Professional Documents
Culture Documents
Restructuring Program
Presented By
ABDULRAZZAG A. HIJAN
Saline Water Conversion Corporation
Director, Privatization and Restructuring Program
July 1, 2010
بسم الله
الرحمن الرحيم
In the name of God, Most
Gracious, Most Merciful
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Content:
Introduction to SWCC
3
SWCC was established in 1974 with a main purpose
to support natural water resources by means of
seawater desalination
SWCC General
Objectives
Source: SWCC
(*) SWCC bylaws approved by Royal Decree 4
SWCC aims at meeting Saudi Arabia’s growing water
needs while pioneering the desalination production
and transmission sectors
SWCC Vision
and Mission
SWCC General
Objectives
Meet the kingdom’s desalination water demand
and contribute to economic and social growth
Mission
through effective investment in human and
SWCC Activities physical asset resources
5
SWCC’s objectives are local and international
6
SWCC is engaged in power and water generation
activities as well as research activities in the
desalination sector
Main activity: Planning, construction, operation and
Water
maintenance of seawater desalination plants
SWCC in Brief Desalination Process: Production of water either through dual or single
Production purpose plants (MSF, MED, RO)
7
SWCC: current and planned operations
AL WAJH
ALQAT
UMLUJ 29 pumping stations
SHUQRA RIYADH HAFUF
158 storage tanks (capacity: 9M m3)
MADINA MUNAWARA
YANBU 17 blending stations
ِAl-AZIZIA
Large Plants RABIGH MAKKAH
MUKARAMA
New Projects
JEEDAH TAIF
Satellite Plants
Al-SHOAIBA
Al-LEETH
Jeddah RO 3 (200,000m3/day)
Regional Reservoirs Al-QUNFIDHAH Ras Azzour (2,400MW and 1,025,000m3/day)
Al-BIRK KHAMIS
Water Transmission ABHA MUSHAYAT Yanbu 3 (1,700MW and 550,000m3/day)
Systems AL-SHUQAIQ
FARASAN Other small projects such as Umluj, Wajh,
Rabigh are under construction (6 plants with a
total of 63,000m3/day)
Various pipelines under construction from
Shuqaiq, Shoaiba, and Jubail
Source: SWCC 8
Kingdom of Saudi Arabia is the largest producer of
desalinated water in the world, accounting for 18% of
total world production
KSA Desalination Share KSA Desalination Share
in the World in the GCC
OM AN
BAHRAIN 1.38%
1.32% KSA KSA
QATAR SPAIN 18.00% 41% UAE
3.39% 7.64% 33%
UAE
OMAN
OTHERS 16.66%
3% KUWAIT
27.36% BAHRAIN QATAR 13%
3% 7%
KUWAIT
USA
6.46%
17.80%
Source: SWCC 9
Content:
Introduction to SWCC
10
0
Main Challenges in the Saudi Water and Water Demand vs. Planned Supply in KSA
Desalination Sector (Million m3/day)
8.34
High per-capita consumption (~220 liters /
capita / day) Water Shortage
0.95
Rapid increase in water demand driven by
population and GDP growth 6.19 Supply - SWCC
Increased pressure to mitigate environmental 2.21
impacts resulting from the conventional 0.70
exploitation of water resources Supply - IWPP
2008 2025
17,453
Transmission
5,802
2,337 Transmission
2,422
2,051 Power
CAPEX OPEX
14
e
Significant investment
opportunities for private
sector Incorporate as government-owned holding
company and then possibly float on stock SWCC Holding
exchange
Old Production Plants: Jeddah-3, 4, RO1 and RO2, Jubail-1, 2 A and 2 B, Birk-1,
Haql-2, Khobar-2, Rabigh-1+TR1, Wajh-2+TR1-3, Farasan-1+TR1, Umlujj-2, Duba-3,
Azizia-1
Introduce PSP in value creating priority
assets, following “IWPP model”
abc Existing / Built by SWCC abc To be Implemented by PPP
*) Due to the present economic situation and the difficulties in ensuring financing, Yanbu -3 and Ras Azzour will be tendered as an EPC contract by SWCC
Source: SWCC Studies and Projects 16
Content:
Introduction to SWCC
17
SWCC Privatization and Restructuring Program Steps
Phase 1: Preparation Steps and Detailing Phase 2: Phase 3: Execution of Phase 4:
Studies Approvals Privatization & Restructuring Holding Co.
Privatization
Obtain Complete
Prepare
Develop Approval Detailed Rollout
Report on Introduce PSP
Complete Finalize Privatization from Board of Restructuring, Restructuring,
Requirements at the Level of
Internal Consultant Strategy and Directors & Commercializa Create
to Develop the Holding
Preparations Contracts Restructuring Supreme t-ion and ProdCos and
Privatization Company
Plan Economic Transaction Introduce PSP
Strategy
Council Studies
Preparation Selection of Completion Strategy and Reports Organization Rollout to Management
of a report implementati of bidding organization submittal detailing and the new org. contracts
on on teams process Technical Stakeholder HR readiness and IPO (long
requirement and Selection of requirement presentatio studies processes term)
s to develop committees consultants s ns Commercial Creation of Potential PSP
SWCC’s Developmen and Financial Strategy agreements the Holding in
privatization t of finalization requirement approval Documentati Company Transmission
strategy and information of contracts s from SWCC on required Creation of
organization center Legal Board and for Royal Production
restructuring requirement Supreme Decree Company
s Economic Tender PSP in
Change Council preparation Production
management Companies
3 Months 4 Months 5 Months 8 Months 18 Months 17 Months Today ~5 Years
18
For the past 17 months SWCC has been conducting a 3
stream restructuring exercise encompassing 9 modules
months 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Lead Execution
Advisor Advisor
Management and Organization Restructuring Strategy
Module 1 Organization Structure, Manpower Plan and Redeployment, Advisor
Management Processes, Authorities, Governance, Grievance
IT Strategy
Mod. 2 IT Architecture, IT Advisor
Strategy Based
Transformation
Implementation Plan
Stream I
Module 6
Stream II
Change
SWCC Privatization and Restructuring Program - Main Achievements and Next Steps
East
Coast
Headquarters
SWCC (As Is)
West
Coast
ubna Y
abi aoh S
qi aquh S
li abuJ
haddeJ
corporate core and business units
ij f ah K
Production Business Units
r aboh K
etill et a S
Corporate Core
SWCC (To Be)
-ri ss A- qi aquh S
nazi J
hani da M
- ubna Y
nr et s a E
SWCC organization restructuring involves setting up of a
ec ni v or P
ti n U ss eni s u B T D& R
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Critical items need to be addressed in the
institutional setting and commercial relations for
SWCC to operate Futureon a commercial
Institutional Setting and Commercialbasis
Relations
ECRA Regulation
Credit
Support Saudi Ministry of
Aramco Finance
Shuqaiq
Khobar
Jubail
Shoaiba
Yanbu
Khafji
Jeddah
Satellite Plants
Ras Azzour
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The first private sector participation transaction is
scheduled for 2012
Private Sector Participation in Production Companies
Estimated Cost
New Plant 2010 2011 2012 2013 2014 2015
(M USD)
Legend
Time span for Transaction Total Expected
3,291
tendering and award Capex
The Saudi Water Sector is attractive and growing, benefiting from the full support of the
government to meet the strategic aim of production efficiency and private sector
participation
The water sector benefits from the continuous support of SWCC to the private sector in
key areas of production, transmission and R&D
Potential local and international investors can look for a reasonable return, flexible
payment terms, well defined risk allocation, clearly defined responsibilities & obligations
of both parties (stakeholders & the private sector), through a fair and a transparent
bidding process
Private sector local and international participation in desalination sector benefit the
broadest range of players: investors, financing institutions, operators, EPC contractors,
equipment and materials providers etc.
Source: SWCC Privatization Program 25
CONTACT DETAILS
For further information please contact:
Abdulrazzag A. Hijan
director of
Saline Water Conversion Corporation
Privatization and Restructuring program
P.O.Box. 5968
Riyadh – 11432, Saudi Arabia
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THANK YOU
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