Saline Water Conversion Corporation to implement privatization, restructuring program
SWCC, one of the largest producers of desalinated water in the world, has signed contracts to implement a privation and restructuring program with a number of qualified international advisors in the fields of strategic, Human Resources, Investment Banking, Change Management, Accounting, Technical, and Legal which will last for 17 months...
Saudi Arabia, Dec. 11, 2008 -- SWCC, one of the largest producers of desalinated water in the world, has signed on Saturday 29 Nov 2008, the contracts to implement the privation and restructuring program with a number of qualified international advisors in the fields of strategic, Human Resources, Investment Banking, Change Management, Accounting, Technical, and Legal which will last for 17 months.
The signing ceremony was attended by his highness the Minister of Water and Electricity, who is the Chairman of The Board of SWCC Eng. Abdullah Alhusayyen and a number of officials from SWCC. The signing took place in the Ministry of Water and electricity.
Fehaid Al-Shareef the governor of SWCC signed with 'Booz and Company' the contract for Strategic Advisory services. Their tasks in the privatization and re-structuring program will be project management and leadership, program management office ongoing operation, training and knowledge transfer, detailed design of organization structure, detailing manpower plan, key management processes, authority boundaries, governance model, grievance settlement plan, business process re-engineering (BPR) and systems implementation, and strategy implications on regulatory requirements. The strategy advisor will be responsible for the coordination between all the other advisors.
Contract was also signed with 'Hay Group' for advisory services in the Human Resources field. They will be responsible for understanding HR context and strategic framework, supporting organization design with all details, revise grading and compensation structure, conduct staff redeployment, identify training needs and devise training and development plan, develop and implement and document personnel policies and procedures, and plan and implement transaction.
Next contract was signed with 'HSBC Saudi Arabia Ltd' to provide services in the investment field. They will define the project structure and components, prepare and issue RFP, prepare tender, bid evaluation and clarification, and negotiate and assist up to financial close.
The following contract was signed with 'KPMG Alfozan & Alsadhan'. Their tasks include research and issue briefing papers and reports, prepare opening balance sheets for the holding company and eight production companies, convert opening balance sheets to generally accepted accounting standards, establishing financial policies and procedures for the holding company and its subsidiaries, and assist in the transaction of introducing the private sector.
Contract was also signed with 'Booz & Company' for advisory services for Change Management Program. Scope of work includes developing a CM program, blueprint and execute awareness and communication plan, execute change training plan, and execute change monitoring plan.
Next contract was signed with 'Fichtner' for technical advisory services. Tasks include supporting strategy advisor for commercialization of SWCC with asset evaluation and life assessment, transaction preparation, and supporting the investment banking advisor through all stages of the transaction.
Contract was also signed with 'Freshfields Bruckhaus Deringer' for legal advisory services. Their tasks include definition of the project structure, preparation and issue of RFP, tender process, negotiation and assistance to financial close, commercialization of SWCC, establishing SWCC successor and its subsidiaries, and preparing and processing any necessary relevant legal document.
After the signing ceremony, the Minister of Water and Electricity gave a speech where he explained that the first project to be offered for the private sector participation will be Yanbu and the last one will be Jubail. He also said that signing these contracts is facilitation to the transformation of Saline Water Conversion Corporation from a Government entity to a Holding Company which can be later offered for IPO after studying.
Later Mr. Al-Shareef, the Governor of SWCC said that the citizens will start noticing the benefits of these projects after 3 years, and that the demand for water will raise to 10 million cubic meters per day and investments in future projects will reach to about 160 Billion Saudi Riyals.
He added: this project, the Privatization of SWCC, clearly demonstrates the determination of the Kingdom of Saudi Arabia and its commitment towards the privatization process. Several decrees were issued to face challenges and encourage private sector participation in Seawater Desalination and Power Generation. In-line, several entities were facilitated towards achieving this goal such as establishing the Electricity and Combined production Regulating Authority (ECRA), establishing Water Electricity Company (WEC) as the single buyer for water and electricity from investors, leasing land with minimal symbolic rate to Independent Water and Power Projects (IWPP), and adapting the BOO model.
These efforts were crowned with signing the first project which is Shoaibah-3 where investors own 60% of the project and Government owns 32% and the remaining 8% owned by Saudi Electric Company (SEC).
Al-Shareef also said that the wise economic policy that is adapted by His Majesty the Custodian of the Two Holly Mosques King Abdullah Bin Abdulaziz who is the Chairman of the 'Supreme Economic Council' is supported bya strong and successful base that achieved a balanced economic growth between economic needs and social circumstances and strategic goals towards developing the Kingdom in all fields, one of which is Water.
Al-Shareef expressed his hope that these efforts taken by SWCC will succeed in speeding up the Privatization of one of the most important utility in the country, which carries the burden of many responsibilities to utilize latest technology and work with highest efficiency and reduce cost and eventually opening the door to private sector when privatization is achieved and becomes a reality.
He emphasized the importance of the role of the coming stage for the desalination sector in the Kingdom and its privatization as SWCC is the largest producer of desalinated Water in the world, and when accomplished, should impose a drastic development in the desalination industry internationally.
His Excellency thanked the Minister of Water and Electricity for his care and hosting of the ceremony.
>> Saudi Arabia to privatize Saline Water Conversion Corporation