|
Saudi Arabia
Utilities
Most of Saudi Arabia's electric power-generating capacity was
built during the 1970s and 1980s. Nonetheless, after the establishment
of the first municipal power plant in 1950, the development of
the industry occurred largely in the private sector. By 1980 about
ninety-five private companies supplied electric service, leading
to a totally decentralized system. Voltages and cycles differed
between towns and even within towns, preventing consumers from
standardizing equipment and appliances. Consumers suffered from
chronic power failures, voltage fluctuations, and poor repair
service. Hospitals and large plants often had their own generators.
Planners estimated that only 54 percent of the potential demand
for electricity had been met in 1978.
In the early 1970s, the government embarked on a twofold plan
to organize the sector and to stimulate further investment. The
system relied on private sector participation with strong government
oversight and planning. Early attempts to standardize the system
called for all new generators to be 60 hertz with distribution
voltages of 127 and 220 volts. In 1976 the first of a series of
regional companies, Saudi Consolidated Electric Company (Sceco),
was formed for the eastern region (Sceco-East). Ownership of the
regional companies, which amalgamated their facilities under Sceco,
remained locally held. The government had some equity participation,
but the regional companies retained administrative autonomy. The
government requested Aramco to manage Sceco-East because of its
large share of generating facilities and its management expertise.
Regional companies for the central and southern parts of the country
were formed in 1979; Sceco-West was established in 1981. The goal
was to link the generators in a region and to improve planning
and service. Eventually the regional companies would be tied together
to form a nationwide grid. The government-owned General Electricity
Corporation, which served rural areas, participated in the regional
companies in areas where it was active.
In addition, the government provided the private sector direct
financial assistance for building and operating generating plants
and distribution facilities under the Electric Utility Lending
Program, administered by the Saudi Industrial Development Fund
(SIDF). The government provided consumption subsidies by paying
producers to sell their power below cost. The government also
gave the producer an implicit fuel subsidy on gas. Direct subsidies
to the sector peaked at SR2.75 billion in fiscal year 1984-85
but fell in 1989 to SR210 million. Following a 1992 government
decree, subsidies were expected to rise again because electricity
charges to users were halved.
After the early 1960s, generating capacity expanded rapidly.
By 1979 generating capacity amounted to 4,214 megawatts. By 1990
this capacity had quadrupled to 16,549 megawatts. Between 1975
and 1979, consumption of electricity increased 37 percent yearly
while the number of consumers rose 16 percent yearly. During the
1980s, the consumption growth rate slowed to 23.8 percent annually,
with the number of consumers rising annually by 17 percent. From
872,054 subscribers in 1980--representing 4 million people--subscribers
reached 2.4 million in 1990. Industry usage averaged 28.3 percent
of electricity consumed, although in the Eastern Province, given
the location of country's major industrial complexes, industry
demand accounted for more than 60 percent of electric consumption.
Industrial users in the other regions consumed less than 5 percent
of total electricity generated.
Water consumption also rose rapidly during the 1970s and 1980s,
both by traditional sectors and by newly established urban and
industrial users. In the early 1980s, a national water plan was
formulated when particularly serious problems were encountered.
Lack of sewage treatment was contaminating groundwater from wells
in the Eastern Province, and overpumping from wells in the central
region near Riyadh drastically lowered the water table. However,
few substantive changes in water supply have been instituted,
leading to a continued depletion of water resources. Saudi Arabia's
water was supplied from three different sources: surface water
(about 10 percent), underground aquifers (more than 80 percent),
and desalination plants (5 percent). The nonrenewable sources
continued to provide the bulk of water to users and were being
depleted at an alarming rate. Efforts to supplement the available
water supply have concentrated on building desalination plants.
In 1980 fourteen plants were in operation with a combined capacity
of 65 million cubic meters per year. Eight more plants were constructed
during the decade taking total capacity to more than 600 million
cubic meters per year. By the end of the 1980s, output from these
plants was approximately 500 million cubic meters per year.
Between 1980 and 1985, water consumption more than tripled from
190 million cubic meters to 574 million cubic meters. The consumption
increase continued in the latter half of the decade with water
usage rising to 900 million cubic meters in 1990. Agriculture
was the prime water user, accounting for 85 percent; its rate
of consumption quadrupled from 1980 to 1985. Although data are
lacking for the late 1980s and early 1990s, it appeared that usage
continued to grow but at a slightly slower rate. The government's
policy of providing water free to the sector, combined with new
water-intensive methods of farming have been the main factors
for this growth of water consumption.
The idea of importing water into Saudi Arabia was first presented
in the early 1970s when Denmark's Royal Greenland Company was
commissioned to perform a study on the feasibility of towing icebergs.
The conclusion reached was that no technical problems were insurmountable,
but that the cost was prohibitive. In the late 1980s, the Turkish
government proposed a plan whereby two pipelines from Turkey would
bring water (at a cost of about US$1 per cubic meter compared
with US$5 to US$6 per cubic meter for producing desalinated water)
to both the Eastern Province and the Hijaz. Security concerns
have prevented the Saudis from moving further on these plans,
however.
Data as of December 1992
|
