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Written by: Allan R. Budris, P.E.
www.WaterWorldCE.com
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www.wwinternational.com February/March | 2011
Cover image courtesy of
istockphoto.
See Middle East/Africa
regional spotlight starting on
page 18
Contents
February/March 2011 Vol. 26 Issue 1
$55 Single copies US & Intl, $36 Digital (worldwide)
To receive this magazine in a digital format, go to www.omeda.com
18
34 45
Technology Roundup
Editorial Focus
PUBLIC-PRIVATE PARTNERSHIPS
38 PPPs are now growing in demand and flexibility to meet pub-
lic sector demands. A review of latest international activity.
METERING AND WATER DEMAND
42 Increasing tariffs and introducing meters continues to be a politi-
cally sensitive topic but the U.S. is making progress, with one utility set to
increase its average water bill by 206% by 2012.
TRENCHLESS TECHNOLOGIES
45 Progress update of a trenchless installation to help flood-proof the UK
URBAN REHABILITATION AND LEAK DETECTION
46 An update on urban rehabilitation projects across Poland.
5 Perspective
6 News
16 Legal Perspective
47 Show Preview: Wasser Berlin
54 Technology Roundup: Corrosion Control
55 Product Review: Valves, Fittings & Controls
56 Diary
84 Ad Index/Web Promo
WATER LEADER FOCUS
12 The 2015 goal for the Millennium Development Goals is fast
approaching but how are we progressing towards the drinking water and
sanitation targets? Summary of a WWi live international webcast.
CREATIVE FINANCE
14 Water and wastewater utilities in Western Europe are poised to spend
an estimated 89.8 billion over the next five years to bring infrastructure up
to the standard of leading countries such as Germany.
Regulars Regional Spotlight
MIDDLE EAST
18 What opportunities exist for water and wastewater companies in
Saudi Arabia and Bahrain? WWi visited both countries to find out more.
24 Engineering Lebanons Lifeline: An update on the Awali-Beirut Water
Conveyance project that aims to transport water to urban areas of Beirut.
27 USAIDs water reuse and environmental conversation project in
Jordan aims to improve industrial water reuse. Heres why.
30 Desalinations fate across a troubled MENA. A look at desalination
project progress before and during the period of civil unrest.
34 A new code of practice hopes to raise the profession standards of
borehole drilling for rural water supplies across Sub-Saharan Africa.
54 Corrosion Control: Pepperl+Fuchs introduces its CorrTran, designed
for corrosion monitoring needs; a flow meter designed for high accuracy
measurement in challenging conditions; low profile sump pump that elimi-
nates corrosion and corrosive resistant materials for tanks and labs.
Product Review
55 Valves, Fittings & Control: the ValveSight from Flowserve Corporation
launched for smart electric actuators; seat ball valves ideal for abrasive sur-
faces; new certified ball valves from Metso and electro pneumatic control valve.
News Highlights
6 Consultation closes on UK super sewer
8 Qatari to lead ExxonMobil water research
9 Mundaring contract establishes PPP in Western Australia
10 Befesa secures 60,00m
3
/day desalination contract
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www.wwinternational.com February/March | 2011
SUBSCRIBER SERVICE: P.O.Box 3209 Northbrook, IL USA 60065-3209, Tel: (847) 559-7501 Fax: (847) 291-4816 E-mail: wwi@omeda.com, Water & Wastewater International is published six times a year. Authorization to photocopy items for internal or
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Consulting Co. [Oegstgeest,
The Netherlands]
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MANAGER Degrmont
Technologies [Paris, France]
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DaimlerChrysler [Toluca, Mexico]
IAN LOMAX Global Marketing
Manager - Desalination Dow
Water Solutions [Rheinmuester,
Germany]
PAUL OVERBECK
Executive Director International
Ozone Association-PAG
and International Ultraviolet
Association [Phoenix, USA]
ANDREW WARNES
Senior Product Manager -
Systems Pentair Residential
Filtration - A Joint Venture of
GE & Pentair [Chicago, USA]
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_______________________________________
CHANGING
WATER SOLUTIONS
IN CHALLENGING TIMES
CALL FOR PAPERS: DEADLINE FOR SUBMISSIONS 18 MARCH 2011
WaterWorld Middle East invites abstract submissions for the inaugural 2011 conference.
This event will take place at Doha Exhibition Center, Qatar as a co-located event with
POWER-GEN Middle East.
Spanning over three days, WaterWorld Middle East 2011 will be a key forum for senior
executives and industry leaders from across the globe, to discuss a range of hot topics
concerning water and wastewater markets, resources and environmental challenges
within the MENA region and internationally.
Dont miss this prime opportunity to stay ahead of the competition and be part of this
informative, quality event to reach the regions key decision makers.
To submit your abstract for the conference, or for further information on exhibiting or
participating at the event visit
www.waterworldmiddleeast.com
For information about participating at the
conference as a speaker or delegate,
please contact:
Samantha Malcolm
Conference Manager
T +44 (0) 1992 656 619
F +44 (0) 1992 656 700
E paperspgme@pennwell.com
For exhibition and sponsorship
opportunities contact:
Roy Morris
Exhibit Sales Manager (International)
T +44 (0) 1992 656 613
F +44 (0) 1992 656 700
E rmorris@pennwell.com
Bridgett Morgan
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T +918-831-9130
F +918-831-9834
E bridgettm@pennwell.com
Owned and Produced by: Supported by:
Flagship Media Sponsors: Supporting Regional Publication:
MIDDLE EAST
Conference & Exhibition
24-26 October 2011
Doha Exhibition Center Doha, Qatar
www.waterworldmiddleeast.com
Conference Topics:
Water Sector Structure & Regulation Collection & Distribution Networks
Strategic Planning & Management Water Treatment
Desalination Wastewater Treatment
peristaltic pumps -
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$FFXUDWHGRVLQJPHWHULQJ /RZPDLQWHQDQFHFRVWV
...peristaltic technology
For Info. http://wwi.hotims.com RS# 6
9
February/March | 2011 www.wwinternational.com
Worldwide News
Asia/Pacif c
The recently awarded design-build-
operate (DBO) Mundaring Water Treat-
ment Plant project in Australia has been
labelled as the frst public-private partner-
ship of its type in Western Australia.
The Helena Water consortium, com-
prising Acciona Agua, United Utilities
Australia, Brookfeld Multiplex and Royal
Bank of Scotland secured the contract as
part of a 35 year concession.
It will have an initial capacity of
165,000 m
3
/day and will supply the
Goldfeld and Agricultural Water System,
including Kalgoorlie in the State of West-
ern Australia.
Bill Marmion, Government Water
Minister in Western Australia, said: The
consortium, which was one of two short-
listed for the competitive process by
the Water Corporation, brings together
a group with extensive experience and
success in delivering various water en-
vironmental infrastructure projects and a
very strong balance sheet.
This is Acciona Aguas second major
contract in Australia following the design
and current build of the Port Stanvac de-
salination plant in Adelaide, which it will
also operate.
As well as water, the company also
has 258 MW capacity of wind energy fully
operational in the country.
Mundaring contract establishes PPP in Western Australia
As part of the expansion to the Chan-
gi Water Reclamation Plant, Singapores
national water agency, PUB, selected
Black & Veatch (B&V) to provide consul-
tancy services valued at S$2.2 million.
The expansion involves retroftting
an additional membrane fltration treat-
ment process to the treatment facility
to increase its treatment capacity up to
60,000 m
3
/day of reclaimed water.
Already one of largest treatment facili-
ties of its kind, the Changi Water Recla-
mation Plants total capacity is 800,000
m
3
/day.
B&V said the membrane fltration ex-
pansion will observe sustainability best
practices, occupying a small footprint
within the existing site. Equipment will be
integrated with existing structures where
feasible and incur relatively limited capital
costs as a result.
Ralph Eberts, executive vice presi-
dent in Black & Veatchs global water
business, said: The result will be even
greater treatment fexibility to what is al-
ready regarded as one of the most ad-
vanced wastewater treatment facilities in
the world.
PUB opts for B&V to help expand Changi wastewater facility
An agreement has been signed be-
tween AECOMs design-build business in
the UK and Aquatech Systems Asia, for
the use of biological treatment technology
for industrial and municipal applications in
the Indian wastewater treatment market.
The partnership will see AECOMs Cy-
clic Activated Sludge System being dis-
tributed and a contract has already been
signed with the award of an integrated
waste treatment and recycle-reuse
project at Mumbai International Airport,
which will feature CASS (Cyclic Activated
Sludge System) technology.
A Sequencing Batch Reactor (SBR)
technology, the process uses a combi-
nation of biological selector and variable
volume reactor process. The process op-
erates with a single sludge in a single re-
actor basin to accomplish both biological
treatment and solids-liquid separation.
The partnership said CASS SBR technol-
ogy installations to date have included
capacities in excess of 150,000m
3
/day.
Mumbai airport contracts AECOM/Aquatech new partnership
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February/March | 2011 www.wwinternational.com
Worldwide News
Asia/Pacif c
A $2.8 billion programme has been
set out to improve clean water access for
three million families in Vietnam, including
half a million poor households who will
receive their own piped water connection
for the frst time.
The programme has been backed to
the tune of nearly $1 billion by the Asian
Development Bank and supported by the
Government of Vietnam.
At present, four in every ten families
living in Vietnam largest cities are not con-
nected to a central water supply system,
and only one in three towns have any form
of piped water supply.
Many piped water systems in urban
areas urgently need upgrades, with as
much as 30% to 40% of water lost be-
fore it reaches the end consumer, due
foremost to leaky pipes. Water loss con-
tributes to intermittent service from low
pressure.
One goal of the water investment
program is to reduce water loss in urban
areas to less than 20% by 2020, bringing
Vietnams cities in line with affuent Asian
cities, such as Seoul.
When four out of every ten liters of
water is lost before it comes out of the
tap, this is essentially pouring cash down
the drain, said Ayumi Konishi, ADBs
country director for Vietnam. Making an
upfront investment to plug the leaks gives
consumers a more dependable water
supply, enhances public health, and pro-
vides water companies with signifcant
cost savings.
The program will help water compa-
nies improve and expand clean water
supply in some of Vietnams largest cities
through the installation of new pipelines
and the repair and extension of existing
networks. In addition to infrastructure im-
provements, the program will enhance the
operational management and commercial
viability of water companies.
ADB is providing $138 million for the pro-
grams frst project in Ho Chi Minh City, where
many poor households are not yet connect-
ed to piped water systems, and are paying
almost twice the offcial water tariff.
Poor water coverage hits poor fami-
lies the hardest, and this investment pro-
gram will beneft these families most,
said Konishi. When poor families are
provided with piped water connections
it measurably boosts their income and
improves their well-being.
The Ho Chi Minh City project, which
will be implemented by the Saigon Wa-
ter Corporation, will improve pressure
and coverage for over half a million city
residents, and provide almost 20,000
families with their frst household water
connections.
The project is expected to increase
water availability in Ho Chi Minh City to
over 64 million cubic meters per annum
over the next decade.
The nationwide water investment pro-
gram is a cornerstone of the countrys
efforts to attain 90% piped water cov-
erage by 2020, with universal coverage
targeted by 2025.
Investment programme to boost water supply in Vietnam
In Brief
CHINA: RO market contin-
ues to show growth
CHINA: Toray has secured two
orders to supply reverse osmosis
(RO) membranes to seawater de-
salination plants Qingdao (Shan-
dong) and Caofeidian (Tangshan,
Hebei) in China. The two facilities
will produce a combined total
of 150,000m
3
/day. The Qingdao
facility is scheduled to start op-
erations in 2011, currently under
construction by Befesa and has
been touted as the largest RO
membrane desalination plant in
China. Drinking water will be
supplied to 7.5 million residents
in the city. Water produced from
the Caofeidian facility will mainly
be used as industrial water in the
industrial development zone.
GHANA: Befesa secures
60,000 m
3
/day desalina-
tion contract
A US$110 million contract has
been signed between the Gov-
ernment of Ghana and Spanish
frm Befesa Agua. Signed by the
minister of Water Resources,
Works and Housing, Alban
Bagbin, the reported 60,000 m
3
/
day desalination facility will
supply drinking water to the
Teshie-Nungua and neighboring
communities.
CHINA: Hyfux to develop
wastewater treatment
plant in Zunzi, Guizhou
Hyfux, through its subsidiary in
China, will develop a wastewater
treatment plant to treat up to
150,00m
3
/day for Zunyi City in
north Guizhou province, China.
The build-own-transfer (BOT) ar-
rangement will see the company
operate and maintain the plant
on a 30-year concession. The
project is scheduled to complete
construction in the second half
of 2012 and investment cost is
estimated at approximately RMB
200 million, which will be funded
through internal resources. The
two main districts of Zunyi City
have a combined population of
about 800,000 people, and the
whole region has a population of
approximately seven million.
Americas
As part of a rehabilitation process
following the devastating earthquake in
January 2010, Haitis National Director-
ate for Drinking Water and Sanitation has
selected Suez Environnement for a three-
year plan to restore drinking water and
sanitation services in the metropolitan
area of Port-au-Prince. The project will
be led by the frms French, Spanish and
U.S. subsidiaries, Lyonnaise des Eaux,
Agbar and United Water and investments
needed for the project will be fnanced by
the Inter-American Development Bank
and the Spanish Agency for International
Development Cooperation (AECID). As
part of the collaboration, solutions will
be provided to meet the urgent require-
ments of the 2.5 million inhabitants of the
Port-au-Prince region and the long-term
management of its essential water and
sanitation services.
Suez to lead water recovery plan in Haiti
The Clean Water America Alliance has
announced winners of the 2011 U.S. Wa-
ter Prize for watershed-based approach-
es toward water sustainability.
Winners, in alphabetical order in-
cluded the City of Los Angeles, Milwau-
kee Water Council, National Great Rivers
Restoration & Education Center, New
York City Department of Environmental
Protection, and the Pacifc Institute.
The City of Los Angeles, particularly, the
Department of Sanitation, and New York
City Department of Environmental Protec-
tion are planning, integrating, and incorpo-
rating innovative green infrastructure ap-
proaches and increasing resource recovery
through water reuse and other cutting
edge technologies. Both cities are maxi-
mising their resources through community
partnerships and involvement.
The Milwaukee Water Council is es-
tablishing public-private collaborations
that advance water technology and pro-
mote economic development.
As a result, the Milwaukee area is be-
coming known as a World Water Hub,
according to Clean Water America Alli-
ance. A state-of-the-art facility, the Na-
tional Great Rivers Research & Education
Center (Alton, Ill.) is mobilising volunteer
communities around the confuence of
two rivers and creating a national and in-
ternational center for science, education
and public outreach.
The Pacifc Institute is said to be
consistently in the vanguard of water is-
sues from water use effciency to climate
change, informing political debate and
elevating public awareness.
These fve water champions refect
the diversity of America and set a shin-
ing example for innovating, integrating,
and collaborating from coast to coast to
sustain Americas most precious liquid
asset, said Ben Grumbles, president.
U.S. Water Prize winners announced by CWAA
Tihe Government of Ontario in Can-
ada has entered into a strategic alliance
with Singapores national water agency,
PUB, to conduct advanced clean water
research and development.
Under a Memorandum of Under-
standing (MOU), Ontario and PUB will
collaborate in the areas of clean water
technologies and exchange knowledge
and expertise that leverage each jurisdic-
tions resources. This MOU bodes well
as Singapore aims to draw world-class
research and development of talent and
companies in the water sector, in line with
our aspiration to build Singapore as a hub
for water knowledge and solutions, said
Khoo Teng Chye, executive director of
the environment and Water Industry Pro-
gramme Offce (EWI) and chief executive of
PUB.
Ontario is the frst North American juris-
diction to enter into such an agreement with
Singapore, even though more than 70 water
companies and 14 corporate research and
development centres have already set up
facilities and offces in Singapore.
The frst Lee Kuan Yew Water Prize
winner, Dr. Andrew Benedek, is a Cana-
dian citizen who founded Zenon, which is
based in Ontario.
Clean water technology research MOU signed between
Singapore water agency PUB and Ontario goverment
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_______________________________________
Making Ripples: Water Leader Focus
12
February/March | 2011 www.wwinternational.com
12
www.wwinternational.com
I
t was in 2000 that the Millennium Development Goals (MDGs)
were set out by world leaders at the United Nations Millennium
Summit. A goal was set out to reduce, by half, the population
of people without sustainable access to safe drinking water by
2015. Two years later, the World Summit on Sustainable Devel-
opment added a second target: to halve, by 2015, the proportion
of people who do not have access to basic sanitation. It is the latter
that is proving more of a challenge. The following excerpts have been
taken from the Virtual H20 event and archived webcasts can still be
found online at: www.virtualh2oevent.com.
MDGs: the next stage
As part of a live webcast that discussed the future challenges of meeting the Millennium
Development Goals (MDGs), WWi brought together some of the industrys leading experts.
Tom Freyberg summarises what the Stockholm International Water Institute,
International Water Association and WaterHealth International had to say.
MDG status and future goals
Glen Daigger, chief
technology offcer
at CH2M Hill and
president of the
International Water
Association
Its important to understand, when we are discussing sani-
tation, that we are talking about people who have access to
toilets. Firstly, of the wastewater generated on this planet, only
about 25% is actually treated. We are woefully behind in terms
of meeting this narrow goal and when weve accomplished
this, we still have a lot of work to do.
Its important to realise that the MDGS are very important
points but they are really signposts to improve water and sani-
tation. We are not done when weve achieved the MDGs.
We are at a time when we are reinventing how we are
using water in the urban environment. Nearly half of the hu-
man population will live in areas of water stress by 2025.
Its important to note that nearly all population growth in the frst half
of the 21st Century is expected to be in urban areas in developing
countries, which is a challenge yet an opportunity for us. However,
there is a lack of support for these urban water management utilities.
Our focus and our need for reinvention in the water industry is the
idea of integrated water and resource management. Principles that
we use in the water management remain the same, but the strategies
and practices that we use need to change, and are changing. We are
moving from managing water in individual components to managing
water in an integrated fashion.
We have a tremendous toolkit to use here. All of the methods are
being used in multiple locations around the world, and we are gaining
With regards to MDG on sanitation, the world is doing
quite badly. Between 1990 and 2008 there were 1.3 billion
people who gained access to improved sanitation. The
problem is that during the same period population growth
was 1.5 billion, so we effectively lost 0.2 billion people [with
access to improved sanitation]. And today, fgures show
that 2.6 billion people still do not use improved sanitation
facilities. So even if, in the 18 years between 1990 and
2008, we managed to serve 200,000 people per day with
improved sanitation (almost two people per second), we
are still not able to keep up with population growth.
To date progress has not been very good. In developed regions
99% of the population use improved facilities compared to 52% in
developing regions. Furthermore, at the current rate of progress, the
world will miss the MDG sanitation target by almost one billion people.
WATER SUPPLY
The situation with regards to water supply is far better than sanitation.
For a large part of the world we are able to serve the population. Two
billion more people have access to safe drinking water compared to
20 years ago.
The world has outperformed global population growth and progress
has seen more than eight million people (the population of Sweden)
gaining access to safe drinking water every month, over the past 20
years. And the achievements in the water sector, with regards to the
water, were highlighted in the UN MDG Summit held last year in Sep-
tember. There it was stated that water and sanitation were areas of suc-
cessful policy implementation in need of political commitment for scaling
up. This is a good indication that we are, in this part, doing well. While
87% of the worlds population now use drinking water from improved
sources, sub-Saharan Africa and Oceania are still lagging behind. Just
60% of the population in sub-Saharan Africa and 50% of the popula-
tion in Oceania use improved sources of drinking-water. Furthermore, in
China, 89% of the population of 1.3 billion has access to drinking-water
from improved sources, up from 67% in 1990.
ECONOMIC CASE FOR INVESTING IN WATER
World Bank estimates suggest that if you invest in water supply and
sanitation, you would get between US$3 to US$34 back per US$1
invested, depending on the region. In addition, if you go beyond what
is mandated by the MDGs for improved water quality, you could get
back between US$5 to US$60 per US dollar invested.
So what will it take to achieve the MDGs? We have all of the
necessary resources, apart from political will, to meet the MDGs. We
need to remove the political obstacles to improve water supply and
sanitation.
Some people have stated that we need more R&D to provide cost
effective ways of providing water supply and sanitation to developing
countries. However, if we have the return fgure of between $3 to $35
per dollar invested, I dont think we need to go much further on this.
We need political action and commitment - very few politicians
like to talk about sanitation. Its still a taboo subject and politicians
do not like to talk about sanitation or to be known as the sanitation
champion, incase it affects their political career. We have a very posi-
tive message to relay to political decision makers. There is a lot of low
hanging fruit but its ripe for picking and we can do it.
Meeting MDGs in the developing urban environment
Jens Berggren,
director, World Water
Week, Stockholm
International Water
Institute (SIWI)
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Making Ripples: Water Leader Focus
13
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Sameer Mithal, executive vice president for business
development at WaterHealth International (WHI)
Real-time Heavy Metals testing
for the Global Water Supply
Test for heavy metals in water such as lead or uranium quickly and at the push
of a button. Ideal for field testing water sources, process water quality control,
home inspection and in home water services. Starter kits from ANDalyze sold at
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experience with this toolkit, learning how to pull these tools together
that can perform at a much, much higher level.
Drinking water, used water, storm water and rainwater need to
be managed in an integrated fashion that captures the synergies be-
tween them to provide an integrated supply. This requires a change
in technical perspective, fnancing and planning.
Historically, cities have been planned and then the water industry
has come along afterwards. This is no longer the plan we can follow.
Water professionals need to be involved in the planning of the city,
so that the water infrastructure is part of the design and fabric of the
city. This is starting to happen in developed as well as developing
countries.
Most people understand the problems we face
on water globally. Whether you are talking about
2015 or 2025, water is a major human issue we are
trying to tackle.
Where you have communities of several thou-
sand people, there is usually a water
source. In our experience most habi-
tations have some access to water, otherwise they
would not exist. However, if its a standing source, it
is commonly contaminated. Most governments we
work with in these communities are overwhelmed -
they are focused on water availability and not quality
issues. The scale of the problem overwhelms gov-
ernments and availability of safe water can be as-
sured through the use of decentralized solutions.
BUSINESS MODEL
Our method is that we build the WaterHealth cen-
tres, take the water source used by the community
such as rivers, lakes or ponds which can be con-
taminated as the raw water input. Once it has been
purifed to World Health Organisation (WHO) stan-
dards, it is sold to the community. We sell it at a price
point which is affordable. For example, in Ghana,
where we operate, the sachet water that people buy
- around half a litre - is 20 times more expensive than
the water we supply, at a 20 litre capacity level. We
use half of the money that we generate [from the
tariff] for the operation of the plant, so we hire people
from the community to operate the facility, train and
pay them.
From the balance of the money that comes from
the centres, we take a share of the proft and share
the remainder back with the community, which we
call a community development fund. Community
leaders then decide how and where to spend it.
Regarding the commitment made at the UN
Summit at the end of last year, weve just entered
into a joint venture with the International Finance
Corporation and a local partner to install 50 cen-
tres over the next year in Bangladesh. Centres have
been pre-funded and the money is used to install
and operate these systems. The total of 50 centres
should address the needs of between 300,000 and
500,000 people, with each centre supplying water
for between 5,000 and 10,000 people on average.
The plan is to build several hundred more across
Bangladesh.
TREATMENT TECHNOLOGY
Its a very simple process - it uses blended RO (re-
verse osmosis), ultrafltration and arsenic, iron and
fuoride removal technologies where needed. The
patented UV WaterWorks delivers three to fve more
times ultra-violet dosage, with an effective high water turbidity (up to
NTU) and no degradation in UV dose due to fouling. The implementa-
tion is what is different, not the technology.
We are also in the process of introducing new technologies, com-
mon in other industries but not this one. This includes remote moni-
toring - putting in wireless sensors at different points in our system
that feed data back. This way we can monitor centres remotely. WWi
Decentralised water purifcation
Enquiry No. 111
For Info. http://wwi.hotims.com RS# 8
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Creative Finance
14
February/March | 2011 www.wwinternational.com
14
www.wwinternational.com
W
estern European water and wastewater utilities
supply drinking water and sanitation services to
390 million people across 17 countries. The Eu-
ropean water industry is valued at approximately
47.8 billion per year. Of this amount, 10% is
made up of water and wastewater treatment technologies, 1.6% in
water management and the remaining 88.4% in asset management,
which includes capital expenditures (CAPEX) and operational expen-
ditures (OPEX).
It is worth noting that 20% of the investments made by Western
European Utilities are in the rehabilitation of the networks and treat-
ment plants. Infrastructure of the water and wastewater utilities is
very capital intensive. Drinking water and wastewater networks have
a service life of up to 100 years and reservoirs have an even longer
lifetime expectancy. Treatment plants are rehabilitated to assure se-
curity of supply and high quality drinking water and environmentally
safe wastewater and sludge. Rehabilitation of this basic infrastructure
is fundamental to preserve physical assets for future generations.
To put a price on this future challenge, Western European water and
wastewater utilities are expected to invest 89.8 billion over the next
fve years to rehabilitate water and wastewater infrastructure. Such a
fgure should not come as a surprise.
The European Federation of National Associations of Water and
Wastewater Services (EUREAU) estimates that there are approxi-
mately 2.9 million kilometres of water and 1.9 million kilometres of
wastewater networks across Europe. Other infrastructure that must
be managed by the utilities comprises water abstraction facilities,
storage and treatment and for wastewater collection and treatment.
GERMANY LEADS THE PACK
Germany has the best water infrastructure in western Europe, as well
as low water losses and few disruptions to supply. It is also no co-
incidence that the country is more advanced when it comes to the
adoption of the EU regulation.
Furthermore, in Germany, investments in the water and waste-
water sector are fully paid by the end-users as water and waste-
water utilities already price water and wastewater services following
the cost-recovery principle of the Water Framework Directive. Thus,
consumers of these services in Germany directly fnance investments
in the sector and not the government, as is often the case in other
western European countries such as Ireland.
To reach this stage, Germany invested just over 100 billion over
the last 15 to 20 years. In order to catch up with Germanys rate
of water losses and overall operational effciency, other European
countries in the west now have similar objectives and utilities in these
countries have set up plans rehabilitate their water infrastructure.
PRIORITIES OF THE EU WATER AND WASTEWATER UTILITIES
European Water utilities must implement the EU Treatment Direc-
tives by providing high quality drinking water to 100% of the popula-
tion and protecting the environment by performing wastewater and
sludge treatment. In some countries water and wastewater utilities
still need to reach 100% of the population with these basic services
and are pressed by the European Union to reach these goals by
2015.
However, at par with investments in new water and wastewater
networks and new treatment capacity the utilities must also maintain
and rehabilitate the old networks and treatment plants, ensuring a
good operational performance.
With regards to rehabilitation, the priorities of water networks are
to improve drinking water supply and preserve the infrastructure for
future generations. This includes reducing water losses, expanding
and maintaining the wastewater network and water and wastewater
treatment plants.
Western Europe
Poised for Major Investment
To catch up with water leaders such as Germany, the rest of Europe is in prime position to
attract investment and bring its water and wastewater infrastructure up to scratch. The eco-
nomic situation may delay and lead to some projects being shelved, but in the west utilities are
set to invest 89.8 billion over the next fve years. Nuno Oscar Branco reports.
Figure 1. Drinking water and wastewater coverage and treatment
0
20
40
60
80
100
G
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Drinking water coverage Wastewater collection Wastewater treatment
Figure 2. CAPEX revenue splits 2007-2017
100
80
60
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0
2007
New build Refurbishment
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
R
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(
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Creative Finance
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February/March | 2011 www.wwinternational.com
REDUCING WATER LOSSES
In most western European countries the wa-
ter network is older than the wastewater net-
work, hence in need for more rehabilitation
investments. Frost & Sullivan estimates that,
across Western Europe, more than 40% of
the networks need to be rehabilitated. Ger-
many, according to a recent study by the
BDWE (Bundesverband der Energie- und
Wasserwirtschaft e. V.), is the country that in-
vests more in the drinking water sector (0.54
per m
3
) followed by England (0.53 per m
3
)
and France (0.33per m
3
). Water networks
are being replaced to prevent contamination
from lead pipes, to reduce water losses and
improve the management of the network by introducing control and
monitoring instrumentation.
EXPAND AND MAINTAIN THE WASTEWATER NETWORK
Just like with the water sector, Germany is also the country in Europe
that invests more into its wastewater sector (1.27 / m
3
), followed by
England and Wales (0.91 / m3), France (0.72 / m
3
) and Italy with
(0.11 /m
3
), respectively. According to the BDWE Germany spent
$7 billion in the wastewater in 2006, the lowest
amount since 1998 because of the phasing-
out of investments within the implementation of
the EC Directive on Urban Wastewater Treat-
ment. However, according to the same report
by the BDWE approximately 20% of the pub-
lic sewage systems are in need of rehabilita-
tion in the short to medium term and another
21.5% show small damages and need to be
rehabilitated in the long term. Thus, Germany
will remain an important market for rehabilita-
tion in Europe moving from water to wastewa-
ter networks. We estimate that utilities in other
countries will follow the same investment pat-
terns and will also invest in the rehabilitation of
its wastewater networks in the short to medium
term.
WATER AND WASTEWATER
TREATMENT PLANTS
The rehabilitation of the water and wastewater treatment plants
allows utilities to address different objectives. Firstly, to improve op-
erational performance. Secondly, to improve treatment performance
and fnally, to improve economic effciencies. Planning is fundamen-
tal to achieve these three objectives in parallel, as they are aligned
towards a similar goal which is cost reduction, security and quality
of supply and treatment.
The majority of investments are expected to take place in the
rehabilitation of wastewater treatment plants. In Europe there are
60,000 wastewater facilities and most of them still need to comply
with the EU treatment directives and be upgraded to perform nutri-
ent removal. A priority for wastewater utilities is to comply with the
Urban Wastewater Treatment directive by 2015. We estimate that
most sewage purifcation plants partly need to be retroftted by 2015
to meet stringent EU Wastewater treatment legislation, requiring nu-
trient removal in sensitive areas. In parallel with rehabilitation invest-
ments necessary to address the UWWTD, wastewater utilities are
also planning to introduce measures to improve operational perfor-
mance and improve its economic effciencies.
According to the European Union, for sensitive areas more strin-
gent treatment is in place for 72% of the pollution load, with a compli-
ance rate of 85%. Only the Netherlands, Germany and Austria are
100% compliant with the directive. The other member countries of
the EU are required to comply with this directive by 2015, thus antici-
pating new investments in tertiary and advanced treatment technolo-
gies are expected.
FUTURE INVESTMENTS
Investment priorities of European utilities vary according to location
and cost structure. The current economic situation, especially in the
southern European countries, might lead to cancellation or post-
ponement of some projects.
However, utilities across the continent need to invest in rehabilita-
tion in a bid to help reduce maintenance and operational costs. Such
investments will be important to mitigate future major problems that
could present even heftier costs. WWi
Authors note: Nuno Oscar Branco is an industry analyst at Frost
& Sullivan. This article is based on some of the key fndings of the
current research by Frost & Sullivan analyzing the Western European
Water & Wastewater Utilities Market. For further information please
email Fredrick Royan at froyan@frost.com.
Enquiry No. 107
878,000
5,105*
500,000
406,000
322,968
133,200
115,000
101,025
83,000
70,000
68,596
67,000
54,000
47,000
41,000
Figure 3. Water network and water losses per country, Western Europe
I
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s
Water network per country (km) Water lost as a percentage of total water distributed
*No data available for Greece
K
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Figure 4. Wastewater treatment plants and conformity with EU legislation treatment directives
N
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Legal Perspective
16
www.wwinternational.com February/March | 2011
16
www.wwinternational.com
I
t was at the end of 2008 when many in the water industry ques-
tioned whether there would be a new era of standardisation for
water/wastewater BOT projects. This was a result of the FIDIC (In-
ternational Federation of Consulting Engineers) frst launching its
Design, Build Operate form, which combined design & build and
a 20 year Operation Period within a single contract. Such a contract
was particularly ground-breaking as FIDIC was already considered
such an established brand internationally for design and build.
The form itself adopts the Green Field Model - a potential down-
side for water projects that are more typically a mix of upgrades to ex-
isting facilities, alongside new builds. But FIDIC too has since recog-
nised this limitation and plans to issue guidance which will make the
DBO form usable for Brownfeld projects. Another limitation is that
it has no fnancing element - there is no responsibility either for the
fnancing of the project or its ultimate commercial success (which
means that payment cannot be tied to tariffs). But even with these
limitations, is it suitable for water BOTs?
OPERATION AND MAINTENANCE PROVISIONS
The design build obligations more or less replicate FIDICs Yellow
Book (Design and Build) albeit now improved to introduce fexibility
into the time period for giving notice of claims. Under clause 10, the
contractor has to operate and maintain the completed plant as set
out in the Employer Requirements. This is as well as comply with the
procedures and requirements for operations and maintenance, pro-
vided by the Employer Contract Data (the Operation Management
System), the O&M Manuals and his own O&M plans. He is paid the
amount in the Contract Price for Operation and Maintenance.
This includes funds payable from an Asset Replacement Fund
(ARF) but with two essential catches. He cannot access this fund
either if the item was not identifed in the fund in the frst place (even if
replacement was unforeseeable, to coin a FIDIC term).
The Contractor is incentivised to outperform the ARF as payout of
any excess (according to agreed share percentages) and also of the
Employers additional security, the Maintenance Retention Fund (or
a Maintenance Retention Guarantee) are released at the end of the
term, following issue of the Contract Completion Certifcate.
In DBO projects with a fnancing element, the problem of ftness
for purpose liability over a 20 year period is solved by the introduc-
tion of special purpose vehicle. This makes a return on its equity and
effectively wraps the risk between the end of the D&B contractors
liability (say 12 years in English law) and any cap on the operators
liability. But there is no suggestion that this structure is envisaged un-
der the Gold Book because there is no fnancing element. This will
cause particular problems for water projects where typically, the DBO
contractor employs specialist suppliers to supply plant and equip-
ment and these contracts often have express liability expiry dates that
dont extend beyond a three year warranty period post completion
let alone 20 years.
FITNESS FOR PURPOSE
Taking a wastewater treatment plant as an example, there is the em-
ployers obligation to supply raw sewage within a defned catchment
to allow the plant to operate. This would require amendment of the
FIDIC Clause 10.4 (Delivery of Raw Materials) under which the Em-
ployer is responsible for the free issue and supply and delivery to
the Site of the raw materials, fuels, consumables and other items
specifed in the Employers Requirements. The clause goes on to
say that the Employer is responsible that all such items are ft for pur-
pose and comply with the requirements of the Contract in respect of
quality, purpose and function. Obviously we would need to include a
provision for both infuent quality and capacity parameters. This is the
sewage equivalent of ftness for purpose!
Equally, there would a need to be more extensive provision for
relief during the Operation Service Period. The provisions in the Gold
Book are somewhat unusual, certainly when compared with typical
water BOTs. Clause 10.6 simply says that if delay, interruption or any
failure to achieve outputs is caused by or due to a cause for which
the Contractor is responsible - in other words, is not down to an
Employer Risk. The Contractor is responsible for the consequential
losses of the Employer (ie. any losses including loss of revenue, loss
of proft and overhead losses).
Apart from the uncertainty of what those consequential losses
might be, where the employer is say, a municipality, there may not
be any losses at all. I would suggest a return to the more traditional
combination of KPI measures which weigh performance failures ac-
cording to their signifcance.
TECHNOLOGY
Another point relevant to a water treatment plant and long-term op-
eration is innovation and the use of new technology or new materials.
The employers representative may instruct the contractor to use new
technology, new products or new materials but what if those inputs
have an impact on the quality of the Operational Service? The con-
tractor can only object if the instruction will have an adverse effect
on operations, not if it may, or is likely to have such an impact.
Ultimately protection to the operator may arise simply from the fact
that he is not obliged (during the Operation Service Period) to pro-
ceed until the adjustment to the contract price has been agreed. But
there is no mechanism for arriving at that adjustment. This raises the
prospect of a running dispute where the employer may be very keen
to proceed (perhaps to ensure consistency with a wider network) and
the contractor is not happy with the price adjustment. This is obvi-
ously not healthy in the context of a 20 year relationship.
So is this DBO form genuinely gold dust for water BOTs and the
shape of things to come, or is the price of gold too high? It is prob-
ably the only standard form around at the moment and may have po-
tential for use where procurers are not seeking fnancing and simply
want design & build and operations & maintenance combined within
the same contract. However, there is still a long way to go to adapt
this form for use on water or wastewater treatment BOTs. WWi
Sarah Thomas is a partner with Pinsent Masons LLP spe-
cialising in water and mining projects and can be contacted:
sarah.thomas@pinsentmasons.com
Enquiry No. 109
DBO - Gold Dust for Build-Operate-Transfer (BOT) Contracts?
Sarah Thomas- Partner with Pinsent Masons LLP
The second in a series of legal columns to bring the industry up to speed with regulatory changes,
Sarah Thomas addresses the challenges with water or wastewater treatment build-operate-transfer
contracts adapting the FIDICs Design, Build Operate form.
This raises the prospect of a running dispute
where the employer may be very keen to proceed
and the contractor is not happy with the price adjustment
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For Info. http://wwi.hotims.com RS# 9
Big Motors.
Small Wait.
2010 Baldor Electric Company
Baldors new Quick-Ship (QS) large frame AC motor program
delivers the large motor you need faster than ever before.
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Regional Spotlight: Middle East & Africa
18
March/April | 2011 www.wwinternational.com
18
www.wwinternational.com
J
anuary is an ironic time to visit the Kingdom of Saudi Ara-
bia. Ironic because in a country in such desperate need of
fresh water, not to mention year round desert conditions,
its raining. In fact its raining heavily. So much so that many
streets in Jeddah are fooded.
The fact that road drainage is an alien concept here means one of
the main methods in shifting water is natural evaporation. Lucky for
the local population the following day is sunny and 25 degrees, then.
The city wasnt so lucky in 2009. In November devastating foods
washed through Jeddah, leaving thousands homeless.
Desert country cities, such as Jeddah, experience rain so rarely
that when it rains torrentially, the city isnt geared up to cope with it.
Cue a real opportunity for a country well versed on dealing with wet
weather to help out; the UK.
As part of a UK Trade & Investment and British Water mission
to Saudi Arabia and Bahrain, I am joined by a delegation offering a
wide-variety of products and services. From global, multi-million turn-
over environmental consultancies, to SMEs providing pipe fttings
and safety equipment; the mission hopes to partner individuals with
Middle Eastern companies and agencies in need of such services.
An example of international supply and demand at its best.
And the need for such work could not be so urgent. While pre-
dictions show Saudi Arabia could struggle to meet its water supply
needs by 2025, more worrying is the fact that only 45% of the urban
population has access to a sewerage system. Its been estimated
that the investment needed in sewerage systems and wastewater
treatment over the next 20 years will amount to 10 billion. Thats a
lot of money and key indicator why companies not already operating
in Saudi Arabia are so keen to do so.
Companies shouldnt be too hasty, however, when trying to se-
cure a slice of the market.
Do your homework and dont expect to come out frst time and
return with a big fat contract, advises Edward Ogilvie, chairman of
the British Businessmen Group in Jeddah. This is very rare. It takes
Land of the Black
[& Blue] Prosperous Gold
Political uncertainty has spread across the Middle East over the last couple of months but
future demand for freshwater supplies will continue to grow. Tom Freyberg visited
Saudi Arabia and Bahrain before civil unrest swept across the Arab world to fnd out what
opportunities exist when it comes water supply and wastewater treatment.
Under a protection programme the oil giant takes water samples regularly
from more than 400 groundwater monitoring wells
Saudi Arabias major oil producer, Saudi Aramco, is interested in
partnering with international water monitoring companies
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time to build business in this country and its important for the same
person to return.
An example of the time it takes to build business can be seen
from previous trade missions. A water and wastewater services pro-
vider recently signed a Memorandum of Understanding (MOU) with
a Saudi Arabian company, a whole two years after meeting them
during a previous water mission.
INSUFFICIENT INFRASTRUCTURE
With this in mind, the water delegation visits the National Water Com-
pany (NWC). When the frm was created in 2008, average supply fre-
quency (ASF) to the Jeddah population waste 22.9 days. Two years
later and ASF is down to 9.2 days.
In a recent statement, NWC says that water supply reached 942
million cubic metres in 2010, which compares to a fgure of 753 mil-
lion cubic metres in 2008. The company put this down to efforts to
increase the volume of water resources in cooperation with the Saline
Water Conversion Corporation and intensifying programs that detect
visible and invisible leaks.
And the issue of leaks is a major challenge the company had to
deal with when frst appointed. Discussing insuffcient and poorly-
maintained infrastructure Roberto Bianchi, general manager of the
Jeddah City Business Unit at the National Water Company, says that
the network still experiences 40% water losses and previously, two
thirds of the population were not connected to the sewer network.
Facing such challenges, I wish to know more about the politically
sensitive subject of tariffs, how much NWP is charging for water and
whether an increase is on the cards to help fund new infrastructure?
In answer, currently a low rate - the equivalent of two pence per
cubic metre - is being charged for water. NWP says a request was
put to the Supreme Judicial Council to consider raising the tariff, but
it was rejected at the time. However, plans are in place to revise tariff
structure over the next two to three years. Also, as part of a water
renewal and maintenance programme, the organisation plans to roll
out between 10,000 and 12,000 meters a month.
CURRENT CONTRACTS
It was in 2008 that Frances Suez and Middle Eastern company
Acwa Power signed a seven-year, joint venture public-private part-
nership (PPP) to upgrade and modernise Jeddahs water and waste-
water services. Set to close in 2015, Bianchi says there has been a
signifcant improvement to customers, without the need for a tariff
increase. Discussing contract successes, Bianchi says that the PPP
model works well and there has been no confict to date between
NWC and private operators. Furthermore, Saur secured the SAR12
million 12-month contract back in 2009, to provide technical assis-
tance to the Mecca Water Directorate between August 2009 and
July 2010.
WASTEWATER AND JEDDAHS SEWAGE LAKE
While a wastewater revolution may be expected over the next 20
years, there is certainly signs that progress is slow. Despite such
hesitancy, NWC highlights the King Abdulaziz International airport
contract, which includes a tender for wastewater treatment. Reports
suggest the second phase of this sewage treatment plant will help
to increase capacity by 250,000 cubic metres a day. The airport 1
contract may well be going ahead, but it is the speed of accelerating
delayed and struggling projects that the company says it is improv-
ing.
In an address to the Prince of Meccas region Khalid Al-Faisal,
the CEO of NWC, Loay Al-Mussallam, recently said that the frm has
implemented a plan to accelerate struggling projects. This, he said,
resulted in a decrease in the number of delayed projects to fve in
Jeddah during 2010, which compares to 15 in 2008.
On the subject of wastewater, it is diffcult to be in Jeddah talk-
ing about the topic without mentioning the infamous sewage lake.
A quick internet search on the topic of Jeddahs Musk Lake brings
up several alarming headlines from the past. Archived copies of the
Saudi Gazette and Arabian Business dated two years ago throw up
headlines of Jeddah sewage lake at dangerous level and Fears
For Info. http://wwi.hotims.com RS# 11
Supply and demand: the UK T&I delegation meets NWCs Jeddah team
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____________
Regional Spotlight: Middle East & Africa
20
March/April | 2011 www.wwinternational.com
sewage lake may food Jeddah, respectively. However, the period of
two years is a long when it comes to wastewater clean up projects.
At the end of 2010 it was announced that, through a SAR1 million
contract awarded to environmental consultants CH2M Hill, the lake
was emptied of its content in the space of only three months. The
project saw the evacuation of the lake water, removal of the dam and
removal of sludge deposited in the lake.
Such an operation followed a warning from the Ministry of Water
& Electricity over the lake, which at one stage contained around eight
million cubic metres. An on-site treatment plant, with a capacity of
60,000m
3
/day, now processes wastewater in a three-stage process.
WATER TRAINING ACADEMY
The Jeddah lake behind them, clearly change is afoot at the National
Water Company. What will surely be music to the international wa-
ter industrys ears, NWC says it will be investing around SR5 billion
over the next ten years through the expansion of the sale of treated
water. This will be done via agreement signings and MOUs to supply
390,000 cubic metres per day.
Tenders are being pushed through and the expected wastewater
revolution could well take place. With such a momentous task ahead,
it does raise the question of whether the country will have the neces-
sary skilled and qualifed work-
force to operate and maintain
facilities?
In light of this, NWP says it
will be helping to build a water
training academy in Jeddah,
worth an estimated SR150
million. Suez, Veolia and Agbar
Water have reportedly shown
an interest and the water tech-
nology academy would be
in association with the King
Abdullah University of Science and Technology (KAUST). It will be
interesting to see if such a development will help the country achieve
the goal of becoming to the Middle East what Singapore is to Asia - a
global water hub.
DAMMAN AND CLEANING UP BLACK GOLD
The arrival to Damman and journey to Al Khobar from the airport
couldnt be more of a contrast to Jeddah. Instead of King Fahds
Fountain shooting water over 300 metres above the Red Sea, the
view changes to a vast, endless desert with oil tankers and lorries
crossing the dwarfed roads.
Damman is home of global oil giant, Saudi Aramco. As the frm
has signed international partnerships with Siemens Water Company
and the Dow Chemical Company, not to mention the opportunities
that exist for the vast quantities of water wasted in the extraction of
oil, the group is keen to hear more.
As the largest oil producer worldwide, the frm currently produces
eight million barrels per day but has the capacity to produce 12.5
million barrels a day.
Ramzi Hejazi, engineering consultant in the Environmental Pro-
tection Department says it was in 1938 when the Kingdoms frst
commercial oil feld was discovered, at Dharan, before crude oil was
exported by barge to Bahrain. Following this, it was in 1963 when
Aramco issued its frst policy statement on environmental protection.
This was revolutionary at the time, Hejazi says, as the concept of
environmental protection was unheard of.
After the Saudi
government acquired
100% participation
interest in Aramco in
1980, purchasing all of
the companys assets,
an Environmental Pro-
tection Department was
created in 1998. It was
ten years ago, in 2001,
when an environmen-
tal Master Plan was
launched by the frm,
backed to the tune of
several million dollars.
The aim, according to
the engineering con-
sultant, was to bring all
Aramco facilities into
compliance with cur-
rent regulations. Total
investment will reach $7
billion, with the plan set
for completion by 2015.
Desalination, as with
the majority of Middle
Eastern countries, may
well supply the lions
share of water in Saudi
Arabia, but over 600
wells still remain across
the Kingdom. The oil gi-
ant says that under its
protection programme,
water samples are
regularly collected from
more than 400 ground-
water monitoring wells
to detect the impact on
groundwater.
Were interested in
outsourcing groundwa-
ter monitoring and need
support for occupation-
al monitoring, as well as
water monitoring. This
is a message we want
conveyed to the rest
of the global industry,
says Hejazi.
GROWING THE
SAUDI ECONOMY
We have had numerous companies approaching Aramco from the
Gulf but we would prefer companies to open offces in Saudi Arabia,
the consultant adds. We also want to help younger population be-
come more educated, so companies should hire local staff.
The environmental consultant cites past examples where com-
panies have set up shop in the country, carried out business, and
left. We are not interested in this approach, he warns. Quoting the
Partnership profiles
Halfway through 2010 saw Aramco Overseas
Company, a subsidiary of Saudi Aramco, sign
a licensing agreement for commercialisation
of the EcoRight membrane bioreactor (MBR)
with Siemens Water Technologies. Combin-
ing three technologies into a single wastewa-
ter treatment step, the system will treat efflu-
ent to meet strict wastewater discharge limits,
to be reused, or fed directly to reverse osmo-
sis equipment for reuse, boiler feed or cool-
ing water.
Currently under technical evaluation, it is hoped
the system will be made commercially avail-
able during the middle of this year, according to
Tom Schultz, oil and gas marketing manager for
Siemens Water Technologies. He later tells Wa-
ter & Wastewater International: Despite having
some issues with installing the demonstration
unit, which have resulted in minor delays, ev-
erything is operating correctly and going as an-
ticipated. We are in the process of testing and
so far have obtained the anticipated results.
On the issue of membrane biofouling, a raised
concern with such technologies, Schultz says:
We havent had any fouling issues or antici-
pate any fouling issues. The key to preventing
fouling in the membrane is to make sure youve
got the pre-treatment correct. Using Granular
Activated Carbon (GAC) were able to remove
components which might contribute to fouling
ahead of the membrane.
On the subject of discharge requirements, he
adds: Saudi Arabias regulatory requirements
are right in line with other countries. The issue
in the country is the sustainability of water re-
sources. You have a lot of facilities generating
a low TDS (Total Dissolved Solids) wastewater
which, if you can remove the other pollutants,
is very suitable for reuse. Many facilities run
on desalinated water, so once youve got all of
the salt out of the water, it would be better to
reuse it.
Meanwhile, a long-standing petrochemical joint
venture between Saudi Aramco and the Dow
Chemical Company has seen the Jubail Indus-
trial City chosen as the planned site location for
the project. Initially announced five years ago,
the venture hopes to produce 1.8 million tons a
year of ethylene from naptha and ethane feed-
stock. Chlorine, polyvinyle chloride and other
products are also expected to be produced.
Saudi Aramcos Environmental Protection Depart-
ment was created in 1998
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Siemens Water Technologies example (see box out), he says the
company came backing an environment outreach programme and
donated 10,000 backpacks made of environmentally friendly materi-
als to local schools.
RIYADH AND DEVELOPMENT OF A WATER REGULATOR
Arriving at the National Water Companys headquarters in Saudi
Arabias capital city, Riyadh, the issue of non-revenue water (NRW)
is a key topic discussed.
The country is currently facing big challenges with non-revenue
water and intermittent supply, says Michael Webb, senior consul-
tant for corporate projects. The system is not pressurised entirely,
which brings its own challenges.
Back in Jeddah the delegation heard that the company was ex-
periencing a water loss/leakage rate of 40%. However, any compa-
nies interested in lending services to help reduce such a fgure are
encouraged to negotiate the pre-qualifcation process.
The selection of suppliers and contractors to provide services
is crucial, he stresses. Pre-qualifcation is a big issue to us and
we will not be treating the process lightly...business has to proceed
so currently it is being done by existing pre-qualifed companies.
Webb adds: Part of the aim as well as providing water, is gen-
erating revenue. The plan is to expand the application of treated
sewage effuent (TSE) - the highest application for this product to
date is agriculture.
While NWC was created in 2008 to take responsibility for water
services across major cities in Saudi Arabia, there remains a gap -
and need - for an organisation to act as the regulator. Think Ofwat in
the UK. But according to NWC, this could all be changing.
Just like the Electricity & Co-generation Regulatory Authority
(ECRA) regulates the electricity industry in Saudi Arabia, a similar
organisation for water is on the cards for the future. NWC says that
a new water regulator agency will be developed over the next three
years, and the company will be working with the ministries to sup-
port its roll out.
THE MIDDLE EASTS FINANCIAL POWERHOUSE
A mere 30 minute drive from Saudi across the causeway and you
reach another country that couldnt be any different. While one of
the smallest countries in the
Gulf, Bahrain has held the
acculade of possessing one
of the strongest fnancial
services sectors in the Arab
World.
The recent political
events - two weeks of Shia
protests against the Sunni-
led regime, forcing a cabinet
reshuffe - should not tarnish
the countrys economic performance in the past.
In 2009, the fnancial services sector made up 27% of the na-
tions GDP, with manufacturing following closely behind with 16%
and real estate and telecom and transport 10% and 9%, respec-
For Info. http://wwi.hotims.com RS# 10
Regional Spotlight: Middle East & Africa
21
March/April | 2011 www.wwinternational.com
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Regional Spotlight: Middle East & Africa
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tively. Oil may well have been discovered in the Middle East in Bah-
rain in 1932, but it only accounted for 13% of the countries GDP
in 2009.
An inevitable population boom, along with economic develop-
ment from 2005-08 boosted demand for water and wastewater
services. According to UK T&I, today 30% of Bahrains sewerage
network is in need of replacement, and underground water is in-
fltrating into the sewerage network in 50% of areas, resulting in
fooding and environmental damage. However, also just like Saudi
across the causeway, change is on the horizon.
One of the aims of the government is to increase the propor-
tion of the population connected to the sewerage network. Fur-
thermore, a sanitary drainage project from the National Oil and Gas
Authority, to the tune of US$150 million, is set for completion by the
end of 2012.
In Bahrain, water recycling and sewerage treatment is under the
remit of the Ministry of Works, whereas water production is con-
trolled by the Electricity & Water Authority (EWA). Around 150 million
gallons (567,000 m
3
) of water per day makes up the total water
supply, with 90% generated from desalination and the remaining
10% from groundwater. The following fve facilities make up water
supply:
- Al-Hidd Power Company
- Sitra Power and Water Station
- Ras Abu Jarjur RO Desalination Plant
- Addur SWRO Desalination Plant
- ALBA Desalination (Aluminium Bahrain).
According to Dr Abdulmajeed Ali Alawadhi, chief executive of
EWA, leakage levels are currently at 18%. A two-year target, over
the course of 2011 to 2012, is to reduce this fgure down to 12%.
The estimated cost of doing so is BHR10 million. Following this,
between 2013 and 2014, the authority hopes to reduce this fgure
from 12% to 10%.
We have a water shortage here - water is expensive to produce
and the tariff is low, so it is often overused, he says.
The high cost of water is currently highly subsidised in the coun-
try. In fact, 75% of the cost of water production is subsidised, leav-
ing consumers to only pay 25%. To help with these costs, BH21
million is provided every month from the Ministry of Finance. If the
tariff is increased, we should be able to the decrease the subsidy,
adds the chief executive.
On the subject of privatisation, Dr Alawadhi says: All of produc-
tion has been privatised...in the future we aim to award mainte-
nance contracts to the private sector. Whatever outsourcing can be
done, will, to leave the authority to continue with its core role. The
next step, we will be giving the private sector responsibility of col-
lecting bills - people need to understand how much of an important
area this is.
BAHRAINS WASTEWATER - BUILDING A FUTURE
Improvements may well be in place for drinking water supply but
it is also wastewater where vast improvements are planned.
It was actually back in 1977-1979 when the Ministry of Works
constructed its frst trunk sewers and main pumping station for
Manama, Muharraq and Isa Town. Following the completion of the
National Master Plan for Sanitary Engineering Services (NMPSES),
a Sanitary Engineering Services Restructuring Study is expected to
be completed by the end of this year.
One of the aims, according to Ebrahim Hassen Al-Hawaj, direc-
tor of sanitary engineering operation and maintenance, is for sani-
tary services to reach 95% of Bahrains population by 2020. An
aspiration is for this fgure to reach 100% by 2020.
To help reach these aims, a 100,000 m
3
/day wastewater treat-
ment plant and deep gravity sewer network are set to be located in
Muhharaq, in the north eastern area of Bahrain. The plant will have
the capacity to expand to 160,000 m
3
/day in the future. Interna-
tional interest in the project has been rife and 16 companies made
it to the pre-qualifed list. Companies included Suez Environment
(Degremont), Sembcorp Industries, Veolia Water and a joint venture
between the UKs United Utilities International, Samsung Engineer-
ing Company from South Korea and Invest AD Infrastructure Fund.
The latter has been awarded the preferred bidder status for the
BOO (Build, Own and Operate) project, after their low bid of $1.459
per cubic metre undercut the next lower bidder by $0.152 per cubic
metre, according to Meeds Middle East wastewater market report
for 2010.
At the time of writing, the Ministry of Works and Ministry of Fi-
nance confrmed that the consortium would deliver the project. All
three partners in the consortium are providing equity for the project,
with Samsung committing 45%, Invest AD 35% and United Utilities
20%.
The privatization of Muharraq Sewage Treatment Plant consists
of three major components. The frst component is the Sewage
Treatment Plant (STP), which is scheduled to be operational by
August 2013 and will be built on reclaimed land located north of
Hidd Industrial area. It will be developed in two phases with an initial
capacity of 100,000 m
3
/day and expandable to 160,000 m
3
/day in
phase 2, whenever required. This STP is planned to cater for the
increasing development surrounding Muharraq, to reduce consid-
erable overloads at Tubli STP and mitigate environmental pollution
with the high quality international TSE standard requirement.
The second component is the Sewer Conveyance System,
which includes the construction of a Deep Gravity Sewer (DGS)
Bahrains wastewater treatment plant in the industrial Sitra area
The wave of social and political unrest may have swept across the
Middle East with brute force, but demand for water will continue,
regardless of cabinet and ministerial reshuffles
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Regional Spotlight: Middle East & Africa
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March/April | 2011 www.wwinternational.com
network system - a 15km long development which the Ministry of
Works says will see micro-tunnelling technology used for the frst
time of this magnitude in sanitary sector. This DGS is due to be
completed by August 2013 and will have 80 years service life. Fi-
nally, the third component is the connection of the existing network
to the DGS trunk main, which will be constructed in stages and
completed by August 2014.
Bahrains other major wastewater treatment plant, Tubli, which
operates alongside the other plant in the industrial area of Sitra, is
being expanded to a capacity of 350,000 m
3
/day.
However, a decision from the Ministry of Works to upgrade and
improve the Tubli plant did not come as a surprise. As a result of
the previously mentioned population boom, the facility had to pro-
cess wastewater levels above its capacity. This resulted in deterio-
ration in the quality of fnal treated effuent, which impacted on the
ecological conditions when discharged into Tubli Bay. The Ministry
signed a Letter of Intent with Bluewater Bio last year to upgrade
the secondary treatment unit. The BD7.3 million project will see the
company providing biological treatment of 100,000 m
3
/day.
BAHRAIN TO SPEARHEAD WIND POWERED
DESALINATION MOVEMENT
Its not just wastewater where Bahrain is setting new ground for
the Middle East. A Memorandum of Understanding (MoU) signed
in early February between German company Synlift Systems and
Jade Consultancy could see wind powered desalination intro-
duced to Bahrain for the frst time.
The agreement will see the consultancy provide project man-
agement support on customizing the design concept of seawater
desalination powered by wind energy. Extensive laboratory stud-
ies simulating Gulf region conditions are said to have shown such
a concept is both technically and
commercially viable.
At the time, H.E. Dr. Hubert Lang,
ambassador of the Federal Republic
of Germany in the Kingdom of Bah-
rain, said: Since some years I have
been trying to promote the idea of
alternative and clean energy sources
in the Kingdom of Bahrain. We all
know by now that nuclear energy is
by far not the best solution and we absolutely must look for other
energy sources and resources.
Nor is it just wastewater or desalination attracting all of the atten-
tion. Like Saudi Arabia, Bahrain also plans to revolutionise its storm
water drainage. During the groups time in Bahrain, the local press
reported that the country will be pumping BD12 million into a water
drainage project to cope with fash foods.
Expected to be implemented in 80 to 90 locations across the
country, the plan, according to Al-Hawaj, is to use aqueducts to
drain water from higher ground to the sea, using pumping stations.
FINAL THOUGHTS
The wave of social and political unrest may have swept across the
MIddle East with brutal force recently, with few leaders unlikely to
survive, but demand for water will continue, regardless of cabinet
and ministerial reshuffes. Expected population growth will ensure
this. Opportunities clearly remain for storm water, drinking water
and wastewater. The economic crisis may well have delayed ten-
ders, and subsequently privatisation plans, but it now looks like the
gears are in motion for development to carry on across Saudi Ara-
bia and Bahrain. As demonstrated by the Muhharraq wastewater
project recently signed in Bahrain, international collaborations are
becoming more frequent in a bid to strengthen offerings and tap
into these lucrative Middle Eastern markets. Its clear to see why. A
reported $15 billion dollars is due to be spent on wastewater treat-
ment up until 2015 across the GCC.
The well known phrase, when it rains, it pours couldnt have
been more apt during the delegations time across Saudi Arabia
and Bahrain. Lets hope the level of work and awarded contracts
from the visit will be equally fowing. WWi
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For Info. http://wwi.hotims.com RS# 12
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Regional Spotlight: Middle East/Africa
24
www.wwinternational.com February/March | 2011
24
www.wwinternational.com
T
he Middle East and North Africa (MENA) is the most wa-
ter scarce region of the world and in recent years the
amount of water available per person has declined dra-
matically.
Lebanon, in contrast to neighbouring countries to the
south and east, has adequate total water resources but at present
lacks a conveyance system
to deliver water to locations
where it is most needed.
Its capital, Beirut, currently
suffers a severe shortage of
water, a situation which was
foreseen before the civil war
in the 1970s.
Current potable water
demand in the main city
of Beirut area is estimated
at 780 million litres per
day (780,000 m
3
/day) for a
population of over two mil-
lion. In the driest month of
October, Beirut can experience a defcit of 368 MLD (368,000 m
3
/
day). As a result, water supply in many parts of Beirut is intermittent.
Furthermore, reliance on wells coupled with the effects of salinity in-
gress has resulted in many homes being supplied unpalatable water
along coastal areas.
AWALI- BEIRUT WATER CONVEYANCE PROJECT
The current major water supply source for Beirut is from Dbayeh in
the north. The Awali Beirut Water Conveyance Project was originally
envisaged in the 1950s to make use of abundant water resources
provided by the Litani and Awali Rivers in the south of Beirut.
The construction of the Qaraaoun Dam on the Litani River made
water available for irrigation, water supply and hydroelectric power
generation. In practice, only the last of these uses has come to frui-
tion so far.
A series of tunnels takes water from the Qaraaoun Dam through
the mountains to the Awali River via two hydroelectric power (HEP)
stations. A fnal tunnel conveys water from both the rivers to a third
HEP station, which discharges back into the Awali River. A Govern-
ment Decree was issued in 1970 for the diversion of water from the
fnal stage of the HEP system to supplement the existing water sup-
plies in Beirut.
The objective of the Awali Beirut scheme is to provide a secure
and safe water supply from southern Lebanon to the developing ur-
ban areas of Beirut. The scheme includes treatment and transmis-
sion of 520 MLD (52,000 m
3
/day) water in two phases with the pos-
sibility of expansion to 780 MLD (78,000 m
3
/day). Phase I will treat
and transmit only 260 MLD (260,000 m
3
/day), which will go some
way in meeting the current defcit. Essential components of the se-
lected scheme are:
Abstraction of water from the existing HEP tunnel at Joun (south
of Beirut) and delivery to the treatment plant at Ouardaniye by 4
km long, 2800mm diameter tunnel
Treatment to accepted potable water standards at Ouardaniye
Transmission of treated water from Ouardaniye to the Khalde by a
20km long, 2800mm diameter tunnel
Transmission of treated water from Khalde tunnel outlet to
number of new reservoirs located in South Beirut by transmis-
sion pipelines with total length of 30km, including diameters of
between 1000mm to 1400mm. The whole scheme is designed
under gravity fow by taking advantage of the available hydraulic
head between extraction and delivery points.
Engineering Lebanons Lifeline
The feasibility report update ensured the treatment facility will meet drinking water guidelines issued by WHO
The Awali-Beirut Water Conveyance project aims to provide secure and safe water supply
from southern Lebanon to the developing urban areas of Beirut. Sudhir Kumar, technical
leader of the project, discusses latest developments of the tunnel development, including
key considerations such as exposure to seismic activity and security concerns.
Project Details
The Council of Development and Reconstruction
(CDR) has engaged MWH to update the feasi-
bility study of Awali-Beirut Water Conveyance
project, which was carried out in 1994, and to
prepare tender documents. The main focus of
the feasibility study update is to analyse the
differences between the situation in 1994 and
at present. This is also to review the option
of water conveyance through tunnels, which
were identified in the 1994 study as the pre-
ferred option.
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Regional Spotlight: Middle East/Africa
25
www.wwinternational.com February/March | 2011
Project Component
Estimated Cost, Million USD
Tunnel Option Coastal Pipe Option
Raw Water Tunnel 27.85 27.85
Quardaniyeh Water Treatment Works 54.60 54.60
Treated Water Tunnel/ Coastal Pipeline 119.70 171.40
Transmission Pipelines & reservoirs 90.10 90.10
Land Acquisition cost 53.50 117.40
Total Cost 345.75 461.35
FEASIBILITY STUDY OPTIONS
The abstraction and delivery points of the project are 40km apart with
highly varying topography characterised by hills and steep valleys.
Two feasible options - namely water tunnels and coastal pipelines
- were explored for the transmission of water from Joun to Khalde.
The coastal pipeline option shares a few critical technical chal-
lenges, including:
Security concerns as a result of an exposed rural pipeline, which
would be very vulnerable to tampering and intentional acts of
damage or foreign aggression
Exposure to damage from seismic activity because the pipe route
runs through a seismically active zone
High pressure of the pipelines (+25 bar rating requirement) due
to elevation differences could result in very severe consequences
if a pipe was to burst. Any failure in one pipe could damage the
adjacent pipe (of the twin pipes), causing complete cessation
of service. Pipe failure would also threaten local infrastructure,
including the coastal freeway and adjacent properties and en-
danger residents
Extensive expropriations and service corridor requirements par-
ticularly given strong urban development especially towards the
end of the pipe route
Major service crossing (bridges, underpass, culverts, utility pipe-
lines) issues along the pipe alignment, and aesthetic and envi-
ronmental implications due to the extensive construction through
rural and natural areas.
In light of the listed challenges, a tunnel option was deemed tech-
nically superior due to its low susceptibility to such raised concerns.
High pressure operation inherent in piped options, the vulnerability of
exposed infrastructure, nature of the locality and characteristics of
pipe materials were all taken into consideration.
Furthermore, tunnelling though the hills allows the shortest route
to the end point of the project. The tunnel also follows the hydraulic
grade line with less design constraints, with the exception of deep
valley crossings. Due to the minimum economical size of a tunnel,
the tunnelled option also provides additional capacity for any future
expansion, and some degree of storage within the tunnel space itself.
The scheme includes treatment and transmission of 520,000m
3
/day
For Info. http://wwi.hotims.com RS# 13
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Regional Spotlight: Middle East/Africa
26
www.wwinternational.com February/March | 2011
Most importantly, the tunnelled solution has a signifcantly smaller
surface disruption footprint.
The fnal and most compelling reason for selecting a tunnelled so-
lution was that all options, whether piped or tunnelled, require the
frst stretch of the conveyor from Joun to Ouardaniyeh be tunnelled in
order to access the Joun Adit.
Therefore by default, any solution selected will involve some tun-
nelling. A fnancial comparison of the two options shows that the
coastal pipeline option is 33% more expensive than the tunnel al-
ternative.
A detailed techno-economical analysis of these options suggest-
ed the tunnel option as the preferred one. The annual O&M cost for
the Phase I work of tunnel option is USD 5.96 million (year 2010)
which results in a treated water O&M rate of USD 0.06 per m. The f-
nancial analysis of the project suggested that the project is fnancially
viable at the cost and level of tariffs adopted and the project will pay
back at the end of the 13th year.
AWALI - BEIRUT WATER CONVEYANCE
PROJECT COMPONENTS
The Awali-Beirut scheme is divided into three contract packages.
Package one covers 2800mm internal diameter x 24 kilometres of
water tunnels. The frst phase of the 260 MLD (26,000 m
3
/day) wa-
ter treatment works will be covered in Package two, and fnally 30
kilometres of water pipelines and service reservoirs will be covered
in Package Three.
Package one - water tunnels
The main factors governing the excavation costs of a tunnel are
its diameter, length of the drive and the speed at which the Tunnel
Boring Machine (TBM) face can be advanced. The typical relation-
ship between costs and the tunnel diameter shows that the most
economical diameter is between three and fve metres.
Considering the common TBM availability and the construction is-
sues - removal of excavated material, service piping and in-situ tunnel
lining - a 2.8m internal diameter was selected for the project.
Such a selected diameter can hydraulically carry up to 780 MLD
(78,000 m
3
/day) of water, which is signifcantly higher than the Phase
1 & 2 requirement of total 520 MLD
(520,000 m
3
/day) and provides a
contingency for possible increased
water demand in future.
Soil strata to be penetrated
by the tunnels are Cenomanian-
Turonian limestones, dolomitic
limestones and dolomites. The
tunnel will be concrete lined by
in-situ construction method. Addi-
tional steel lining is provided along
the geologically weaker sections
of the tunnel alignment, or where
the depth of cover over tunnel is
inadequate.
Package two - water treatment
works
The location of the proposed
water treatment works at Ouar-
daniyeh has been selected con-
sidering the hydraulic advantage,
lower cost of land and an oppor-
tunity to include take offs to the coastal town along the tunnel route.
As part of the update to the 1994 feasibility report, the proposed
treatment process has been reevaluated. The major goal was to
assess its ability for fulflling the latest drinking water guidelines and
standards issued by the European Council and also the World Health
Organisation.
Variable raw water quality, as a result of seasonal changes, has
been taken into account to provide a process scheme capable of
treating two different raw water characters to the desired effuent
quality. The proposal will be constructed in two phases, each de-
signed for 260MLD (260,000 m
3
/day) capacity.
Package three - transmission pipelines and reservoirs
Approximately 30km of transmission pipelines with diameters
ranging from 1000mm to 1400mm are being proposed to transfer
treated water from the tunnel outlet portal at Khalde to the fve service
reservoirs at Hadath and Hazmeih, including a total capacity of 155
ML (155,000m
3
/day) capacity.
MWH has already prepared the tender documents for Package
one and two and the pre-qualifcation procedure for both the pack-
ages is expected to start in the frst quarter of year 2011. The project
is scheduled to be completed in three years. To help involve local
contractors, a procurement mode for the third package is being con-
sidered, as well as a conventional consultant design and contractor
build mode.
The company is waiting for CDR approval to proceed with detailed
design of this package. The latter has realised the importance of this
project and is working closely with the World Bank to fulfl the long
awaited dreams of residents in Beirut.
The project will be an example of how neighbouring nations facing
water shortages can work together and overcome substantial chal-
lenges to help deliver supply. WWi
Authors note: Sudhir Kumar is a principal civil engineer and en-
gineering group manager at MWH UK in Dubai and is working as
technical leader on the project.
Enquiry No. 112
Natural Ground Profle along Tunnel Alignment
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Regional Spotlight: Middle East & North Africa
27
February/March | 2011 www.wwinternational.com
P
ro-democracy protests in Jordan may not have escalat-
ed to Tunisia and Egypt levels over the last few weeks,
but the population is being vocal over rising global food
prices and unemployment levels. Reports at the end of
February showed that some 6,000 Jordanians took to
the streets of Amman. Calling for new elections and changes to the
law giving King Abdullah absolute power, the countrys population -
as seen across the region - wants change.
While the economic landscape in the country looks uncertain for
the months ahead, there remains one urgent historic demand which
wont be changed: the need for fresh water supplies. As one of the
fve most water poor countries in the world, the country has attracted
fnance to help bring its water and
wastewater infrastructure up to
scratch. It was in October of last year when the United States Millen-
nium Challenge Corporation (MCC) pledged to invest just over $275
million to improve water distribution and wastewater collection in the
northeast city of Zarqa in Jordan. The investment is set to beneft
three projects to improve water supply, wastewater collection and
treatment. A month later and the U.S. Agency for International De-
velopment (USAID) awarded AECOM a US$28 million, fve-year task
order in Amman for water reuse and environmental conservation.
This was part of the Water Reuse and Environmental Conservation
Project launched by USAID and the Jordanian Government. Aims of
Reuse Steps Up
in Water-Poor Jordan
Prior to the recent protests in Amman, USAID awarded a US$28
million, task order for a water reuse and environmental
conservation project in Jordan. Tom Freyberg speaks to senior
engineer George Harris about the project and challenges of
changing wastewater perceptions across the Middle East.
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28
February/March | 2011 www.wwinternational.com
the project include strengthening the governments ability to monitor
and regulate industrial water pollution, improve wastewater treatment
and public awareness of water reuse.
Water and Wastewater International (WWi) spoke to George
Harris (GH), senior engineer, water resources & environment offcer,
USAID, Jordan to fnd out more about the project.
WWi: The $28 million dollar project with AECOM is fo-
cussed on industrial water reuse. Why is industrial and not
municipal water the focus here?
GH: The simplest answer is that it adds industries to our ongo-
ing portfolio. Weve addressed water issues in municipalities and
through our eco-
nomic develop-
ment department.
The industrial sec-
tor is a huge water
user and many
countries in Middle
East struggle with
industrial water
demand. Jordan
has created the
industrial zones,
which are special zones to locate and consolidate industry to help
deal with problems more effectively. Aims of the partnership are to
look at water demand and the potential for reuse, along with political
and regulatory challenges.
WWi: How is USAID working with Jordans government to
introduce and enforce regulations?
GH: In collaboration with the Ministry of the Environment weve
actually engaged the U.S. Environmental Protection Agency (EPA)
to help with the enforcement of issues. The government has cre-
ated a group called Environmental Rangers, who act in the envi-
ronmental police type role. Weve had EPA participation on training
the new teams. This includes addressing what they should be look-
ing for, reviewing the existing laws and fnding out if theres room for
improvement and how the judicial process should treat problems or
violations.
WWi: Environmental Rangers? Interesting. How are they and
new levels of regulation being perceived by the Jordanian in-
dustries?
GH: Its a relatively new approach and were too early in the
game to make any kind of real assessment. Theres always a certain
amount of push-back, especially when a certain amount of environ-
mental compliance is involved at a cost to the industry. Weve seen
some initial co-operation but its still early in the programme.
WWi: Once reused, which industries will the water beneft?
GH: The reuse aspect of the new contract is broad, its general
and not confned to just the industry. Weve had a couple of dem-
onstration projects in the past - pilot studies on reuse that were suc-
cessful. One in Wadi Mousa, in Southern Jordan where the water
reuse was agricultural and one in Aqaba, where the water reuse was
industrial. Those have been very successful. Theres an interesting
aspect here in terms of what I would call indirect reuse.
We aid-supported a project to upgrade the AsSamra wastewater
treatment plant that treated water from Zarqa and Amman. That plant
discharges into the Zarqa river, which fows to the King Talal Dam
reservoir, which feeds the King Abdullah Canal in the Jordan Valley.
Most of that water ends up being used agriculturally.
The water is of course being blended with other waters but a
large percentage of it is basically the plant effuent from the As-Samra
wastewater plant.
WWi: I see that USAID supported the Zara Main desalina-
tion plant, which supplies 30% of Ammans water. The end of
last year saw Jordanian minister of state for mega projects,
Imad Fakhoury, invite companies to bid on a contract for the
Red Sea desalination project. Costing $10 billion and set to
produce 200 million cubic metres of water per year, how will
this ft in with the reuse schemes and your conservation proj-
ect? Is such a large scale desalination plant the way forward
for the country?
GH: I would support desalination in the concept but not neces-
sarily endorsement of the projects being rolled out right now. If the
population of Jordan is going to continue to grow and they need
fresh water, then unless theres a major climate change with regards
to water, then I dont see any other source for the water. Water ef-
fciency improvements, reuse, conservation - these are just going to
Project Profile
Duration: 2010-2015
Total Funding: $28 million
Focus: Industrial water reuse
Beneficiaries: Jordanian industries, farmers, general population
Geographic coverage: Nationwide
Regional Spotlight: Middle East & North Africa
Jordans Disi water conveyance project involves a 325-
km pipeline being built through the Jordanian desert to
Abu Alanda and Dabuk reservoirs
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Regional Spotlight: Middle East & North Africa
29
February/March | 2011 www.wwinternational.com
be natural parts of the pro-
gramme. Desalination of
water between treatment
and delivery is going to be
expensive and the country
needs to be become re-
ally effcient in the use of
their water to minimise the
costs.
WWi: To help with overall water supply effciency, should
the current issue of illegal private wells - exacerbating un-
sustainable groundwater extraction - be addressed more di-
rectly?
GH: Weve been involved in several water monitoring and evalua-
tion programmes over the years. Rather than focusing on the illegal
wells, its really the issue of the groundwater in total, how much is
being extracted and the condition of the aquifers and how to correct
that. Its a tough issue here. Its very political - most people agree that
they are over pumping and levels are dropping. Most of the donors
here have tried to tackle the problem and with marginal success to
date. Everybody agrees its a problem, but nobody wants to take the
next steps to solve it.
WWi: So what steps should be taken then?
GH: We need to reduce the withdrawal rate until aquifers stabilise
- this is a goal I think most people would agree with. How you do
that is the problem. Illegal wells get a lot of attention and if we could
eliminate these we would solve the problem. Another challenge is
fnding a way to monitor and control what is being pumped out of the
aquifer; legal or illegal wells.
WWi: Public-Private Partnerships are now gathering mo-
mentum in Jordan and could inevitably lead the way with the
Red Sea desalination project. Do you think the market is now
ready for such collaborations?
GH: Absolutely. The As-Samra wastewater plant I referred to ear-
lier, which is a BOT (builld-operate-transfer) contract in a 25-year con-
cession, has been considered
a success and is a form of a
PPP. USAID provided the
funding to give it a nudge and
ending up paying slightly less
than half the capital costs.
The facility is now produc-
ing a high quality effuent, as
well as the majority of its own
power, and serves as a good
example of PPP. For long
term sector sustainability and
affordability, it may be benef-
cial to see higher levels of involvement by Jordanians in future PPPs.
WWi
Enquiry No. 106
The As Samra Treatment Plant serves the Amman and Zarqa area
The treatment plant processes wastewater
equivalent of a population of two million people.
For Info. http://wwi.hotims.com RS# 16
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Regional Spotlight: : Middle East & Africa
30
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30
www.wwinternational.com
R
eforms have been made in North Africas water sector
by the regions government in a bid to adopt and pur-
sue private partnerships. Questions have been raised
whether the fate of such reforms have been jolted by
the fall of the Tunisian and Egyptian regimes, thrown
out of offce through a peoples revolution.
Ministers in charge of water, in the two countries, were dismissed
from offce in the January and February mass revolt, which saw Presi-
dent Hosni Mubarak and Ben Ali fall from power. This included Mr Al
Masry Al Youm of Egypt, who only weeks ago was appointed in place
of Mr Mohammed Nasr Eddin Allam, and also Tunisias Mr Abdes-
salem Mansou.
Interim leadership in the two countries have promised to issue
policy statements on key investment policies. These include public-
private partnerships that have promised to increase not only the
amount but also access to safe drinking water and even more for
commercial use.
The political and social undercurrents that catalyzed the revolts in
Egypt and Tunsia are reminiscent of the regions struggle to quench
the rising demand for water through increased investment in seawa-
ter desalination and wastewater treatment.
The demand for water is being driven mainly by the growing popu-
lation, increased food production and an expanding industrial sector
that is fuelled by an appreciating economy in some of the countries
in the region.
Successful seawater desalination cases like those reported in Alge-
ria, though still facing huge challenges, have been underpinned by the
governments prior planning for the countrys water needs. Effcient de-
salination processes have been embraced, as well as increased private
sector participation and deliberate capacity building programmes, both
for consumers and public institutions in the water sector.
Seriously constrained natural water supplies in the region are forc-
ing North Africa to follow the Middle East and develop seawater and
brackish desalination programmes, according to a report by consul-
Desalinations Fate
Across a Troubled MENA
The 200,000 m
3
/day Mostaganem seawater desalination
plant in Algeria has been touted to be the biggest in Africa
Before the current period of civil unrest, the North African desalination market was looking
prime for expansion and investment. Latest reports from Reuters however suggest Hyfuxs
Libya projects could face delays as a result of the political uncertainty. Shem Oirere looks at
the impact of the protests in the region, as well as progress of the PPP law in Egypt.
Cairos
wastewater treatment
The 250,000m
3
/day New Cairo Wastewater Treatment Plant, jointly fi-
nanced by the International Finance Corporation (IFC), a member
of the World Bank, and the UKs Department for International De-
velopment, became the first water sector project to be established
under the PPP.
The facilitys construction contract was awarded to Orasqualia in June
2009 and managed to reach a financial close the first quarter of last
year (2010). The projects 20-year concession contract, valued at an
estimated $482 million, is a joint venture between Egypts Orascom
Construction Industries and Aqualia, a division of Spanish construc-
tion firm FCC. The concession includes engineering, procurement,
construction, operation and maintenance of the plant.
This transaction has opened up the market for international investors
who are now comfortable to work on PPP projects in Egypt, which
will help the country address its growing infrastructure needs by
harnessing the strength of the private sector, Moazzam Mekan,
IFC manager for the Middle East and North Africa, said in a brief-
ing on the project.
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For Info. http://wwi.hotims.com RS# 17
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__________________
Regional Spotlight: : Middle East & Africa
32
February/March | 2011 www.wwinternational.com
tants Frost & Sullivan. The report estimates that the Middle East and
North Africa (MENA) will expect investments of up to $15.5 billion
by 2013. As part of this investment the region is expected to add
2.7 million cubic meters of desalination capacity daily to meet the
expected demand for water.
NORTH AFRICAS WATER LIFELINE
The Nile River is frequently labeled as the lifeline of Egypt. Last year
an agreement that reestablished the rules on how the rivers waters
are shared understandably caused confict. The countrys leaders
shuddered at the prospect of Africas most populous nation having
its share diluted and plunging further into a paralyzing water shortage.
Our quota of the Nile water quota is 55.5 billion cubic meters
a year which was suffcient for Egypts 1959 population of 24 mil-
lion (but) today, the national population is stands at 80 million, said
Mohammed Nasr Eddin Allam, former, Water Resources and Irriga-
tion Minister after the fve Nile basin countries signed the Cooperative
Framework Agreement (CFA). This new deal aimed to pave the way
for equal distribution of the waters of 4,160 kilometer long Nile River.
At least 90% of the water consumed by the 80 million Egyptians
is from the Nile. Reality is dawning on the countrys leadership that
the other fve Nile basin states may soon, and on a grand scale, be
diverting the rivers water for irrigation, hydro power and industrial.
There is mounting anxiety on how to put in place alternative water
supply sources to cater for the anticipated shortfall.
A water shortfall is also expected to persist in Tunisia, Morocco,
Algerian and Libya because of an anticipated population growth, ur-
banization and a re-bounding economy that is fuelling dramatic in-
dustrial growth in the region.
Water is the major vulnerability in Middle East and North Africa, the
worlds driest region, where per capita water availability is predicted to
halve by 2050 (and the) vulnerability is compounded by a heavy con-
centration of population and economic activity in food-prone coastal
zones and by social and political tensions that resource scarcity could
heighten, says the World Banks Development Report for 2010.
WATER INFRASTRUCTURE AND PRIVATE INVESTMENT
A recent briefng by the Islamic Development Bank says the MENA
region needs to invest an estimated $200 million in water infrastruc-
ture to meet demand for water and sanitation services by 2020.
An issue for the water-thirsty North African countries to grapple
with is whether desalination can be adequately backed up requisite
fnancing, effcient technology and a legal framework.
At hand, however, for the water-thirsty North African countries
to grapple with, is whether desalination as an option for increasing
the regions water supply can be adequately backed up by requisite
fnancing, effcient technology and a legal framework.
COUNTRY
Desalination
capacity 2010
(m
3
/d)
Costs 2010
(US$)
Desalination
capacity 2016
(m
3
/d)
Costs 2016( US$)
Egypt 652,000
90million
1.5million 172million
Algeria 2.6million 261million 4.5million 374million
Libya 1.1million 93milllion 4.2million 351million
Morocco 83,000 10million 989,000 112million
Source: Frost &
Sullivan.
Desalination Market Growth projections North Africa 2010-2016
The 250,000 m3/day New Cairo Wastewater
Treatment Plant became the frst water sector
project to be established under the PPP
The countrys leaders shuddered at the prospect of Africas most
populous nation having its share dilluted and plunging further into a
paralyzing water shortage
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Egypt has taken the lead in mobilizing investments for the con-
struction of desalination and wastewater treatment plants following
the passage of a public private partnership (PPP) law in May 2010.
PPPs promise faster delivery of public infrastructure works, as
well as access to additional resources, says Mohammed Tarek, proj-
ect manager at the ministrys PPP Central Unit, which provides tech-
nical and advisory support for PPP transactions as well as ensuring
compliance with legislative framework.
With its construction and operating costs of desalination plants
set to rise to $394 million by 2016, according to the Desalination
Markets 2010 report, Egypt seems to be catching up with Algeria,
Libya, Tunisia and Morocco in prioritising desalination in tackling the
rising demand for water to satisfy domestic, agriculture and com-
mercial needs.
In Algeria, North Africas desalination market leader, the authorities
have embraced the heightened wave of desalination investments, as
the country targets to achieve a desalination capacity of 2 million m
3
/
day over the next few years.
The country with an estimated contracted desalination capacity
of 2.6 million m
3
/day, has had public-private partnership legislation in
place for almost 12 years, although the government still has control in
deciding which of the projects should be placed under a PPP.
The country, which according to the World Bank fgures, loses
close to 40% of its water through the distribution system, either
through technical losses or illegal connections, is engaged in grand
plans to partner with the private sector especially for the develop-
ment of desalination plants of Ain Salah, Bejaia, El Oued, Jijel and
Tindouf under the build-operate-transfer (BOT) arrangements.
By the end of this year, it is estimated that Algeria will have 13
seawater desalination plants fully constructed with a combined ca-
pacity of 2.26 million m
3
/day. Despite lacking a fully enacted law on
private investment in the water sector, Algeria continues to attract
leading international water sector infrastructure companies, such as
Singapores Hyfux and Spains Aqualia in the development of the
desalination plants.
Such companies can now be seen dominating desalination mar-
kets in North Africa with Aqualia getting involved in the construction
of the 200,000 m
3
/day Mostaganem seawater desalination plant in
Algeria, touted to be the biggest in Africa and also the 100,000 cubic
meters/day Cap Djinet plant.
THE PPP MODEL IN MOROCCO
Similar efforts have been seen in Morocco, which has partnered with
the International Finance Corporation (IFC) to develop a sustainable
PPP that will ensure both a fnancially and environmentally sustain-
able desalination investment programme. The country anticipates its
desalination market to grow to $191 million by 2016, a 288% in-
crease from the current capacity.
In fact, in December 2010 the IFC signed an agreement with Moroc-
cos ministry of economic and fnance to structure an effcient and inde-
pendent PPP department with a mandate to oversee public/private joint
partnership in the development of the countrys desalination market.
Morocco, which has a contracted desalination capacity of 85,159
m
3
/day, is due to spend spent approximately $112million over the
next fve years in operating new and existing desalination plants. Top-
ping the priority list of desalination projects is the Chtouka desalination
plant with an envisaged capacity of between 60-85 million m
3
/day.
The desalination and irrigation plant in Chtouka area will support
agriculture, an important industry in Morocco and help create jobs
for the surrounding communities, says Rashad Kaldany, IFC vice
president in charge of Middle East and North Africa region.
POLITICAL BACKING IN LIBYA
Libya will have an estimated 1.2 million m3/day of contracted desali-
nation capacity and has approved at least 11 sites for the construc-
tion of desalination plants. These include Benghazi, Misurata, Tobruk,
Tripoli and Zawia. Several international frms have expressed an in-
terest in developing desalination plants under the build-own-transfer
arrangement (BOT).
General Desalination Company (GDC), a government controlled
frm spearheading investment in the countrys desalination sector,
says Libya plans to increase its daily installed desalination capacity to
2.5 million cubic meters over the next 10 years.
Daewoo Motor Sales of South Korea, Impregilo Lidco of Italy, Hy-
fux of Singapore and PunjLloyd of India have sought for a share in
Libyas multi-billion dollar contracts for the construction of drinking
water and sewerage infrastructure.
Italys Eni signed a memorandum of understanding at the end of
2010 with the GDC for the El Agheli desalination plant. This followed
the advertisement for bids for the construction of the 100,000 m
3
/day
reverse osmosis (RO) Tobrouk desalination plant in the eastern coast
of Libya, which was awarded to Singapores Hyfux.
Even though this project is not as sizeable as some our other
projects, we are pleased with our increasing presence in North Africa
beyond Algeria, said Olivia Lum, the companys Group CEO when
signing the contract with Libyas Ministry of Utilities last November.
The race is on for the ultimate prize of becoming North Africas
water hub. From the statistics released by each of the regions
countries, Algeria and Egypt seem to have taken the lead, a clear
testimony that PPPs may have shown the way forward out of the
water shortages in Northern Africa. WWi
Enquiry No. 108
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Regional Spotlight: Middle East/Africa
34
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34
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I
t is estimated that globally, between 1990 and 2008, 1.8 bil-
lion people gained access to an improved drinking water sup-
ply (WHO/UNICEF 2010). Despite the gains, 884 million people
still do not use an improved source for drinking-water (i.e. pro-
tected spring, well, borehole or piped supply). Of the people not
using an improved drinking water supply, nearly 40% (327 million
people) live in sub-Saharan Africa.
At the current rate of progress the world is expected to meet
the Millennium Development Goal (MDG) target to halve, by 2015
the proportion of people without sustainable access to safe drink-
ing water. However, several countries are not on track to meet this
target, most of which are in sub-Saharan Africa.
An estimated 83% of the urban population in sub-Saharan Africa
use an improved drinking water supply, compared to only 47% of
the rural population. Much work remains to be done to enable ac-
cess to an improved water supply for over 270 million rural dwellers
in African.
GROUNDWATER SUPPLIES
Groundwater provides a high proportion of sub-Saharan Africas
population with a drinking water source. For example, groundwater
serves 64% and 57% of the rural population in Nigeria and Ethiopia,
respectively. Given its almost ubiquitous nature, generally excellent
natural quality, as well as relative cheap exploitation, groundwater
is likely to remain one of the main means of providing reliable water
supplies for much of sub-Saharan Africas population. A borehole
equipped with a hand pump is a well-established technology for
Drilling Deep
in Sub-Saharan Africa
Almost half the rural population in Sub-Saharan Africa still lack access to an improved
drinking water supply. Water wells continue to be drilled, but little data has been gathered
on groundwater sources in the region. Dr Kerstin Danert argues why a new Code of
Practice hopes to raise the professional standards of borehole drilling.
Nine Principles for
Cost-Effective Boreholes
Principle 1 Professional Drilling Enterprises and Consul-
tants: Construction of drilled water wells and supervision is under-
taken by professional and competent organisations which adhere to
national standards and are regulated by the public sector.
Principle 2 Siting - Appropriate siting practices are used.
Principle 3 Procurement - Procurement procedures ensure that
contracts are awarded to experienced and qualified consultants and
drilling contractors.
Principle 4 Construction Method - The construction method cho-
sen for the borehole is the most economical, considering the de-
sign and available techniques in-country. Drilling technology needs
to match the borehole design.
Principle 5 Design and Construction - The water well design is
cost-effective, designed to last for a lifespan of 20 to 50 years, and
based on the minimum specification to provide a borehole which is
fit for its intended purpose.
Principle 6 Contract Management, Supervision and Pay-
ment - Adequate arrangements are in place to ensure proper con-
tract management, supervision and timely payment of the drilling
contractor.
Principle 7 Data and Information - High quality hydrogeological
and borehole construction data for each well is collected in a standard
format and submitted to the relevant Government authority.
Principle 8 Database and Record Keeping - Storage of hydro-
geological data is undertaken by a central government institution with
records updated and information made freely available and used in
preparing subsequent drilling specifications.
Principle 9 Monitoring - Regular visits to completed boreholes are
made to monitor their functionality in the medium as well as long
term with the findings published.
Boreholes need to be appropriately specifed
and drilled using suitable equipment
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Regional Spotlight: Middle East/Africa
35
February/March | 2011 www.wwinternational.com
water supplies in the region and will continue to be so in the foresee-
able future, unless investments increase dramatically. However, the
challenge is that up to 60,000 boreholes per year will need to be
drilled in sub-Saharan Africa to meet the MDG targets.
Concerns have been raised about the high construction costs
and varying construction quality of boreholes in sub-Saharan Africa.
Causes for this include inadequate supervision, weak regulation,
poor contract management and a lack of apprecia-
tion of the realities of drilling by programme man-
agers (Danert, 2010). Furthermore, over the years
there has been relatively little attention paid to sys-
tematic information gathering about groundwater
resources (Adelana and Macdonald 2008).
Much more emphasis has been on drilling wa-
ter wells than on collecting data. In order to enable
groundwater supplies to fulfl their potential contri-
bution to the MDG targets and to universal access
in the future, there is an urgent need to build on the
strengths and address the weaknesses of borehole
drilling policies and practices in the region.
CODE OF PRACTICE FOR
COST-EFFECTIVE BOREHOLES
The term cost-effective, in this instance, means op-
timum value for money invested in the long-term, with
a borehole drilled to function over a lifespan of 20 to 50 years. Thus,
the lowest cost well is not always the most cost-effective, particularly
if construction quality is compromised to save money. Cheap drilling
or poor construction quality can lead to premature failure of the well
or contamination of the water supply. Boreholes that are subsequent-
ly abandoned by the users are clearly not cost-effective. In order for
boreholes (sometimes referred to as drilled water wells or tubewells)
Groundwater still remains one of the most reliable water sup-
plies in much of sub-Saharan Africa
For Info. http://wwi.hotims.com RS# 18
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Regional Spotlight: Middle East/Africa
36
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to be cost-effective they need to be appropriately
specifed, properly sited and drilled using suitable
methods and equipment. Where the private sec-
tor is used, competent procurement and contract
management procedures need to be followed. Drill-
ers, as well as supervisors, need to ensure adequate
construction quality.
COMPARING PRINCIPLES WITH REALITIES
Between 2005 and 2010, studies to examine poli-
cies, practices and capacity with respect to borehole
drilling have been undertaken in several countries,
including Burkina Faso, Ghana, Ethiopia, Nigeria,
Uganda and Zambia, with further work planned in
Sudan. These studies have highlighted that countries
are stronger in some areas and weaker in others.
For example, while registration and licensing of
drilling contractors has been ongoing for some time in Ethiopia and
Uganda, such a process has recently started in Burkina Faso and
Ghana.
It was not in place by 2009 in Zambia, where essentially any con-
tractor is able to drill in any location. Drillers associations, which can
play a key role in self-regulation, exist in Nigeria, Uganda and Burkina
Faso, but not in Zambia or Ghana. Arguably stakeholders in each
country have some positive experiences to share with others, as well
as aspects which they could beneft through learning from others in
the region. Whereas drilling contracts tend to be awarded in multiple-
borehole packages in Ghana, this is not always the case in Burkina
Faso or Zambia.
Meanwhile in Uganda, decentralisation has translated into very
small contract packages for drillers, thus signifcantly increasing the
cost of transportation. One of the weakest areas with respect to
borehole drilling in many of the countries analysed is contract man-
agement, supervision and payment.
It is increasingly common for governments to let out drilling con-
tracts to the private sector. Procurement practices usually use local
competitive bidding processes, often with a pre-qualifcation stage.
However, it is common for the implementation of drilling contracts to
be delayed.
Across the board, drilling supervision is often undertaken by
young and inexperienced graduates. Not only can they be outwitted
by drilling contractors, but it is common for supervisors to be reliant
on the contractors for logistician support. This, coupled with poor re-
muneration makes it diffcult to ensure construction quality. Therefore,
there is an urgent need to raise the capacity of drilling supervision
throughout the continent to provide a basis for water well longevity.
From the perspective of the driller, frequent delays in payment for
works completed are one of the numerous challenges of their busi-
ness environment, alongside diffculties in accessing credit and al-
legations of irregularities in tender processes.
EQUIPMENT SPECIFICATIONS
At a technical level, specifcations for drilling equipment are often
much higher than they need to be, particularly in the case of drill-
ing wells of shallow depths. Given the high pay back fees for heavy
drilling rigs, this directly impacts on cost. In some areas, hand drilled
or hand dug wells would offer solutions of considerably lower cost
but are not considered. Suitable well designs which are ft for the
intended purpose, rather than overdesigned ought to be considered.
There are arguments for constructing boreholes which can sub-
sequently be upgraded from a hand pump source to a submersible
pump with a small piped network.
However, the reality is that in rural areas in sub-Saharan Africa such
scheme expansions are very rarely made. Governments and NGOs
are busy trying to install new sources in order to outpace population
growth, and water users themselves are either not able, or not em-
powered to expand supplies.
In order to build up an in-depth understanding of groundwater
resources and hydrogeology, the collection and storage of borehole
construction data by the relevant authority is essential. This is an as-
pect of groundwater development which is particularly weak in many
countries.
In Burkina Faso, Ghana and Zambia, the requirements and re-
sponsibilities with respect to data are not always clear and borehole
logs are not always submitted to the authority. Given the lack of li-
censing for drillers in Ghana or Zambia there is little incentive for the
drillers to do this. While in Zambia there is a pilot project to enter
borehole completion data into a database, this is not the case in
Burkina Faso or Ghana.
Up to 60,000 boreholes per year will need to be drilled in sub-Saharan Africa to meet
the MDG targets
Wider Context
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37
February/March | 2011 www.wwinternational.com
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Ensuring that the Code of Practice is turned into action on the ground
requires full engagement of key funding agencies for rural water supplies
and implementing organisations. Agencies such as the World Bank, the
African Development Bank, bilateral donors, international NGOs, as well as
national governments and the private sector in sub-Saharan Africa should
stock of how they support and implement drilling programmes.
Ultimately procedures that bring about cost-effective boreholes should
be set out and adhered. In order to achieve this there is a need for long-
term investment to raise the capacity of the institutions and individuals in-
volved. Ensuring that drilled water wells are cost-effective over the long
term - is something that rural dwellers in Africa can expect from the organi-
sations who try to improve access to water supplies. WWi
REFERENCES
[1] Adelana S and Macdonald A (2008) Groundwater research issues in
Africa, in Adelana S and MacDonald A (Eds) (2008) Applied Groundwater
Studies in Africa, International Association of Hydrogeologists, CRC Press.
[2] Danert K, Carter, RC, Adekile, D and MacDonald A (2010) Cost-effective
boreholes in sub-Saharan in Africa in Yongxin X and Braune E (Eds) (2010)
Sustainable Groundwater Resources in Africa, UNESCO International Hy-
drological Programme, CRC Press ISBN 978-0-415-45273-1
[3] WHO/UNICEF (2010) Progress on Sanitation and Drinking Water 2010
Update, World Health Organisation/UNICEF. Available on the World Wide
Web: http://www.wssinfo.org/
[4] RWSN (2010). Code of Practice for Cost-Effective Boreholes, Rural Wa-
ter Supply Network. Available from www.rwsn.ch
Authors note: Dr Kertin Danert is coordinator for cost-Effective Bore-
holes and task manager at the Rural Water Supply Network (RWSN), a
global knowledge for rural water supply technologies and approaches.
The Code of Practice for Cost Effective Boreholes was produced after fve
years of research, documentation and refection by the Rural Supply Net-
work (RWSN). For more information, please email: kerstin.danert@skat.ch.
Enquiry No. 103
Cheap drilling or poor construction quality can lead to premature failure of the well or
contamination of the water supply
For Info. http://wwi.hotims.com RS# 19
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38
www.wwinternational.com
Public-Private Partnerships
February/March | 2011
38
www.wwinternational.com
P
PP projects, the often-complex contracts between a
public-sector authority and a private consortium, have
gained ground globally. The arrangement has become
a way of providing substantial public services or projects
for which governments or local authorities cannot or do
not wish to bear the entire fnancial, technical or operational risk.
The division of fnancing and risk depends on the type of contract,
though such projects are generally characterized by substantial capi-
tal input on the part of the private partner. Contracts usually provide
for agreed services to be delivered. Examples include a given amount
and quality of water or wastewater treated and discharged for an
agreed price and often include a range of other performance criteria
unique to each project.
The form of project can also vary considerably the facility con-
structed may return to the client at the end of the project, it may
be transferred to the private partner, or reallocated to the same or
another consortium under a further operational contract. The public
partner often provides guarantees or subsidies to ensure the project
is attractive to the private sector.
There have been notable and well-publicised failures of this type
of partnership, and the politics and relationships between the various
partners and their perceived performance have often proved crucial.
The nature of the types of projects often signifcant critical infra-
structure inevitably lends a political aspect that can create pitfalls
for the unwary.
FLEXIBILITY IN THE MIDDLE EAST
However, when these types of project succeed, they work extremely
well as some very high-profle examples prove. Take the As Samra
wastewater treatment plant (WWTP) in Jordan, which is a 25-year
build-operate-transfer (BOT) agreement.
The BOT is for fnancing, building and operating the biggest
WWTP in Jordan. The plant serves 2.2 million people in Amman and
other cities, about 40% of Jordans population, says Hassan Abdal-
lah, the general manager.
Treated wastewater produced is fully re-used for irrigation, and
represents around 10% of Jordans total water resource, which gives
an indication of its strategic importance.
The client is the government of Jordan, which is represented by
the countrys Ministry of Water and Irrigation. Thats our daily link,
Abdallah explains. It is considered a national project.
Degrmont, a Suez Environnement subsidiary, is partnered by
CCC Group on the project, one of the biggest M&E contractors in
the Middle East, via Morgani, a US-based affliate. The project agree-
ment was signed in December 2003, with construction beginning
immediately on the plant.
The plant was the frst BOT in Jordan, and the frst fnanced by a
Jordanian bank, Abdallah explains. This $60 million loan was aug-
mented by a $105 million USAID contribution to the government of
Jordan (see page 27). The plant not only produces wastewater to a
standard higher than WHO guidelines and Jordans own standards,
but treats the resultant sludge to a high level and has a sophisticated
odour control system.
PPPs often have complex interrelationships between the parties
and the elements of the project and this one are no exception. Degr-
mont has three roles frstly as an investor in the project, with 10%
of the total investment in the project for the consortium, some $17
million (Suez Environnement and Degrmont and Morganti).
The companys second role was as leader of the PPP consortium
PPPerfect or Problematic?
Despite well publicised issues, public-private partnerships are now growing in demand
and fexibility to meet varying public sector demands. Lis Steadman speaks to major
players Veolia Water and Suez Environnment to see how a variety of such projects are
developing internationally, including across the Middle East, Australia and the U.S.
The As Samra wastewater treatment plant in Jordan serves 2.2 million
people in Amman and other cities, about 40% of Jordans population
There have been notable and well-publicised failures of this type of
partnership and the politics and relationships between the various
partners have often proved crucial
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Clients and markets are increasingly demanding, new
regulations are to be followed; for this reason each new
project becomes a new opportunity, a new technical challen-
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Public-Private Partnerships
during construction, a role shared equally with CCC Group. The third
and fnal role is as operator, again with the CCC Group Degrmont
has 51% of the operating element, which has a further 20 years to run.
A BOT is a specifc type of PPP, in which the private partners pro-
vide the management of the fnancing, then build and operate the
system for a number of years. After this it is handed back to the client,
in this case the Jordanian government. The private sector ensures
this, so we design, fnance, build and operate for a number of years,
and afterwards the asset is handed back to the government.
The As Samra project also benefted from USAID funding, which
was given to the Jordanian government and helped to make the proj-
ect more feasible and the tariff more affordable. The international to
local staff ratio should be noted. Initially there were few local staff but
now, three years into the operational phase, there are only two expa-
triate staff out of 170 employees. The team does however also have
the beneft of backup from Degrmonts experts if needed, he notes,
to enable optimal solutions and options to be chosen.
Because the contract shares risks and rewards, there was an in-
centive on both sides to fnd the optimum affordable treatment op-
tions. The result is fully-integrated energy recovery that generates
98% of the sites electricity requirements from both the digester sys-
tem biogas and unusually hydropower from the inlet and outlet
streams, which is possible because of the sloping terrain. This, and
other moves such as minimization of chemical usage, has enabled
an extremely competitive treatment tariff.
PUBLIC SECTOR COMMITMENT
Joubrane Ouechec, the senior executive vice president of CEMME-
near East (the Central Europe Mediterranean Middle East Business
Unit of Suez Environnement) explains that the companys approach
is to look for a very high level of involvement and commitment on the
part of the public sector authority.
He notes: When managing a public sector project they should
have signifcant involvement throughout.
The company is and has been involved in different types of PPP in
different contexts: for instance, operation and maintenance contracts
where the consumer fees would not cover the capital costs. This in-
cludes BOTs like As Samra, where there is a requirement for sustain-
able improvements, mainly for high CAPEX infrastructure projects. In
lease contracts he observes that in the French affermage, the utility
must generate enough revenue through water and wastewater bills
to cover CAPEX and OPEX costs.
The objective is to consolidate the partnership with the govern-
ment and authorities, he explains, and to generate trust for the future.
The frm is already a serious partner of the Jordanian government.
He stresses that there must be long-term benefts for both parties.
The beneft for the country is the experience of the private sector
we dont come alone, we come with expertise in fnancing methods,
PPPs in other countries, reuse, energy consumption optimization
and high level of energy recovery, operations and maintenance and
experience in how to be sustainable overall.
The ability of the private sector to provide engineering optimiza-
tion allows long-run cost reductions in operations. In the end, in the
water sector, these issues are social and ultimately a political issue,
he adds, noting: We never interfere with the tariff build-up we allow
the public sector to feel comfortable controlling these issues.
www.cepex.com
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Public-Private Partnerships
Sometimes groundbreaking PPPs As Samra was the frst in Jor-
dan require special laws as well. For As Samra there was a special
decree by the government to cover the provision contract, Ouechec
notes. He believes the region is realising the benefts of PPPs, and
this decree helped put the project on the ground fast rather than wait
months or years for global PPP laws to be implemented. This was
very benefcial to Jordan.
Suez Environnement is also in the prequalifying stage for the Jor-
dan Red Sea project, which will create a new type of partnership. The
idea is to concentrate on selecting a partner the bidders will not have
to submit a tariff for the cubic metres per hour but a fle of proposals
and innovations that will allow the public sector to select a partner,
then go together for fnance and phasing of the scope of works. He
says such a new type of partnership is one the frm fnds interesting.
PPPS DOWN UNDER
The preliminary aspects of PPPs are also fascinating. Bndicte Colin
is the General Counsel for Suez Environnement/Degrmonts Mel-
bourne desalination project. Degrmont and Suez Environnement
are part of the winning Aquasure Consortium, with Australian con-
struction company Thiess and fnanciers Macquarie Group. Design
and construction of the plant is planned for completion by December
2011 via a Thiess-Degrmont joint-venture, with subsequent opera-
tion through a Dgremont-Thiess Services joint-venture.
Colin notes that the state of Victoria has a strong culture of PPPs
this is the 19th or 20th project under this model since 2000.
She explains that the well balanced consortiums inclusion of a
prominent fnancial adviser has been critical we were fnancing the
project at one of the worst times, in the global crisis.
The project was awarded in July 2009 but in reality work began
more than a year before. It was a very competitive process the key
element in Victorias partnership policy is a very competitive partner-
ing process, she adds.
This involved a two to the wire process in which two consortia were
chosen from the original shortlist, with both parties producing a pre-
liminary bid in March 2009 and a second best and fnal bid that June.
Both bidders had to provide fully-documented bids and demon-
strate their assets covered the whole life of the projects and beyond.
The state had to the option to take either consortium.
It was very competitive we had to be very reactive. From the
time of the frst bid to the award there was a whole process of meet-
ings with the state, and we were given the opportunity to adjust the
bid and achieve the best project profle for the state and for the entity,
adds the General Counsel.
Both bidders had to demonstrate that their assets covered the
whole of the life of the projects and beyond, because the intention
was that they be handed back to the state, she adds.
Within the overall contract, there are two separate joint ventures
a 65:35 Thiess-Degrmont construction phase element, when
Thiesss construction expertise prevails, and a 60:40 Degrmont-
Thiess operational phase, when Degrmonts operational expertise
dominates. Both parties do, however, have input to both elements
of the contract.
As the contract was awarded for a unifed 30-year construct-
operate period following a severe drought in Victoria, there was also
a signifcant incentive to complete construction effciently and maxi-
mize the operational phase. Thus, a target 28 month construction
phase was set, which Colin observes is very challenging because
the contract has to produce water by the end of this year. This is
followed by a six month reliability testing phase.
A ROBUST MODEL?
The attraction of Victorian PPPs is that if a company is involved in
one, the framework is essentially the same for any other so it will be
a familiar process, she adds. She also notes that in the PPP it is not
just the private party that has obligations. The state of Victoria has
obligations too there are mutual obligations in the project deed,
which is the overall umbrella contractual framework.
She adds: Victoria really is one of the most sophisticated states
in terms of PPP contracts. It has a well known, demonstrated and
robust model.
Victoria also provided useful backup in obtaining fnancing in a
diffcult market, Colin adds. There was a stipulation that the bid had
to be fully fnanced. The consortium found two Australian banks pre-
pared to fnance the project, but only over the short-term. The State
stepped in to guarantee its help if syndication of the fnancing proved
The Melbourne desalination project was won by the Aquasure Consortium, comprising Degremont and Suez Envi-
ronnement, with Australian construction company Thiess and fnanciers Macquarie Group.
In the PPP it is not just the private party that has obligations
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impossible, and she notes that for lenders psychologically this helped us
to fnance over 100% of the deal. Syndication was completed less than
three months after fnancial close and was signifcantly oversubscribed,
after which the States syndication guarantee obligation fell away.
REGULATED BUSINESSES IN THE U.S.
In the U.S.s highly-competitive market, PPP contracts have to be both fex-
ible and imaginative as Veolia North America executive vice president and
chief municipal operations offcer Philip Ashcroft explains.
In the U.S., there are both regulated and unregulated businesses
there are a lot of regulated businesses but the PPP model is certainly
growing. It came out of contract operations, but is moving beyond that to
adding value for the client through different models such as asset man-
agement, he says, before adding: There is a particular focus on PPPs
for wastewater.
For some reason municipalities were more comfortable with con-
tracting out wastewater, but that is changing, though it is still mainly
about running the plant.
The PPP model used is becoming increasingly fexible, as demonstrat-
ed by a recently-won Veolia contract in Buffalo, New York. Here, the util-
ity workers remain employees of the city, with a Veolia management team
managing them through the city supervisors. It suits Buffalo and a number
of other municipalities, Ashcroft observes.
LARGE SCALE DBO
Veolias Tampa Bay contract in Florida is the biggest DBO in the U.S..
The original contract went so well that a second phase, doubling the
original 66 MGD (250,000m
3
/day approx.) capacity, has just gone op-
erational. Tampa Bay Water is the wholesaler, providing treated water to
the local region.
Executive VP of Communications Scott Edwards explains that Tampa
Bay Water was projecting a $200 million budget for the frst phase, but
the effciencies inherent in this approach meant the actual sum required
was $120 million. That is signifcant and not uncommon, he adds.
The company is also talking to utilities in water-short California, as
well as being involved in a project in Honolulu. The latter takes waste-
water from the clients wastewater treatment plant, and treats it to two
standards part of the fow is treated for irrigation, and the other to an
extremely high standard for use in a local refnery. In Oklahoma City, the
frm is recycling wastewater to be used to irrigate a local country clubs
grounds.
A Water Impact Index, trialled in Milwaukee, has also been launched.
This is a cradle-to-grave analysis of any production process, from the
direct and indirect impacts of water abstraction on the watershed to the
stress created by the effuent discharged on the receiving water body.
Ashcroft says: Milwaukee is the largest PPP for wastewater opera-
tions in the U.S., which he says involves a great deal of above-ground
asset management. He says another area where the private sector can
help is the reuse of biosolids, increasingly being affected by tight require-
ments currently in Europe and U.S..
In Milwaukee, the dried pelletized sludge is a sought-after fertiliser, and
the company has also leveraged opportunities to generate power, recent-
ly winning a major contract in Hong Kong on that basis.
Ultimately, Ashcroft argues that in the U.S., PPPs provide more lo-
cal control than is possible through a regulated utility. In the regulated
model, the utility sets the rate and ownership of the assets is with the
regulated company, control is not with the local community. With the
PPP model, ownership of the assets remain with the municipality they
decide the rates, and what and when to invest.
In the independently-minded U.S., this is an attractive prospect. De-
spite the odd hiccup, the wide varieties of PPP contracts are clearly still in
demand and evolving constantly to meet new requirements and scenari-
os. With many major projects now under way, the future looks extremely
promising for this most fexible of models.WWi
Enquiry No. 104
Turbidity Monitor AMI Turbiwell
Nephelometric non-contact turbidity
monitor for potable water,
surface water and effluent.
ANALYTICAL INSTRUMENTS
EPA approved.