A growing population in the Middle East has intensified the problems of water scarcity and wastewater management in the region. Regional governments are responding by speeding up reforms and involving the private sector which should create significant business opportunities, reported the Saudi Gazette in a special wastewater report.
The region uses 80% of the available water resources for agricultural consumption of which 80% comes from non-renewable sources. Despite the heavy water usage, local food production accounts for only 10% of GCC food supplies. It is therefore clear that existing water management techniques are unsustainable and wastewater management is of prime importance to fully utilize existing water resources.
The Saudi Gazette report refers to 'Water Market Middle East 2010' published by Global Water Intelligence and draws attention to the high level of investment required to develop an efficient wastewater system in the region. The capital expenditure, as per the report, will grow from $5.3 billion in 2009 to $13.3 billion in 2016 to increase wastewater reuse.
With existing investment focused on commissioning new water production facilities, a dedicated policy framework is required to ensure investment is also directed to maintaining and improving existing facilities. The report forecasts that private operators who enter this sector are expected to enjoy annual growth rates above 20% for the foreseeable future.
Whether such growth rates will actually be achieved through private sector involvement in the wastewater sector remains to be seen but the policy setting role of government will be pivotal in attracting capital from the private sector. The news from Saudi Arabia about government owned National Water Company planning to ditch private sector involvement in new wastewater plants around Riyadh illustrates that there will be challenges along the way.
Sources: Middle East invests $8b in desalination industry