2005 - 2006 - Pinsent Masons Water Yearbook 2012

UNITED ARAB EMIRATES PART 2: COUNTRY ANALYSIS
United Arab Emirates
The individual Emirates have experienced an increase in water demand of 10 to 40 times since 1970.
Part of the water shortfall for agriculture and municipal gardens is to be met through a comprehensive
programme of sewage treatment and effluent recovery. A study by the UAE’s Federal Environment
Agency states that from around 0.63 million m 3 per day in 2000, consumption is expected to reach 2.3
million m 3 in 2005 and 4 million m 3 in 2010. While the annual recharge for groundwater in the UAE is
20 million m 3 , the rate of groundwater extraction has been around 880 million m 3 a year. In
consequence, groundwater levels have fallen by one metre every year for the past 30 years. In Dubai,
water supply is currently 210,000 m 3 per day and is projected to rise to 660,000 m 3 per day by 2020.
Water demand for Abu Dhabi was 1.87 million m 3 per day in 2003, and is forecast to rise to 3.12
million m 3 per day by 2015.
Privatisation in various forms is taking place
All the major combined power and desalination projects currently under development have a
significant degree of private sector involvement. The emphasis has been shifting towards the private
sector management of water and sewerage services. The UAE continues to seek ways of making
privatisation play a positive role, by attracting international investors and reducing its budget burden.
Bidders will need to emphasise technology transfer and training. The UAE envisages the positive use
of water meters, cuts in subsidies and ending subsidies for expatriates. Water is currently sold at 25%
below its cost price.
In September 2005, the Abu Dhabi Distribution Company (ADDC) sought proposals for an eight-year
O&M contract for water and electricity services. A similar contract will be sought for the Al-Ain
Distribution Company (ADDC), Abu Dhabi's other water and power utility. The Abu Dhabi Water &
Electricity Authority, will also sell 40% in the two companies; 20% tranches will be sold to local
institutional investors and a further 20% will then be offered through an initial public offering. ADDC
has 170,000 water and 200,000 electricity customers, while ADDC has 50,000 water and 90,000
electricity customers.
Ajman is the pioneering Emirate
The Emirate of Ajman has been one of the privatisation pace setters in the Gulf. KEOIC (Kuwait) and
Black & Veatch (USA) were originally awarded a concession for all sewerage services and tertiary
wastewater treatment in the Emirate of Ajman in 1996. The concession was delayed for five years
before construction started in 2001 by United Utilities and was completed in 2003. Operations started
in 2003, with Thames Water and Sharjah’s Metito (Overseas) being awarded a 27.5 year operation
and maintenance contract. Capital spending of US$140 million was needed for the first phase, with
revenues expected to be US$450 million over the BOT’s life. The system is designed to have a PE of
350,000, or 150,000 people connecting 45,000 properties. Costs are to be recouped via the charging
of households and the resale of recovered water. The first phase will serve 45,000 properties.
Al Taweelah desalination facility
In Abu Dhabi, US$250 million in capital spending for desalination and new resources is being
mobilised between 1990 and 2010. Approximately 60-70% of water is currently provided by
desalination and it is expected that this will rise to 80% by 2005. In Abu Dhabi, the Al Taweelah A-1
extension will generate 40-50million gallons of water a day and its management is to be privatised. Al
Taweelah A-2 will then be built for 2001 at a cost of US$700 million. Al Taweelah A-2 will be
constructed on the coast of the Arabian Gulf, North-East of Abu Dhabi. The facility will have a water
desalination facility capable of producing 50-76million gallons of water per day. Al Taweelah project
stages:
Taweelah 72 million gallons per day currently available
Taweelah A-1 expansion 40-50 million gallons per day from 1999
Taweelah A-2 50-76 million gallons per day from 2001
Taweelah A-3 70 million gallons per day by 2010
203 Pinsent Masons Water Yearbook 2005 – 2006