Business Successes
SAUDI ARABIA
UK fi rm delivers water sector PPPs in Saudi Arabia
Hyder Consulting UK Limited is successfully tapping into the substantial Public Private Partnership (PPP) market in Saudi Arabia and facilitating ongoing water sector reform. A history of under-investment, a lack of know-how, limited human resource capabilities and one of the lowest water supply tariffs in the world had resulted in poor effi ciency and performance in the Saudi water sector. Water supply in Jeddah was typically provided only once every 10 days and a tanker delivery service to supply water direct to customers’ tanks only served to escalate supply problems.
Management contract
Recognising the importance of water and wastewater infrastructure in the growth and success of the country, the Saudi government was eager to address the huge disparity in water services. To this end, Hyder was appointed in January 2007 to provide transaction advice to the Ministry of Water and Electricity (later to become the National Water Company or NWC). Hyder supported the government’s goals of water sector reform by letting a PPP management contract for water and wastewater services in Jeddah. Hyder’s transaction advice covered the full procurement
process including prequalifi cation, request for proposals, evaluation, negotiation and closure. The transaction services fee was approximately £1 million and the project was delivered within a challenging 15-month programme, with the management contract secured by Suez in June 2008 for US$70 million (approximately £43 million).
Route to market
Prior to Hyder’s appointment, attendance at UKTI events such as the UK-Saudi business seminars was very useful in gaining information about working in the country and local contacts. In addition, the company’s increasing reputation in the region, due to similar water sector PPP deals in UAE and Oman, enabled it to meet with the Saudi Deputy Minister for Water and Electricity to outline its proven capabilities and experience. Throughout the lifespan of the project, Hyder maintained a
consistent presence in Saudi Arabia (although the entire team was not necessarily present in the country at any one time), supplemented by logistical support from Hyder Consulting Middle East Limited. This enabled it to identify issues promptly that would form the scope for the management contract. To ensure seamless communication, bi-lingual Islamic staff carried out technical due diligence, facilitated translations and helped overcome cultural differences. In addition, the Ministry provided invaluable support in expediting visa applications prior to travel into the country.
Looking ahead
The issues in Jeddah are not unique - other Saudi cities have water and wastewater services, which will require investment to maintain or even regain adequate levels of service in due course. The country’s high population growth rates are expected to compound the situation by increasing demand on previously neglected and poorly maintained infrastructure. The model that Hyder designed, delivered and tested in
Jeddah has formed the basis for PPPs in other urban areas of Saudi Arabia and the company is pleased to be supporting the NWC with transaction advice for water sector PPP deals for Makkah/Taif, Medina and Dammam/Khobar. Together, these serve as a good indicator of the Saudi appetite for future PPPs and that continued business in Saudi Arabia, much like in other geographies, is built on establishing deep trust with the client.
To read about the recent UKTI mission to Saudi
Arabia click here
To fi nd out about another UK company that has achieved success in Saudi Arabia click here
Hyder’s management advisory team receive an award at a ceremony in Jeddah to mark the signing of the management contract
For more information on Saudi Arabia click here
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