Analysis: Disrupting the flow?
Are Jeddah’s infrastructure deficiencies hampering growth?
It is no secret that utilities provision in many Saudi Arabian cities is not as good as it should be – and Jeddah is no exception.
Indeed, the National Water Company was set up in 2008 and was devolved from the Kingdom’s Ministry of Water so it could take direct responsibility for improving water and sewerage networks in major cities including Riyadh, Jeddah, Makkah, Taif and Madinah.
Speaking at Construction Week’s Jeddah Infrastructure Conference on 24 March, NWC’s programme director Saleh M. Saadawi, argued that the company has made progress since operating Jeddah’s network from 2009.
Saadawi, a former project manager at Saudi Aramco, has had responsibility for overseeing Jeddah’s water and sewerage contracts, and has recently been appointed to head a new strategic reservoir project.
“The sewerage coverage (across the city) before the company stepped up and took over from the ministry was 22%. Now it has reached to 70%,” he said. “The coverage for water in Jeddah city is currently 85%.”
NWC has also produced a masterplan, setting out the requirements for major water and sewage projects across the Kingdom up until 2035. This has divided the city into four zones – North, North Central, South Central and South – with projects already underway in a number of them to boost the capacity of sewage treatment plants and install new large diameter pipe networks.
For instance, two new pumping stations that each have a capacity of 250,000m3 have are being built near the airport to the north and at Obhur in the south. New sewerage networks also continue to be installed in neighbourhoods across the city.
Saadawi said that NWC has attempted to handle projects in a much more coherent way, with better communications between city stakeholders such as the governor’s office, the municipality, the roads department and major users such as Saudi Aramco.
It has also sought to treat contractors differently. It inherited a $1.6bn (SR6bn) works programme that was broken up into just a handful of packages handled by major contractors. If one of these experienced delays, it could have a knock-on effect elsewhere. One part of the package that should have been finished in three years was still active after six, it found.
“We found out that it is very difficult to have one contractor to handle it. One project for SR1bn is very big.”
The company had already introduced international contracting standards under FIDIC (the International Federation of Consulting Engineers) and it decided to use these terms to re-draw packages.
“Under FIDIC, we decided to cut the scope and break projects into smaller sections of SR100mn-200mn maximum.
“If you have a problem in one zone, it will not affect the whole city,” he explained. “By doing this, things are now moving much better.”
The city still has several other issues to solve, though. One, according to Hyder Consulting’s utilities director Khaled Jame, is that it is still too reliant on paper records, which are sometimes out of date.
He said that there had been a plan by NWC in Jeddah to do a wide-ranging asset register that would eventually allow for utilities networks to be tracked via Geographic Information Systems (GIS).
“I believe GIS is invaluable in looking after a system and updating it – you know what’s happened over the years.”
He said it is difficult to take decisions about re-routing or upgrading utilities without a proper asset register.
Jeddah has also suffered from two major flooding incidents in 2009 and 2011, which led to more than 130 deaths and widespread damage to cars and properties. Contributing factors included infrastructure that was not built to plan, and homes built on flood plains.
New flood prevention schemes were being installed last year to make sure there is no repeat of this, with the work involving 12 new dams, 20km of canals and 85km of new pipe networks.
Other areas need urgent attention, though. Saadawi admits that a lot of effluent that has been treated at great expense is currently flushed back out to sea. The city treats around 1mn m3 of water per day through three processes. And although the municipality uses around 100,000m3 of this for its own purposes “the rest, we just throw into the sea”.
“We try to persuade people to come and take it. Commercially, it costs much less than potable water. But still we have problems to try to convince people to use this for irrigation, construction, for industry. It will take some time I’m sure.”
The other issue is capacity. Akram Omar, development director for Emaar Middle East, which is behind the huge Jeddah Gate project spread over 500,000m2 of land at the city’s old airport, says that it has gone through “a very tough experience” during its eight-year programme at the site.
“It’s not the issue of missing proper plans; it’s getting things done right and on time. We lack implementation,” he said.
“Infrastructure is a necessity. A community or property – residential, retail or whatever – has to be served.
“Without infrastructure, there is no value of a running property.”
He said that the area in which Jeddah Gate is based was part of a masterplan developed by a former mayor in 2008 that was designated as a major new downtown – so much so that although it only covered 5% of the city’s land area, it was expected to make up 20% of its electricity requirements.
“That shows how vibrant and how dense the heart should look like.”
It should, therefore, have been properly covered by power, water and sewerage networks. Omar said that as a private developer, it had committed to developing proper infrastructure to homes, but “the availability of service at the network is not always there on time”.
“That’s a major challenge in Jeddah,” he said. “Practically, on the ground I believe that the private sector is suffering from the lack of proper infrastructure network.”
He argued that the challenge of improving Jeddah’s utilities could also present an opportunity and that if a business model could be worked out, it could encourage private sector infrastructure developers into the Kingdom.
“I haven’t seen here in Saudi Arabia the private sector stepping into utility development.”
Jame, however, believes that privatisation of utilities in the Kingdom is “many years away”.
The main reason for this is cost. Potable water at around six halala per m3 is subsidised by the government, meaning there is little chance of a return for firms who develop utilities unless prices changed drastically.
“Privatisation would enhance the efficiency and quality. I worked in the UK for many years. Yorkshire Water had 5,000 people before privatisation and after it only had 800. The system was run much more efficiently.”
However, he added that even in the UK companies made profits that were both low and tightly regulated.
“It’s not really a viable investment in this country. You have to improve the water delivery, the quality – all of these things have to be done before you even think about privatisation.
“I don’t think it is going to happen within ten years.”
Saadawi said the creation of NWC had been like a “partial privatisation” as it had been freed from many of the rules and protocols that were in place across other cities in the Kingdom. Jame and Omar both agreed that it had done well in its five years of operations to date.
“I’m impressed with what they’re doing and I’m sure that within a few years they’ll be on a par with many international water companies,” said Jame.
Omar added: “We see a lot of efforts happening from the Saudi government and the private sector in delivering the right infrastructure, but it will always be a challenge in the coming years in terms of removing obstacles to (achieving) the rate of growth we all need.”