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PRESENTATION IN SWPF 2011, NWC FORUM (FOCUS DAY) 7 TH DECEMBER 2011- JEDDAH HILTON, JEDDAH

Opportunities in New Cities & Capital Delivery Program. PRESENTATION IN SWPF 2011, NWC FORUM (FOCUS DAY) 7 TH DECEMBER 2011- JEDDAH HILTON, JEDDAH. Saud Rifki Senior Manager, Privatization. INTRODUCTION. National Water Company Formation, Role & PPP Implementation.

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PRESENTATION IN SWPF 2011, NWC FORUM (FOCUS DAY) 7 TH DECEMBER 2011- JEDDAH HILTON, JEDDAH

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  1. Opportunities in New Cities &Capital Delivery Program PRESENTATION IN SWPF 2011, NWC FORUM (FOCUS DAY) 7TH DECEMBER 2011- JEDDAH HILTON, JEDDAH Saud Rifki Senior Manager, Privatization

  2. INTRODUCTION

  3. National Water CompanyFormation, Role & PPP Implementation • January 2008 -Formation of National Water Company (NWC) thro’ Royal Decree • Joint Stock Company with an authorized capital of SR 22 billion (US $ 6 billion) ATTRACT INT’L INVESTORS & OPERATORS • Responsible for water and wastewater services in the urban areas of the kingdom • June 2008 – Began formal functioning taking over W & WW services in Riyadh and Jeddah • Water & Wastewater assets of the city being taken over transferred to NWC • PPP Management Contracts • July 2008 – Riyadh • Sep 2008 – Jeddah • Jan 2011 – Makkah - Taif

  4. Objectives of Privatization (PPP) Bring International Best Practices World Class Customer Services Improved Operating Efficiency Reduced Operational Costs Efficient Management of CAPEX & OPEX Build Commercially Viable Organization Enabling Environment for Private Sector & International Investor / Operator Participation Incentive to early increase of capital expenditure to reduce O&M costs Expedient construction of water and wastewater infrastructure

  5. CITIES WITH NWC

  6. The Cities & PPP Contracts (1/2) Riyadh – From July 2008 Veolia Water Saudi (French) 6 years (Management Contract) Jeddah – From Sep 2008 Suez Env + ACWA Power (French Saudi Consortium) 7 years (Management Contract) Makkah / Taif – From Jan 2011 Saur Int’l + Zamil O&M (French Saudi Consortium) 5 years (Management Contract) Next in line – Madinah, Dammam / Khobar PPP Model – To be on O&M Joint Venture Unit – Plans under study for transition and implementation

  7. The Cities & PPP Contracts (2/2) • Objectives of Management Contracts • Improve operational efficiency for instant reduction in water leakage, continuity of water supply, improved revenue collection, billing & metering, training, customer services, coverage, etc • Major Scope of Management Contracts • Water production, treatment , distribution and wastewater services • NRW reduction • Customer Services • Training Program for employees • Implementation of IT systems • Performance Standards and incentive KPIs • Target Performance Standards • Incentive KPIs

  8. Future Plans for other cities *Total KSA population: 27.13 Million

  9. Achievements in Three Years of PPP Operations (1/2) Customer satisfaction index Average time to install connection Complaint resolution 1% RIYADH Days JEDDAH 35% Hours 5% 37% % - 49% -50% 85% 85% 84% - 35% 0% 45% 2008 2009 2010 2011 2008 2009 2010 2011 2009 2010 2008 2011 Number of new wastewater connections per year # 84% 40,000 30,000 20,000 10,000 2011 2008 2009 2010 *

  10. Achievements in Three Years of PPP Operations (2/2) Service continuity Riyadh Jaddah % 100% 55% 55% 43% 34% 32% 31% 22% N/A 2009 2010 2011 Volume of water saved due to leak reduction 21% ‘000 m3 134% 2008 2009 2010 2011

  11. FUTURE PPP MODEL

  12. Realizing our vision by switching gear towards a Business Operating Model Corporate Module evolution . Holding Company with a successful portfolio of BU’s/ JVS Current Operating Model Potential Future Operating Model Corporate Core / CEO Corporate Core / CEO Design of the Corporate Center(incl. how it both serves and creates productive structural tension with BUs) Contractual Relationship Operationally Involved Corporate Policy Strategic Guidance Results/ Accountability Service Management Contracts City Business Units (CBUs) Business Units (BU) Enterprise / EnablingFunctions Shadow Management Request Service (SLAs) Design of enterprise / enabling functions Define business unit boundaries and inter-relationships

  13. Four clusters will be formed Proposed O&M services contract clustering # of contracts/ annual value (SAR mil)/ Thousands of inhabitants 153 East 35 86 Northwest 21 9 2,639 15 62 20 32 22 1,745 13 Tabuk 4 22 Jubail 3 Population served Value Contracts Value Population served Population served Contracts Dammam/ Al Khobar Buraida/ Onaizah Potential to combine into single cluster if West (north) SPV partner is the same partner as West (south) Al-Hofuf & Al-Mubarraz Madinah Riyadh Yanbu 672 4,583 Central 6 Southwest 5,905 493 Makkah Jeddah 627 627 4 4 Taif 202 26 Abha/ Khamis-Mushayat 1 1 11 74 13 Population served Contracts Value 121 Map legend 82 NWC captive city Captive in 2012 Population served Contracts Value Captive planned after 2012 1 Population base year is 2009

  14. BUSINESS OPPORTUNITIES Consultancy & Technical Studies Technical Due Diligence O&M Joint Venture Partners / Investors Water & WW Operations Capital Program Management ICT – Implementation of Technology Solutions • Infrastructure Development • Water Distribution Networks & House Connections • Wastewater Collection Networks • Wastewater Treatment Plants

  15. CAPITAL DELIVERY - HIGHLIGHTS

  16. Current Water Services Situation with NWC

  17. CAPEX & OPEX REQUIREMENTS FOR 2012 – 2020 (KSA) Combined Water & Wastewater TOTAL = 249 Billion SAR Requirements for Wastewater TOTAL = 133.9 Billion SAR Requirements for Water TOTAL = 115.1 Billion SAR

  18. Budget Estimates for 2012 City Business Units

  19. Achievement Highlights of 2011 2011 Projected KPI Results Capital delivery Improvement and Project Acceleration

  20. Launching one of the biggest Sewage Infrastructure Project worth more than SR 8 Billion in JEDDAH 2011 Highlights of Major Accomplishments/ Success Stories • Project completion reduced from 5 to 3 years. • Massive connections with 120,000 houses in 2 phases • Coverage increase from 22% to 72%. • A total of 2,500kilometers of pipelines, mainlines, tunnels, etc. • Opening of (4) WWTP with combined capacities of 450,000 m³ /day, plus Al Khumrah 4 capacity of 360,000 m³/day brings the total treatment capacity for Jeddah to 1,000,000 m³/day • The biggest Lift Station in the region with capacities topping 1,000,000 m³/day and a depth of 80 meters.

  21. NWC ventures into Renewable Energy for 2 new WWTP 2011 Highlights of Major Accomplishments/ Success Stories • Living up to its strategy in the sustainable management of the environment, NWC had started construction of the 1st WWTP equipped with “combined heat & power generation” – Al Kharj WWTP to serve Riyadh w/ 200,000 m³/day capacity and generation capacity of 2.5 megawatt • Bidding process for another heat-to-power WWTP in Jeddah Airport 2 has commenced which will, after completion, be the 2nd biggest plant in its kind in the Middle East with a generation capacity of 7 megawatt and treatment capacity of 500,000 m³/day.

  22. THANK YOU

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