Abstract
The UAE is a thirsty consumer of water. Abu Dhabi claims the highest per water
consumption rate in the
world, at 525-600 gallons a day (g/d). Officials
estimate that the emirate’s total consumption of water
resources
exceeds by 24 times its natural recharge capacity.
In the UAE as a whole,
desalinated water accounts for 80% of total water consumption. The UAE has
emerged as the Middle East and North Africa (MENA) region’s second
largest producer of desalinated
water, after Saudi Arabia.
The UAE
water sector is organised along federal lines. Abu Dhabi Water & Electricity
Authority
(ADWEA) is the utility responsible for the supply of water in
Abu Dhabi, taking over from the Water &
Electricity Department in 1999. In
Dubai, Dubai Electricity & Water Authority (DEWA) operates the
water and
electricity sector. Sharjah Electricity & Water Authority (SEWA) is the
authority with
responsibility for the small emirate’s water and
power. For the four northern emirates – Ajman, Fujairah,
Ras
al-Khaimah and Umm al-Quwain – a single authority, the Federal
Electricity & Water Authority
(FEWA), is the water and power provider.
ADWEA has also been the most active promoter of privatised water provision,
via a series of independent
water and power projects (IWPPs). Since its
foundation, ADWEA has built at least one new IWPP every
year, besides
expanding existing facilities.
The much weaker economic climate –
with demand substantially down, particularly in Dubai – may force
the Abu Dhabi authorities to reform the entire water sector model. The spectre
of nationalisation is
looming if the emirates’ major privately
financed water projects encounter further delays.
Dubai has been hardest
hit by the global economic downturn, and the clutch of real estate developers
that
have driven the expansion of the state’s megaprojects are now
delaying, scrapping or downsizing their
various schemes. This will have a
material impact on water demand, particularly on the district cooling
air
conditioning systems.
DEWA will stagger its developments as the emirate
faces a sharp fall in expatriate population numbers in
2009-2010. Contract
awards for the 600m g/d Hassyan power and water project at Jebel Ali has
been
delayed since DEWA regards Dubai as having a sufficient supply of
power and water,
ADWEA may decide to dispense with the competitive
tendering process that have been the mainstay of
its expansion plans, in
order to speed up the construction of new IWPPs.
H209 should see a revival
in water project activity in the UAE, as project sponsors activate schemes
that
had been mothballed in 2008 amid concerns over demand strength. DEWA
has announced plans to invest
more than US$16bn over the next five years
to boost its power and water capacities.
Despite Abu Dhabi’s
successful deployment of private-led development models, Dubai, Sharjah and
the
northern emirates have yet to adopt the IWPP template. However, in
Q407, the government made the first
moves to open up the northern emirates
power and water sectors to private investment.
In 2008 DEWA requested
government permission to raise power and water tariffs for the first time in
10
years, in order to fund its investment programme and cover rising
costs.
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