A new desalination plant with a daily capacity of 50,000 cubic meters will be constructed south of Jeddah by the private sector, the Arab News reported today.

Hattan Hamouda, director of investment planning at Jeddah Municipality, said that the project is expected to help solve Jeddah’s water shortage. He added that the plant would be built on land allocated by the municipality for investment.

In July 2008, Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz approved an executive program for privatizing the Saline Water Conversion Corporation (SWCC), which operates more than 30 desalination plants on the Red Sea and Arabian Gulf coasts.

Minister of Water and Electricity Abdullah Al-Hussayen said the measure aims to meet the growing demand for water in Saudi Arabia as a result of increasing population and growing industrial and business activities all over the country.

Governor of the SWCC Fehied Al-Shareef said the corporation would be transformed into a holding company and part of its shares floated for public subscription.

The Yanbu Desalination Plant, which supplies 400,000 cubic meters of water and 1,600 megawatts of electricity, will be first to be privatized at the beginning of 2009. The first independent water and power project in Saudi Arabia, the Shuaiba-3 desalination plant, is scheduled to be completed by the end of this year. Shuaiba-3 will supply 1.3 million cubic meters of water to Makkah, Jeddah and Taif.

Al-Hussayen said five Saudi cities consume about 60 percent of the country’s water resources and emphasized the need to reduce per capita water consumption, which exceeds 270 liters.

Speaking about investment opportunities in water and electricity, Al-Hussayen said that Saudi Arabia would require more than $200 billion in investment for desalination and power generation projects over the next 15 years in order to meet the needs of its growing population and its developing economy.