Global Arab Network | Saudi Arabia – No Postponement of SWCC Restructuring and Privatization

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Saudi Arabia – No Postponement of SWCC Restructuring and Privatization

Global Arab Network - - Maha Karim

Tuesday, 13 October 2009 17:33

Saline_Water_Conversion_Corporation_Saudi_Arabia

The Governor of Saline Water Conversion Corporation (SWCC) in Saudi Arabia, Mr. Fehied F. Alshareef declared that the SWCC privatization and restructuring implementation program remains on track,, and that there was no intention to cancel or postpone it. He also noted that the decision 2/29 of the Supreme Economic Council issued on 29/06/1429H, regarding the program is still in effect and that SWCC team members, along with the advisors, are proceeding with submission of the required deliverables and final reports. In addition, he noted that the Steering Committee, formed by the Supreme Economic Council, was still meeting on a regular basis to oversee the progress of the program. This Steering Committee is constituted of the Governor of SWCC as chairman, representatives from the Ministry of Finance, the Ministry of Water and Electricity, the Public Investment Fund, and a member of SWCC’s Board of Directors representing the private sector.

The Governor confirmed that SWCC is in the final stages of preparing the constitutional documents for the setup of the new joint stock holding company as per decision No 2/29, which will be submitted to the Supreme Economic Council within the next few months for approval. This decision sanctioned the option of transforming SWCC into a state owned joint stock holding company with subsidiary production companies, and potential private sector participation in both the holding company and its subsidiaries.

Commenting on the recent Government decisions to have SWCC execute the construction of the Ras Al Zour and Yanbu power and desalination plants, the Governor made it clear that those decisions would not affect the privatization and restructuring program. He explained that the Government had decided to assume responsibility for executing the Ras Al Zour proiect because of setup and financial issues faced by the developer consortium that had been awarded the project. Increased financing costs and the delay in executing the project agreements, had led the Government to decide to fund the project from its own budget.

Regarding the Yanbu III plant, the Governor indicated that it had been planned as the first plant to be implemented under the SWCC privatization program in a BOO scheme (Build, Own and Operate). However, in light of the Ras Al Zour experience, and the difficulties faced by Marafiq in their Yanbu project, a Royal Decree was issued combining the Marafiq and SWCC power and water projects into a single one with a water production capacity of 550 thousand cubic meters per day and an electricity generation capacity of 1,700 MW. SWCC will tender the project under an Engineering, Procurement and Contruction (EPC) scheme.

Referring to the potential impact of the program on current SWCC employees, the Governor confirmed that there would be no layoffs. “The expertise that SWCC employees have accumulated over the years makes them integral to the success of the company and its future development he explained.

The Governor further pointed out that the Strategy and HR advisors, in cooperation with the SWCC organization and restructuring team were working together to develop the most appropriate SWCC Successor organization structure, including job families, job descriptions, grading and compensation, which is expected to be completed by the end of this year.

As for the current SWCC manpower, the Governor confirmed that the restructuring would not affect the rights acquired by employees over the years. He clarified that the decree No. 210, issued by the Council of Ministers on 18/07/1429H, laid down the measures that guarantee employee rights under privatization, and has set the approach to handle their financial and functional statuses.

The Governor concluded his statement by drawing attention to the message His Excellency the Minister of Water and Electricity, Chairman of SWCC Board of Directors, delivered during his sponsorship of the graduation ceremony of Jubail Training Center in Sha’aban 1430H. In his speech, the Minister mentioned that the privatization and restructuring program was proceeding, and that there would be no layoffs during the transformation of SWCC from a government entity into a company, stressing that the transformation would result in improved benefits for the SWCC employees.

Global Arab Network

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