be undertaken as part of the development of Saadiyat Island42.

In March 2010, AECOM, a Fortune 500 company, has also won two projects that will help provide wastewater facilities from the Abu Dhabi Sewerage Services Company (ADSSC). For the two projects, the company will provide the design and construction supervision of sewerage connections and related works for isolated properties in Abu Dhabi.

As a consequence DBO, BOO and BOT projects in wastewater treatment are also expected to boom. However in a country like Saudi Arabia, EPC (Engineering, Procurement and Construction) contract should be favoured, which would be in line with the policy that the Kingdom has recently adopted on other utility schemes.

In water reuse, the greatest potential is in KSA, where only around 18 % of treated sewage effluent is reused. The National Water Company seems to have already signed MOU’s with Veolia, Acwa Power, and Suez for TSR ReUse and is ready to take an equity stake in the projects company.

41 42

Ibid.

Global Water Intelligence, September 2007, Vol 8, Issue 9.

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According to the National Water Company, several institutions and industrial groups have expressed interest in signing a treated water supply agreement. Among them are Saudi Aramco (20,000 M³/day), Madden (10,000 M³/day), Bareq Al-Madden (5,000 M³/day) and The Knowledge Economic City (65,000 M³/day) 43.

Business practices in this field are: -

TSE off-take from the respective treatment plant.

Build and operate required infrastructure for transportation.

Develop marketing strategy and mechanism for TSE reuse and for sludge reuse.

GE, which has organized a water ReUse summit in April in Riyadh, held this ‘Used to Useful’ Water Reuse seminar to explore water reuse solutions that can support the Kingdom and the Gulf region in securing a sustainable water supply for the future.

As in the case for desalination, Singapore companies can be expected to be active in targeting the ReUse market potential of GCC countries. For instance, Salcon, a subsidiary of Boustead, a Singapore leading global specialist in water and wastewater engineering, has been awarded a Dhs 55 million contract by the Abu Dhabi Sewerage Services Company to design, engineer and construct a new water recycling plant for the enhanced treatment of treated sewage effluent in Abu Dhabi.

Strategic underground water reserves: The political instability in the Gulf region, and the political willingness of GCC countries to increase their resilience in the face of disruption (regional conflict, civil unrest, wide scale pollution in the Persian Gulf, natural disaster,…) have recently convinced heads of States and governments to implement strategic water reserves.

Following Abu Dhabi, Dubai is the latest of the GCC countries to realize that diminishing natural groundwater is a serious threat to fresh water security where desalination plants are the major source of water supply. So, since April 2011, Dubai has been exploring ways to make use of safely treated and good quality sewage water for recharging ground water, which, in the long run, will help create an emergency reservoir of underground water.

A feasibility study to reuse treated sewage water for this purpose has been part of a latest joint venture undertaken by the Dubai Municipality with the global engineering and construction company Hitachi Plant Technologies Ltd (HPT), part of Japan’s Hitachi Group.

In March 2011, Qatar also announced that it would build a USD 2.75 billion mega-reservoir capable of holding seven days’ worth of fresh water to avert a potential crisis should its giant desalination plants that supply 99% of the desert state's water fail.

In this specific research field (artificial recharge of underground water) and in the design, build and operation of strategic water reservoirs, opportunities for Swiss engineering and construction companies seem thus to be great.

4.2

The industrial market

Some case studies performed by the Saudi Aramco have shown that efficient management of water in oil and gas production, as well as the reuse of water used in the production of oil and gas could possibly save 31% of the KSA’s total demand of industrial water44.

Reuse of water for industrial purpose is considered as a niche market in the GCC countries. But the strategic question relies on the willingness of GCC oil & gas, aluminium or steel companies to outsource water and waste water services management. So far, O&M for processed water is still very tightly integrated with exploration and production processes and thus is kept in-house.

43

Loay Al-Musallam Deputy Minister for Planning & Development Ministry of Water & Electricity (MOWE) Kingdom of Saudi Arabia, « Wastewater Treatment Plant Privatization initiatives in Saudi Arabia », Presentation to SAWEA 2007 Workshop, Dhahran.

44 Cited by Asma El Kasmi, director of the Arab Academy of Water, « Water and Energy seminar », (Re)Sources, Water & Energy Network for Development, Abu Dhabi, March 2011.

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Only wastewater treatment outsourcing opportunities will be considered on a case by case basis. Although more outsourceable than processing water, it is however obvious that GCC main industrial groups will also maintain a tight grip on wastewater as their operations are too complicated to be outsourced.

Outsourcing in industrial zones is another story and represents more opportunities for Swiss companies. As previously said in this report, in May 2011, Marafiq formed a joint venture with the French water company Saur to operate and maintain water and wastewater assets in the industrial city of Jubail. Located the east coast of the Kingdom, with some 150,000 inhabitants, Jubail is one of the two cities – along with Yanbu on the Red Sea coast – where power and water are covered by Marafiq.

The new JV will operate assets which will include three desalination plants with a total capacity of 37,800 M³/d, water tanks and pumping stations, 885 kms of water supply network and 586 kms 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 45.

For Swiss companies, a good opportunity could lie in the Saudi Industrial Property Authority (MODON), which oversees and provides water utilities to over 20 industrial cities with some projects under development such as Sudair (the largest industrial zone to be developed by MODON with a total area of >200 Km2) and Al-Kharj (approximately 100 Km2). MODON has already decided to outsource most of its water utilities through BOT contracts.

Strategic partnerships with local contractors, which have already benefited from this outsourcing trend in KSA, such as Tawzea, Mowah, and ICDOD (Industrial Cities Development and Operation Company), could also prove to be good opportunities for Swiss companies.

This is precisely the way the SAUR group signed a strategic JV with Marafiq. Originally, the Saudi-based Zamil Operations and Maintenance Company (Zomco), SAUR’s partner in the Kingdom, had operated and maintained water and wastewater facilities in Jubail since 2003, and was involved as a potential partner in early-stage negotiations with Marafiq.

In Abu Dhabi, the multi-billion dollar Tacaamol mega-project being developed at the Taweelah Chemicals Industrial City is also due to be fully operational in 2015. The plant is part of a drive by the United Arab Emirates, the world’s third-largest oil exporter, to diversify the economy and move away from dependence on crude export revenues.

Tacaamol will be the first of the plants the Abu Dhabi National Chemicals Company (Chemaweyaat) is planning to develop in the Chemicals Industrial City of Taweelah.

This huge chemical complex could thus offer Swiss companies O&M outsourcing opportunities in wastewater assets management.

4.3

The smart irrigation and cooling market

The 2007 World Development Report called for greater investment in agriculture in developing countries and warned that the sector must be placed at the center of the development agenda if the goals of halving extreme poverty and hunger by 2015 are to be achieved.

Agriculture consumes 85% of the world’s utilized water and the sector contributes to deforestation, land degradation and pollution. The GCC countries are no exception.

More precisely Qatar like the rest of GCC countries, because of a period of rapid growth and its population forecasts (8% per annum), needs now to meet new food security requirements.

45

« Saur forms O&M JV in Saudi Arabia », Global Water Intelligence, May 2011, Vol 12, Issue 5.

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75% of irrigation in Qatar is currently based on old techniques and new technologies are urgently needed. They include irrigation with saline water, optimizing the use of TSE for forage production, the economics of protected agriculture when using desalinated water, optimum use of water resources in agriculture and modernizing irrigation in Qatari farming.

In this specific field, Swiss providers of low-pressure drip irrigation solutions would be warmly welcomed. These must include drippers and dripper-liners for varying topographies, high precision sprinklers and micro-sprinklers, electric and hydraulic valves, smart valvecontrol systems, computerized irrigation offering easy-to-operate controllers‌ Sustainable water options for sports fields and golf courses are also deeply needed in the GCC countries. Sport has indeed become a diplomatic tool and a way to take care of the young population in the GCC countries. So O&M opportunities exist in the management of sport infrastructures for smart water and cooling. Qatar is more precisely facing significant capacity building programmes, as it seeks to build up capacity ahead of the 2022 Fifa World Cup. More globally, district cooling in the GCC is one of the most attractive opportunities, especially if smart cooling technologies are implemented, using for instance water ReUse and smart metering. District cooling capacity is indeed expected to grow at ~20% per year over 2008-2015 in the GCC, with potentially attractive returns.

Engineering and design, as well as operation & maintenance contracts for cooling systems using treated water and reuse of waste water are so deeply needed in real estate and sport infrastructures’ development in the GCC.

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4.4

Competitive insights

New infrastructures’ projects and prospects in the GCC water sector have motivated Western and Asian companies to open offices and to support project management and business development teams in some of the most important markets in terms of growth potential such as the Kingdom of Saudi Arabia.

The current competitive picture shows the following players and their approximated revenues in 2011 for the desalination market:

Player

Project

Estimated revenues ($M)

Azaliya (Joint-venture UAE/ France)

Fujeirah 2 IWPP (UAE)

9

Energy Central (Bahrain)

Durrat Al Bahrain

2

GDF Suez (France)

Ras Laffan C IWPP (Qatar)

15 14

GDF Suez (France)

Addur 1 IWPP (Bahrain)

GDF Suez (International Power) (France)

Fujeirah 2 IWPP (UAE)

GE Water (USA)

Jafza (Dubai)

Sembcorp Gulf O&M (UAE/Singapour)

Fujairah F1 extension (UAE)

Septech (UAE)

Saadiyat Island (Abu Dhabi)

17

5 11 1

Source: GWI, MEED, Zawya.

In terms of DBO (Design Build Operate) for desalination projects, GDF-Suez seems to be the largest player in the GCC since the takeover of the UK Company International Power in 2010. Azaliya is also one of the key players of the desalination market in the GCC in 2011. This JV was formed between Veolia Environnement, the world largest water and waste management company, and the Abu Dhabi group Mubadala.

Companies from Singapore are also more and more successful in local tenders such as Sembcorp, which settled Sembcorp Gulf O&M, a special project company dedicated to the GCC market.

GE Water is also expected to become one of the key player in building and operating plants in the GCC countries. However, as previously said, GE is targeting more and more the waste water and the Reuse markets which are really growing fast.

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The current players of the WWTP market in 2011 were the following companies:

Player

Project

Estimated revenues ($M)

Azaliya (joint-venture UAE/ France)

Al Wathba WWTP (ISTP2) (Abu Dhabi)

4

Biwater (UK)

Al Saad WWTP (Abu Dhabi)

1

Biwater (UK)

Al Wathba (Abu Dhabi)

3

Keppel Seghers (Singapore)

Doha North (Qatar)

12

Source: GWI, MEED, Zawya.

Again Azaliya is currently one of the most important player of the DBO market of waste water treatment plants, although the Singaporean Keppel Seghers firm was expected to get the highest revenues in 2011.

4.5

Projects under development

Swiss companies will be able to compete in the next coming months on the following desalination projects: BAHRAIN

KUWAIT

OMAN

QATAR

AD DUR 3

APPROX 227 000M3/D AND 1200MW

EXPECTED 2015/2016

Bahrain Petroenergy Complex (BPECO)

136 500m3/d MSF/MED, 1000MW

Project progress expected soon

Az-Zour North Stages 2-5

Four stages of upgrades

Conceptual stage

Doha (Kuwait) SWRO

2 SWRO with 227 300m3/d each

RFQ expected soon

Doha East

454 600 m3/d and 2300MW

Tender to be re-issued in 2012

Khirran South

Initial 113 650m3/d and 500MW

Conceptual stage

Shuaibah South

231 846m3/d and 1400MW

Tender expected soon

Duqm

1000MW & 20 000-50 000m3/d

Conceptual stage

Qurayat IWP

181 840m3/d SWRO

RFQ expected in Q3 2013

Suwaiq IWP

227 300m3/d SWRO

RFQ expected in Q1 2014

The Wave Muscat

6000-7000m3/d across two plants

Tender process expected soon

Tibat, Musandam governerate

6000m3/d RO

RFP issued

Abu Samra

2000m3/d skid mounted SWRO

Tender process ongoing

New RO Plant

Likely SWRO

Awaiting bids

Ras Abu Fontas A2

409 140m3/d

Awaiting contract award

Solar Powered desalination plants

100 000-200 000m3/d

Feasibility study underway

Source: Global Water Intelligence Volume 13 / Issue 1 / January 2012

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For the Kingdom of Saudi Arabia, which is by far the largest in terms of business opportunities, desalination project under way are the following: Saudi Arabia

Al Khafjl Al Khobar 2 expansion Al Waji 4 Duba Phase 4 Gasan industrial RO Plant Haql Phase 3 Jizan Economic City Jubail RO Upgrade Khobar 4 IWPP King Abdullah Economic City

5680m3/d Likely SWRO 11 000m3/d- 13500m3/d MED 9000 m3/d MED 83000m3/d RO 9000m3/d MED 12 000m3/d P1 & 3000m3/d Additional on second pass to 78 182m3/d 250 000m3/d and 250 MW 70 000m3/d SWRO

Rabigh IWSPP stage 2 Rabigh Phase 3 Ras Tanura Shoaiba 4 IWPP Shuqaiq 3 IWPP Wasia BWRO Yanbu Yanbu 3

96 000m3/d New 9000 m3/d MED Approx 150 000m3/d, 1000MW 650 000m3/d & 665MW 175 000m3/d & 175MW 300 000m3/d BWRO 6000m3/d 550 000m3/d & 1700MW

Pre RFP Tender process ongoing Re-tender delayed Design stage Early conceptual stage Design stage Bids under review Pre-RFP Conceptual stage Decision on project’s future due soon Awaiting bids Design stage Awaiting RFP Conceptual stage Conceptual stage Project re-tendered Bids under evaluation Bids under evaluation

Source: Global Water Intelligence Volume 13 / Issue 1 / January 2012 In terms of water ReUse projects and waste water treatment plants, which are fast growing market niches in the GCC, current projects are the following: Oman Qatar

Saudi Arabia

UAE

Al Amerat WWTP Al Ansab WWTP expansion Al Thakira WWTP Doha North and Doha West WWTP Doha South WWTP Jeddah Airport WWTP Phase 2 Jeddah WWTPs

Initial 18 000m3/d New 25 000m3/d WWTP New 60 000m3/d plant Expansion of both plants 80 000 m3/d - 400 000m3/d facility New 500 000m3/d STP New 500 000m3/d STP

New 100 000m3/d WWTP O&M New plant 19 320m3/d New 256 000m3/d plant O&M of 360 000m3/d

Awaiting bids Pre-RFP On hold Conceptual stage Conceptual stage EOI Issued RFQ expected after Riyadh tender process is finished To be retendered EOI Issued Expected to follow Riyadh and Jeddah WWTP. Tender process ongoing On hold Tender expected soon Pre-RFP

King Abdullah Economic City WWTP Manfouha STP expansion Mecca, Medina and Greater Dammam Riyadh WWTP Global Foundries WWTP Madinah Al Arab WWTP Mafraq and Zakher wastewater operation Masdar WWTP, Abu Dhabi Palm Jebel Ali WWTP Saadiyat Island WWTP

Construction of 30 000m3/d plant Construct 200 000m3/d capacity WWTPs total of 1 228 000m3/d

Membrane bio-reactor WWTP DBO Contracts 220 000m3/d Construction of 78 000 m3/d plant

In planning Conceptual stage Conceptual stage

Source: Global Water Intelligence Volume 13 / Issue 1 / January 2012

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5.

How to start Business in the Gulf Countries

During the past 20 years, international water companies have promoted different types of business models, depending on the level of risks they accept and their degree of involvement. Those kind of contractual schemes between a municipal client and a private company are also implemented in the GCC. They can be summarized on the following chart:

Municipality Bene its to Customer & Client

Fully Privately Owned

CONCESSION BOT AFFERMAGE Lease Contract Design, Build Operate

Operations & Maintenance

Joint Venture Public/Private

Technical Assistance

Private Company

3

5

10

20

Time in Years

30

For EVER

In fact four different types of contractual families are normally used in the water business: -

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Management support : technical assistance and Operations & Maintenance (O&M).

Infrastructure contract : Design Buid Operate (DBO), Buid Operate Tranfer (BOT).

Delegated management : Concession and affermage.

Privatisation or asset tranfer : Private ownership and shared owenership.

| GCC “Water for Life�

Thus four alternatives exist for a Swiss company which would like to be involved in the municipal water sector in the GCC. The last two are however expected not to be very frequently implemented in the GCC in the years ahead.

Privatisation or Asset Transfer

Degree of Private Involvement

Delegated Management Infrastructure Contract DBO Management Support

Private Ownership Shared Ownership

Concession Affermage

BOT

Operations & Maintenance

Technical Assistance

3

5

10

Years

25

For EVER

For management support, O&M contracts are the most frequently used in the GCC. The characteristics of O&M are: - Contract of means - Limited management responsibility - No investment and therefore little tied-up capital - Payment in fees directly by the public authority - Limited risks transferred from the public authority to the operator - Short duration possible (5 years or more) - Limited opportunity for transfer of know-how & technology.

As an example, here is the contractual scheme signed for Djeddah City Business Unit of the National Water Company of Saoudi Arabia for duration of seven years.

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As regards infrastructures’ projects, DBO projects are favoured in the GCC. Their characteristics are: - Contract of results - Performance specification.

- Single client: the public authority - Building new infrastructure (or major refurbishment).

- Design, finance & construction paid by the client.

- Construction and operation risks transferred to the private operator.

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6.

6.1

Annexes Exhibitions, fairs and conferences 2011-2012

Saudi Arabia Saudi Water and Power Forum (SWPF) Jeddah, Saudi Arabia 4–6 December 2011 Website: www.ksawpf.com/forum-2011/index.aspx WEPower 2011 supported by the Saudi Ministry of Water and Electricity and sponsored by Saudi Aramco Dammam, Saudi Arabia 14–16 May, 2011, Next: 13-15 May, 2012 Website: www.wepower-sa.com ARWADEX 2011 – Water Desalination Conference in the Arab Countries Riyadh, Saudi Arabia 17–20 April, 2011, Next: 8-11 April, 2012, Website: www.arwadex.net

United Arab Emirates Wetex - Water and Energy Technology & Environment Exhibition Dubai Next :13-15 March 2012 Website: www.wetex.ae Workshop on Water Treatment Plant Design Dubai 6-8 December 2011 Website: www.watertreatment-academy.org The Gulf Waste Water Summit 2011 Dubai 26–28 April, 2011 Website: www.fleminggulf.com

Arabian Water Power Forum Dubai, 24-26 September 2012 Website: www.cwcawpf.com

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Smart Energy Middle East 2011 Conference and Exhibition Dubai, UAE 23–25 October, 2011, Next: 2-4 December 2012, Website: www.smartgridsme.com/en/water-meter-me.php Power + Water Middle East 2011 (in partnership with Abu Dhabi Water & Electricity Authority (ADWEA)) Abu Dhabi, UAE 16–18 October, 2011, Next: 8 - 10 October, 2012 Website : www.powerandwaterme.com/ Desalination O&M 2011 Abu Dhabi, UAE, 24–25 January, 2011, Website: www.americanconference.com International Water Summit Abu Dhabi, UAE, 15-17 January, 2013 Website: www.internationalwatersummit.com

Qatar GCC Power and Water Desalination Summit 2011 Doha Qatar 4 October 2011 Website: www.fleminggulf.com 3rd Annual Middle East DC (District Cooling) Summit Doha Qatar 28 – 30 November 2011 Website: fgutilitiesmena.com/district-cooling-summit/ Water World Middle East Conference & Exhibition: Changing Water Solutions in Challenging Times Doha, Qatar 24–26 October, 2011 Next: 6-8 February 2012 Website: www.waterworldmiddleeast.com Qatar Alternative Energy Investors Summit Doha, Qatar 16–17 March, 2011, Next: 28-29 March, 2012 Website: www.qaeis.com 10th Gulf Water Conference Doha, Qatar 22-25 April 2012 Website: www.gwcdoha2012.org 75

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Oman Regional Water Safety Plan Conference : Middle East and North Africa Region Quality Assurance and Sustainable Drinking Water Services Organized by International Water Association Muscat, Oman 10-12 October 2011 9–11 May, 2011, Website: www.wsportal.org/mena

Kuwait KEWE 2011 – Kuwait Environment, Water and Energy Exhibition and Conference Mishref, Kuwait 10–12 April, 2011, Website: www.kewe-expo.com/2011/en/

6.2

Useful addresses

Contact information Saudi Arabia Saudi Arabia Water Environment Association (SAWEA): This association consists of water quality professionals dedicated to the preservation and enhancement of both the Saudi Arabian water environment and the global water environment. A lot of people working for Aramco are members of this association chaired by Mohammad Al-Abdulatif, currently serving as a Technical Advisor for the Saudi Aramco Utilities Department.

The SAWEA and the Water Environment Federation (WEF), which SAWEA is a member, are co-organizing every two years Water Arabia.

The next edition will be Water Arabia 2013 a three days conference and exhibition dedicated to water quality.

Contact: Mohammad.Abdulatif@aramco.com Website: www.sawea.org National Water Company: Loay Bin Ahmed Al Musallam is the company’s CEO. PO Box 676 Riyadh 11421 Contact: loay@nwc.com.sa Website: www.nwc.com.sa

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Ministry of Water and Electricity (MOWE): HE Abdulah bin Abd - ur - Rahman Al- Hossein is the Minister of water and electricity King Fahed Road Mohammadiah Area Riyadh 11233 Saudi Arabia Tel: +966 1-203-8888/Fax: +966 1-205-0557 Contact: info@mowe.gov.sa Website: www.mowe.gov.sa

Saline Water Conversion Corporation (SWCC): His Excellency Mr. Fehied F. Al Shareef is the Governor of the Saline Water Conversion Corporation (SWCC).

Saline Water Conversion Building Prince Mohammed Bin Abdulaziz Road P.O. Box 5968 Riyadh 11432 Saudi Arabia Tel.: +966 1-463-1111/Fax : +966 1-464-1111 Contact: info@swcc.gov.sa Website: www.swcc.gov.sa Aramco: Nabeel A. Al-Jama is Executive Director Community Services of Saudi Aramco.

Saeed Tower Dammam Khobar Highway P.O. Box 151 Al Khobar 31952 Al Sharqiyah Saudi Arabia Tel.:+966 3-872-0115/Fax : +966 3-814-7063 Contact: webmaster@aramco.com.sa Website: www.saudiaramco.com

Contact information Abu Dhabi and Duba誰 Regulation & Supervision Bureau : Nick Carter is General Director of the Regulation & Supervision Bureau P.O.Box 32800 Abu Dhabi, United Arab Emirates Contact: rsb@rsb.gov.ae Website: www.rsb.gov.ae

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Abu Dhabi Water & Electricity Authority (ADWEA) : His Highness Sheikh Diab Bin Zayed Al Nahyan is Chairman of ADWEA. P.O.Box: 6120 Abu Dhabi, U.A.E. Tel: +971 2 694 3333/Fax: +971 2 694 3192 Website: www.adwea.ae Abu Dhabi Sewerage Services Company (ADSSC) : H.E. Abdullah Ali Musleh Al Ahbabi is Chairman of the Board of ADSSC. Al Falah Street - Behind Harely Davidosn Research Centre Building P.O.Box 108801, Abu Dhabi, UAE. Tel.: +971 2 416 8000 /Fax. +971 2 6943 773 Contact: care@adssc.ae Website: www.adssc.ae Dubai Electricity and Water Authority (DEWA) : HE Saeed Mohammed Al Tayer is MD & CEO of DEWA P.O. Box 564, Dubai, U.A.E Tel.: +971 4 601 9999/Fax. + 971 4 324 8111 Website: www.dewa.gov.ae

Contact information Qatar Public Works Authority (ASHGAL) : Nasser Ali Al Mawlawi is the President of ASHGAL. P.O. BOX 22188, Doha-Qatar Tel: +974 44950000 / Fax: +974 44950999 Website: www.ashghal.gov.qa KAHRAMAA, the Qatar General Electricity & Water Corporation: Eng Essa bin Hilal Al Kuwari is the President of KAHRAMAA. City Center Doha, Car Park Level - Doha, Ad Dawhah, Qatar Tel.: +974 4462-8333 Website: www.kahramaa.com.qa Urban Planning & Development Authority : Ali Abdullah al-Abdullah is the General Director of UPDA. PO Box: 22423, Doha, Qatar Tel.: +974 4955 555 / Fax: +974 4955 594

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Qatar Electricity & Water Company (QEWC) : Mr. Fahad H. Al-Mohannadi is the General Manager of QEWC. P.O. BOX: 22046, Doha - Qatar Tel: +974 4858 585 / Fax: +974 4831 116 Website : www.qewc.com

Contact information Oman Oman Power and Water Procurement Company (OPWP): Bob Whitelaw is the Chief Executive Officer of OPWP. P.O. Box: 1388, P.C. : 112 Ruwi Second Floor, Building Name : Athiba Plaza , Al Ma`aurd Street, Ghala / Bushar.

Tel.: +968 24508400 Website: www.omanpwp.com Public Authority for Electricity and Water (PAEW) : H.E Mohammed Abdullah Al Mahrouqi is Chairman of the PAEW P.O.Box: 1889, PC: 130, Al-Azaiba, Sultanate of Oman, Tel : +968 24611100/ Fax: +968 24611133.

Website : www.paew.gov.om Haya Water (Oman Wastewater Services) : Omar Al-Wahaibi is Chairman of Oman Wastewater Services P.O. Box 1047, Al Khuwair, P.C.133, Sultanate of Oman.

Tel.: +968 24597922. Fax: +968 24646800 Website: www.haya.com.om Salalah Sanitary Drainage Services Company: Ghali bin Ahmed Almashali is Executive Chairman.

Salalah Dhufar Sultanate of Oman Tel.: + 968 23212375/Fax : + 968 2321253 Website: www.ssds.co.om

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Contact information Kuwait The Mega Projects Agency (MPA): Mr. Walid Essa al-Thaqeb is head of the MPA which is part and an executive arm of the Kuwaiti Ministry of Public Works, which designs and implements most of the country's infrastructure projects.

Ministry of Public Works Building, 3rd Floor, 6th Ring Road P.O. Box 8, Safat 13001- Kuwait Tel: +965 2538-5520/Fax: +965 538-5219, Contact: hmansour@mpa.gov.kw Website: www.mpa.gov.kw Ministry of Electricity and Water : Dr Bader Al-Shrai'an is Minister of electricity and water of Kuwait.

Building South Al Sourra Street, Ministries Area P.O. Box 12 , Kuwait Safat 13001 Tel: +965 2537-1000/Fax: +965 2537-1420 Website: www.energy.gov.kw Public Authority Housing Welfare : Al Surra Street, Ministries Area, P.O. Box 23385, Safat 13094, 13094, Kuwait Tel: +965 2530-1000/Fax: +965 2538-7464 Contact: webmaster@housing.gov.kw Website: www.housing.gov.kw

Contact information Bahrain The Electricity & Water Authority (EWA) : The Chief Executive of The Electricity & Water Authority, Dr. Abdulmajeed Ali Alawadhi.

Electricity and Water Authority Building King Faisal Street Diplomatic Area P.O. Box 2 Manama Tel.: + 973 17-546666/Fax: + 973 17-533035 Website: www.mew.gov.bh

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The Ministry of Works : HE Essam Bin Abdulla Khalaf is the Minister of Works .

Ministry of Works Building Sheikh Hamad Street Diplomatic Area P.O. Box 5 Manama Tel.: +973 17-545555/Fax: +973 17-545608 Website: www.works.gov.bh

6.3

Sources consulted for this study

Strategic studies and reports: « Water and Energy seminar », (Re)Sources, Water & Energy Network for Development, Abu Dhabi, March 2011. « Wastewater Treatment Plant Privatization initiatives in Saudi Arabia », Presentation to SAWEA 2007 Workshop, Dhahran, by Loay AlMusallam, Deputy Minister for Planning & Development Ministry of Water & Electricity (MOWE) Kingdom of Saudi Arabia. «« Business Opportunities in Water & WasteWater Industry in Saoudi Arabia/Public sector perspective », Presentation to the Singapore International Water Week 2009, Eng. Fawaz Bahlas, National Water Company. « Full audit of water and wastewater services in the city of Riyadh », Action plan and recommandations report, May 2006, Seureca.

«The 2009 Water Sector in the Kingdom of Saudi Arabia », the U.S.-Saudi Arabian Business Council (USSABC).

«Water and Electricity Sector overview 2008-2009 », Regulation & Supervision Bureau, Abu Dhabi.

«A new case for wastewater reuse in Saudi Arabia : bringing energy into the water equation », Dr. Laura Diaz Anadon, Dr. Arani Kajenthira and Dr. Afreen Sidiqqi, Dubai Initiative, Policy Brief , Belfer Centre for Science & International Affairs, Harvard University.

«The Middle East Projects Forecast & Review 2011. A comprehensive overview and forecast of the region’s projects market ». A MEED Insight report, 2011. « Saoudi Arabia : when water means opportunity », Franck Galland, March 2010, Cap Mena.

«Gulfwastewater. A regional projects guide ». A MEED report, 2009.

Aquastat, 2008 Version, Food and Agriculture Organization of the United Nations.

Books and official reports: “Water Reuse : an International Survey of current practice, issues and needs “, B. Jimenez and T. Asano (Scientific and Technical Reports). IWA Publishing, 2008.

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“Atlas of transboundary aquifers”, PURI Shaminder, AURELI Alice, ISARM Programme, UNESCO-IHP, 2009, 326 p.

“Les eaux souterraines dans le monde”, MARGAT Jean, Paris, BRGM Editions, 2008, p. 76.

“Worldwide Scheme for the assessment of water resources, L’eau pour les hommes, l’eau pour la vie”, Paris, Unesco Publishing, 2003, p.

78.

“Worldwide Programme for the assessment of water resources, Water, a shared responsability.” The United Nations World Water Development Report 2, Paris, UNESCO Publishing, 2006, p. 128.

“The tragedy of the commons ”, HARDIN Garret, Science, n°162, 1968, pp.1243-1248.

“Global public goods. International cooperation in the 21st Century”, KAUL Inge, GRUNBERG Isabelle, STERN Marc A., (dir), New York, Oxford, Oxford University Press, 1999.

“Beyond Scarcity : Power, Poverty and the Global Water Crisis”, Human Development Report 2006. New York, 2006.

“Atlas des pays du Golfe”, Philippe Cadène et Brigitte Dumortier, coédition RFI-PUPS. “L’année stratégique 2012. Analyse des enjeux internationaux “, IRIS, Armand Colin.

“L’eau : géopolitique, enjeux, strategies”, Franck Galland, CNRS Editions 2008.

“Eau et conflictualités”, Franck Galland (Dir.), Choiseul Editions, 2011.

“La ruée vers l’eau”, Sécurité Globale, Sécurité Globale, Automne 2009, Choiseul Editions, 2009.

Sectorial media report and open sources: Global Water Intelligence, May 2011, Vol 12, Issue 5.

Global Water Intelligence, September 2007, Vol 8, Issue 9.

Global Water Intelligence, June 2011, Vol 12, Issue 6.

Global Water Intelligence, July 2011, Vol 12, Issue 7.

Global Water Intelligence, January 2012, Vol 13, Issue 1.

Global Water Intelligence, April 2012, Vol 13, Issue 4.

Pinsent Masons Water yearbook.

Broker notes.

Frost & Sullivan.

Infrastructure Journal.

CIA World Fact Book 2011.

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