Investing in water: Boosting supply and enhancing delivery are top priorities

Recognising that severe water scarcity requires concerted action, policymakers are aiming not only to boost supply through mega-projects but also to enhance delivery through the improvement of water and wastewater networks. To achieve these goals, current and anticipated investments from the private sector are key to achieving these goals.

TRANSFERRING SUPPLY: The Disi Water Conveyance Project is currently under development by Turkey’s GAMA Energy on a build-operate-transfer (BOT) model, in a joint venture with the US’s General Electric. Although the project was delayed in 2011, it is now back on schedule. “We still anticipate the pipeline to be complete and delivering to Amman by early 2013, although possibly not at full capacity,” country manager for GAMA Power Systems, Ahmet Ligvani, told OBG. The project is now around 75% complete, with 170 km of 270 km of entrenched pipeline ready for operation, he added.

Supplies from Disi will help supply a rapidly increasing national water demand, driven by a growing population and heightened economic activity.

FROM RED TO DEAD: “The only long-term solution is desalinated water,” Ali Subah, the assistant secretary general at the Ministry of Water and Irrigation (MoWI), told OBG. There are two proposals to convey Red Sea water to the Dead Sea, desalinating some of it along the way. The first is the Red-Dead Water Conveyance project, a multilateral World Bank initiative between Jordan, Palestine and Israel currently being studied for economic and environmental feasibility. “But in addition to this,” said Subah, “we are studying the potential of pre-qualified consortia to implement the Jordan Red Sea Project (JRSP). This could become the first phase of the regional initiative, if the latter goes ahead.”

Two of the financial and technical proposals from the six qualifying consortia – Accionna-Mitsubishi, ACWA Power, Jordan Red Sea Group, Orascom Construction Industries, Samsung C&T Corporation and Sinohydro Corporation – have been submitted and are now being studied by the MoWI. The results should be announced by the middle of 2012, Subah said, with implementation due to begin early next year.

The projects have inspired considerable interest among investors, one of which is GAMA. “In addition to our work on the Disi Project, Jordan remains a live market for GAMA,” said Ligvani. “We are looking at the Red-Dead projects as an investor and a contractor.”

FREE-FLOWING: Enhancing delivery is as important as increasing supply. Jordan’s Millennium Challenge Account (MCA) is looking for private-sector involvement in the $108m Water Network Project, which seeks to reduce water losses in the Zarqa Governorate from 52% to 35%. “The project is planned and approved, and we are now seeking the final investment,” Subah said. Documents are being prepared for the expansion of wastewater-treatment capacity in the Northern governorates of Irbid and Jerash, which will be funded by the German development bank, KfW. The treated water will be for irrigation in the Jordan Valley.

This follows hot on the heels of ongoing private-sector involvement. Since late 2010, the MCA has worked with a Jordanian-US-French consortium to implement a $93m expansion project at the Al Samra Treatment Plant in Zarqa – the governorate that receives 80% of Greater Amman’s wastewater. Implementation of the BOT contract was set to begin in the first half of 2012, according to Basem Telfah, the director of Al Meyyah at the project management unit of the MoWI. Another plant being constructed by South Korea’s Kolon is expected to be complete by 2013.

ENCOURAGING INVESTMENT: Private sector investment in water management is also increasing. In September 2011, France’s Veolia Water MENA signed a water management contract for work in parts of northern Jordan. “We are planning private involvement in the Zarqa water administration,” Telfah said, noting the company is awaiting government approval. “In the current political climate, there is considerable opposition to privatisation. However, we are privatising only the management of these networks, not their ownership.”