SWCC privatization 'on track', says governor
The governor of Saudi Arabia's Saline Water Conversion Corporation (SWCC), Fehied F Alshareef, issued a statement on 13 October 2009 saying that the SWCC privatization and restructuring implementation program remained on track, and that there was no intention to cancel or postpone it.He also noted that the decision 2/29 of the Supreme Economic Council issued on 3 July 2008, regarding the program is still in effect and that SWCC team members, along with the advisors, are proceeding with submission of the required deliverables and final reports.
In addition, Alshareef noted that the steering committee, formed by the Supreme Economic Council, was still meeting on a regular basis to oversee the progress of the program. The governor confirmed that SWCC, which has built most of Saudi Arabia's desalination plants, is in the final stages of preparing the constitutional documents for the setup of the new joint stock holding company as per decision 2/29, which will be submitted to the Supreme Economic Council within the next few months for approval.
This decision sanctioned the option of transforming SWCC into a state-owned joint-stock holding company with subsidiary production companies and potential private sector participation in both the holding company and its subsidiaries.
Commenting on the recent government decisions to have SWCC execute the construction of the Ras Azzour (Al Zour) and Yanbu power and desalination plants, the governor made it clear that those decisions would not affect the privatization and restructuring program. He explained that the government had decided to assume responsibility for executing the Ras Azzour project because of setup and financial issues faced by the developer consortium that had been awarded the project. Increased financing costs and the delay in executing the project agreements, had led the Government to decide to fund the project from its own budget.
Regarding the Yanbu III plant, the governor indicated that it had been planned as the first plant to be implemented under the SWCC privatization program in a BOO (build, own and operate) scheme. However, in light of the Ras Azzour experience, and the difficulties faced by Marafiq in their Yanbu project, a royal decree was issued combining the Marafiq and SWCC power and water projects into a single one with a water production capacity of 550,000 m³/d and an electricity generation capacity of 1,700 MW. SWCC will tender the project under an engineering, procurement and construction scheme.
Referring to the potential impact of the program on current SWCC employees, the Governor confirmed that there would be no layoffs. "The expertise that SWCC employees have accumulated over the years makes them integral to the success of the company and its future development," he explained.