based on the use of desalinated water and fossil groundwater for large-scale irrigation and domestic, commercial and industrial uses at a level comparable to developed countries. the saline water conversion corporation, created in 1965, has been an important player in this process of change. until 1994 domestic water use was entirely free in saudi arabia. only then a very moderate tariff has been introduced. in the early 2000s the government decided to involve the private sector not only in the construction of infrastructure, but to expand its role also to the financing and operation of infrastructure through build-operate-transfer (bot) projects. the first bot project in the water sector was a wastewater treatment plant in jeddah, followed by independent water and power projects (iwpps) for integrated power and desalination plants. in 2003 the ministry of water and energy was created. it took over the water resources management function from the ministry of agricultural and water and the responsibility for water supply and sanitation from the ministry of municipal and rural affairs. in the same year the water & electricity company was created as an off-taker for water and electricity produced by the iwpps. in 2008 the privatization program was expanded to drinking water supply when the kingdom's first management contract was signed for the capital riyadh, followed by two more management contracts (see below). beginning with the expiration of the management contract in riyadh in 2014, it is planned to award 20 to 30-year lease contracts for the cities covered by management contracts. as of late 2014, the timing was pushed back to 2017/18 and nwc expected to take a 40% share in each of the joint ventures that would be selected to run the water and sewer systems of the three cities. according to nwc ceo loay al-musallam the joint ventures can be profitable despite low water tariffs through the sale of treated effluent, because bulk water and capital investments are provided for free. due to generous subsidies for water provided by the government of saudi arabia to its people, the country experienced rapid growth in irrigation areas. in 1980, the volume of water consumed in the country was approximately 7.4 billion cubic meter, and increased to astonishingly 20.2 bcm in 1994, and by 1995, 35% of non-renewable resources of groundwater were drained. in the year 2000, the government of saudi arabia took action to mitigate water consumption by decreasing the subsidies and incentivising the usage of water efficient technologies such as drop irrigation and soil moisture sensing equipment. this has led the wheat farming industry to gradually shrink over the years, from producing 4 million tons in 1992 to 1.8 million tons in 2000, and in 2016 the production has come to a halt. responsibility for water supply and sanitation until the establishment of the national water company (nwc) in 2008 there was no separation between institutions in charge of policy and regulation on the one hand, and service provision on the other. instead all key sector functions were the direct responsibility of a single ministry, the ministry of water and electricity. the quality and efficiency of service provision are hampered by the many weaknesses afflicting the public sector in saudi arabia in general. these include an inadequate civil servants recruitment policy, insufficient salaries, limited skills, no accountability for action taken (or not taken), a lack of strategic planning, and ad-hoc investment decisions. policy and regulation since 2016 the ministry of environment, water and agriculture (mewa) is responsible for policy and regulation of water and sanitation services. there is no separate regulatory agency for the sector. the recently established electricity and co-generating regulatory authority (ecra) only regulates privately owned desalination plants. agriculture is by far the main water user in the country and contributes in the depletion of fossil aquifers on which a large share of the country's drinking water supply depends. service provision the responsibility for service provision is shared by the private and public sectors. the national water company (nwc) is in charge of water supply and sanitation in the largest cities - riyadh, jeddah, mecca and taif as of 2013 in partnership with foreign private operators. in other cities water supply and sanitation is still the direct responsibility of mowe through its regional directorates and branches. local government, which is in charge of service provision in many other countries, has no role in service provision in saudi arabia. desalination plants are run by the saline water conversion corporation (swcc) which provides water for free to the nwc or by private companies called independent water and power projects (iwpps) which sell water and energy to a public entity called the water & energy company. many wastewater treatment plants are run by private companies under bot contracts. the national water company and management contracts the national water company (nwc) plans to become a "leading water utility in the region" within 4 to 7 years after its creation in 2008. nwc's twelve-member board is chaired by the minister of water and electrity and includes the ceo of the company. nwc contracts out water distribution services for individual cities to the private sector under management contracts. key objectives include improving service quality, operational efficiency and customer satisfaction. the contracts are preceded by one-year technical assistance contracts. this is followed by a further 1-2 year validation period during which the baseline and target data for key performance indicators are being reviewed. tariff levels will not be affected. the scope of the contracts includes training and qualifying saudi nationals, as well as research and development with the aim to transfer technology. the three contracts signed so far are: in april 2008 for the capital for riyadh with the french firm veolia, covering six years and valued at $60m, a seven-year contract with the french firm suez for jeddah, in june 2010 for mecca and taif with the french firm groupe saur, covering five years and valued at $46m. as required by saudi law groupe saur's team working in mecca consists entirely of muslims. further management contracts are expected to be tendered for medina and greater dammam. nwc says that between its creation in 2008 and 2012 it has saved 115.4 million m3 of water through leak reduction, improved water quality compliance from 82% to 98.7%, increased customer satisfaction from 45% to 83%, reduced the number of projects that are behind schedule from 104 to 3, and has improved its annual cash collection from sar561 million ($149 million) to sar1,119 million ($298 million). nwc also plans and oversees infrastructure projects such as the sar 1.6 billion ($426 million) riyadh water supply programme completed in 2013 that included drilling 43 new wells and building 27 brackish water desalination plants. nwc had initially been expected to take over medina in 2011, as well as dammam and al-khobar in 2013. the saline water conversion corporation the saline water conversion corporation (swcc) is in charge of operating the country's publicly owned desalination plants, and operating a network of water transmission pipelines 4,300 kilometres (2,700 mi) to transport the water in bulk from the plants to the major consumption centers, some of them located far inland such as riyadh. swcc is the biggest water desalination entity in the world. it has more than 4.6 million m3/day water installed capacity. swcc has a research department and a training center. although it formally is a corporation, swcc is not run like an independent company on commercial principles, but rather like a branch of the government. its main product, bulk water, is provided for free to its main customer, nwc. as of 2016, swcc holds some sar 80 billion ($21 billion) of assets. in 2008 the government announced plans to "privatize" swcc by transforming it into a holding company. the holding company would initially supervise affiliated production firms that would run the desalination plants. subsequently, it would sell off the firms and include the private sector in a way similar to what has been done with the independent water and power projects (see below). the first plant to be privatized would be in yanbu. however, the plans have been modified in 2010: the old plants continue to be operated by swcc, while new plants are built and operated by the private sector. in june 2016, amid low oil prices, it was decided to revive the initial privatization plan. water minister abdulrahman al-fadhli and swcc governor abdulrahman al-ibrahim said that the company will become a holding company, served by local production units. privatisation will be in two stages: first, investment partners for the desalination plants ("production units") will be sought; then shares of the holding company will be sold on the saudi stock market. around sar110 billion ($29.3 billion) funding for investment will be needed by swcc over the next 15 years. independent water and power producers for desalination in the early 2000s, saudi arabia began to invite the private sector not only to build, but also to finance and operate new desalination plants. a water and energy corporation (wec) was established as an off-taker that buys water used for municipal uses from the iwpps through 20-year power and water purchase agreements (pwpas). the government fully guarantees the payments due from wec to the iwpps. this follows the example of persian gulf countries, which had introduced iwpps several years earlier. the first such project in saudi arabia was the shoaiba iii independent water and power producer (iwpp) signed in 2007 and completed in 2010. it is located on the red sea and provides water to jiddah, mecca and taif. the second iwpp was the jubail ii project, located next to the jubail industrial complex on the persian gulf coast. the off-taker for the industrial water is the saudi company marafiq, the utility that provides power and water to the industrial cities of jubail and yanbu. formed by royal decree in 2000 and established in 2003, it is owned by four public entities and seven private shareholders. in 2007 saudi arabia had plans to launch ten further iwpps by 2016 with a total investment of $16 billion. however, the saudi government changed its approach and decided to procure its plant in ras al-khair and other plants from contractors and to operate them through swcc, as it had been the case before iwpps were introduced. ras al-khair was opened in 2014 as the largest desalination plant in the world, built at a cost of $7.2 billion. independent water and power producers in saudi arabia locationstatuscapacity (mln m3/year)capacity (mw)notes shoaiba iiioperational in 20103211200 jubail iioperational in 20092922755 shuqaiq iioperational in 201177850 in 2016 wec planned to become again an offtaker for an iwpp, the al kahfji solar desalination plant built by advanced water technology (awt). awt was the contractor of the plant and could become its operator under a proposed off-take plan. another large desalination plan on the drawing board is the jeddah 4 plant that could be implemented as an iwpp, although pre-bidding as a normal construction contract had already been initiated. the water & energy company the water & energy company, created in 2003, is the off-taker for desalined water produced by privately operated desalination plants. it is jointly owned by swcc and the saudi electricity company (sec). project finance for wastewater treatment plants project finance, i.e. financing secured primarily by the projected revenue stream of the project, has been commonly used to finance wastewater treatment plants in saudi arabia. in may 2002 the first wastewater contract in saudi arabia financed in this way, in this case as a bot contract, was awarded to a consortium of local firms. the consortium was to rehabilitate, operate, maintain and upgrade the wastewater system of the jeddah industrial city over a period of 20 years and invest us$32 million. the government has awarded many more bot wastewater treatment contracts since then, based on the revenue stream of long-term sales agreements for treated wastewater sold to major customers. efficiency the operational efficiency of water and sanitation services is typically measured through the level of non-revenue water and the ratio of staff per 1,000 connections. because of the low level of metering it is difficult to estimate the level of non-revenue water in saudi arabia. only in the case of riyadh, where meters exist, a meaningful estimate has been done, resulting in an estimated 34% of