OPPORTUNITIES IN THE WATER & WASTEWATER SECTOR (NWC TRANSFORMATION JOURNEY)

Transcription

1 OPPORTUNITIES IN THE WATER & WASTEWATER SECTOR (NWC TRANSFORMATION JOURNEY) LOAY AL MUSALLAM, CEO NATIONAL WATER COMPANY JAPANESE-SAUDI BUSINESS FORUM 1 ST FEBRUARY 2012, TOKYO, JAPAN

2 AGENDA INTRODUCTION NWC KEY ACHIEVEMENTS, 3 YEARS OF OPERATION STRATEGIC INTENT, 2012 AND BEYOND MAJOR BUSINESS OPPORTUNITIES 2

3 WATER & WASTEWATER INFRASTRUCTURE MARKET FORECAST BY REGION (USD 1.4 TRILLION IN 7 YEARS) Latin America & Caribbean 6% Sub-Saharan Africa 1% North America 20% Eastern Europe Central Asia 2% Western Europe 23% South Asia 2% Middle East North Africa 7% Utility Operating Expenditure Wastewater Rehab New Wastewater Network New Water Networks Water Network Rehab Water Resources East Asia Pacific 39% Source: Global Water Intelligence, Water Technology Markets

4 PROJECTED CAPEX & OPEX SPEND FOR TOTAL KSA ( ) 66.4 BILLION US$ Combined Water & WW (in Bio. SAR) TOTAL = 66.4 Billion US$ OPEX CAPEX Requirements for Water TOTAL = 30.7 Billion US$ 47.9 Requirements for Wastewater TOTAL = 35.7 Billion USD 44.8 OPEX CAPEX OPEX CAPEX 4

5 VALUE OF WASTEWATER INFRASTRUCTURE PROJECTS IN THE GCC, 2012 to 2016 TOTAL = 31.2 BILLION US$ Saudi Arabia UAE Bahrain Kuwait Oman Qatar 1,610 2, ,287 3,687 20,671 Saudi Arabia = 66% of Total infrastructure spend in GCC or 20.7 Billion US$ Source: MEED Report MEED Wastewater Reuse Summit

6 AGENDA INTRODUCTION NWC KEY ACHIEVEMENTS, 3 YEARS OF OPERATION STRATEGIC INTENT, 2012 AND BEYOND MAJOR BUSINESS OPPORTUNITIES 6

7 ACTUAL RESULTS 2011 LEAK DETECTION AND WATER SAVING Volume of Water Saved due to Leak Detection (Million m 3 ) Average Time for Leak Repair (Hours) Target RCBU +110% % Actual % -52% JCBU (Tar) 2011 (Act) Year 2011 Riyadh Jeddah Total No. of Leaks Identified and Repaired (Nos) Volume of Water Saved (M m 3 ) Approximate value of Water saved (Million SAR) 38,799 16,516 53,

8 ACTUAL RESULTS 2011 Average Time to Install Wastewater Connection (Days) Average Time to Install Water Connection (Days) Target Target % Actual 70-30% Actual -14% % Water Supply (Million m3) Quality of Water Testing Compliance (%) +10% -3% Target Actual +7% -0.4% Target Actual ,035 1, % 99.1% 99.3% 99.7% 99.3%

9 ACTUAL RESULTS 2011 Cum Vol of TSE Agreements and MOUs Signed (m 3 /day) No. of New Wastewater Connections (#) Target +35% +10% Actual 40,000-5% Target Actual 287, , , ,000 27,600 20,700 30,000 28, Avg. Lead Time to Award Capital Projects (Working Days) Number of Projects behind Schedule (#) % 140-9% 128 Target Actual % -22% Target Actual

10 ACTUAL RESULTS 2011 Total Cash Inflow (Million SAR) Customer Satisfaction Index (%) +18% +7% Target Actual Conducted by MASMI, a reputed 3 rd Party company +23% -2% Target Actual % 85% 84% 85% 83%

11 HIGHLIGHTS OF KEY ACHIEVEMENTS NWC Accomplishments in its short 3-year journey 11

12 LAUNCHED JEDDAH WASTE WATER SYSTEM W/ TOTAL INVESTMENT OF MORE THAN 2.2 BIO US$ Project Accelerated from 5 years to 3 Years Combined total treatment capacity for Jeddah WWTP to reach 1,000,000 m³/day. A total of 132,000 house connections and 2,500 kilometers of networks, pipelines & mainlines. 12

13 LAUNCH OF COMPASS INTEGRATED SYSTEM PROJECT WAS COMPLETED IN 14 MONTHS SYSTEMS WENT LIVE IN RECORD TIME. COMPASS, a valuable tool towards customer service excellence It integrates - CC&B, EAM, GIS & SCADA 13

14 DRYING AND DE-SLUDGING OF AL NATHEM LAKE COMPLETELY DRIED UP A 17-YEARS OLD SEWAGE LAKE IN RECORD 2 MONTHS Before During After Size of the lake, 5 Million m 2 100% of the sludge has been treated 14

15 DRIED UPAN 18 YEARS OLD WASTEWATER LAKE IN JEDDAH CITY IN RECORD 3 MONTHS NWC successfully drained Jeddah Misk lake, treated the contaminated soils ahead of the scheduled time by 9 months. Before During After 15

16 NWC, WITHIN A SHORT PERIOD OF TIME HAS BUILT MODERN & SOPHISTICATED CUSTOMER SERVICE INFRASTRUCTURE (Customer Centers/ Call Centers/ etc.) 16

17 NWC, WITHIN 3 YEARS, BROUGHT HOME SOME OF THE MOST COVETED AWARDS AND RECOGNITION IN THE WATER SECTOR NWC bagged the 2011 Best in Innovation Award for SCADA Insights Award for Best Customer Win-Back Program 2011 Bagged GWI s Best Water Reuse Project for 2011 Award 17

18 NWC VENTURES INTO RENEWABLE ENERGY USAGE IN OIL-RICH KSA Living up to its strategy in the sustainable management of the environment, NWC had started construction of the 1 st WWTP equipped with combined heat & power generation Al Kharj WWTP to served Riyadh w/ 200,000 m³/day capacity and generation capacity of 2.5 megawatt Bidding process for yet another heat-topower WWTP in Jeddah Airport2 has commenced which will, after completion, be the 2 nd biggest plant in its kind in the Middle East with a generation capacity of 7 megawatt and treatment capacity of 500,000 m³/day. 18

19 EMTYAZ CONTRIBUTES TO INSTILL A PERFORMANCE BASED CULTURE Improved Communication Alignment with Strategy Performance Monitoring. KPI Cascading 19

20 AGENDA INTRODUCTION NWC KEY ACHIEVEMENTS, 3 YEARS OF OPERATION STRATEGIC INTENT, 2012 AND BEYOND MAJOR BUSINESS OPPORTUNITIES 20

21 NWC, Shifting to High Gear by Adopting a New Business Model Cost Optimization Treated Sewage Effluent (TSE) High Value Customers Customer & Operations Capital Project Delivery 21

22 COULD TSE BECOME THE GROWTH ENGINE OF NWC? Sizable TSE vs. potable water growth revenues in million SAR over the next 20 years for 6 cities 3,500 3,000 2,500 2,000 1, , TSE Revenue Potable Water revenue Potable Water revenue TSE Revenue Source: : NWC actual projections Fichtner projections 22

23 NWC ACHIEVEMENST IN TSE SALES/ MoU Agreements (in 3 years only) The Growth for TSE volume sales/ MoU agreements in 3 years versus the last 20 years (m³ per day) Cumulative TSE Sales/ MoU Agreement (m³ per day) , , , , , , , , , , , , , , years Prior to NWC

24 AGENDA INTRODUCTION NWC KEY ACHIEVEMENTS, 3 YEARS OF OPERATION STRATEGIC INTENT, 2012 AND BEYOND MAJOR BUSINESS OPPORTUNITIES 24

25 in Million SAR NWC TOTAL CAPEX REQUIREMENTS FOR THE NEXT 5 YEARS FOR 5 MAJOR CITIES TOTAL = 31 BILLION SAR/ 8.3 BILLION US$ RCBU JCBU MCBU TCBU 8,000 7,345 7,000 6,000 5,470 5,000 3,760 3,740 4,433 4,000 3,230 3,000 2,000 1,255 1,755 1,000 - Water Plants, Wells & Reservoirs Water Mains Water Networks Water House Connections WWTP Types of Investments Wastewater Mains Waste Water Networks Waste Water House Connections 25

26 MAJOR BUSINESS OPPORTUNITIES Opportunities in TSE 26

27 WASTEWATER REUSE OPPORTUNITIES (TSE) RECENT SUCCESSES AND FUTURE PLANS Creation of financially sustainable businesses from NWCs existing wastewater assets by developing an environmentally friendly and financially sustainable long term market for treated sewage effluent. Structured into the formation of business units, which are incubated for period, followed by private participation at a later date and subsequent spinoff into a SPV. TSE has potential to become a growth driver for NWC. 27

28 TSE FORECAST TSE usage in 6 major cities of the Kingdom is likely to increase from 0.8 Million m3/day to 4 Million m3/day by ,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Dammam & khober. Madinah Makkah Jeddah Riyadh 28

29 MAJOR BUSINESS OPPORTUNITIES Opportunities in Operations & Maintenance JV s 29

30 BY 2015, FOUR O&M GEOGRAPHIC CLUSTERS WILL HAVE BEEN FORMED WITH A POTENTIAL FOR COMBINING THE WESTERN REGIONS INTO ONE CLUSTER Northwest O&M services contract clustering # of contracts/ annual value (SAR mil)/ Thousands of inhabitants Potential to combine into single cluster if West (north) SPV partner is the same partner as West (south) Southwest Contracts Contracts Value Value 1,745 Population * Served 82 5,905 Population served Tabuk Madinah Yanbu Makkah Jeddah Taif Buraida/ Onaizah Riyadh Abha/ Khamis- Mushayat 1 Population base year is Jubail Dammam/ Al Khobar Contracts Al-Hofuf & Al- Mubarraz * 1 Contracts Proposed Value * Value 2,639 Population Served 4,583 Population Served East Central Map legend NWC captive city Captive in 2011/ 2012 Captive planned after

31 THE O&M & TSE INITIATIVE LEADS INTO A SIZABLE OPPORTUNITY ITS REVENUE EVOLUTION IN THE NEXT 20 YEARS WILL BE A CUMMULATIVE REVENUE OF 32.9 Billion SAR / 8.8 Billion US$ Revenue (TSE) Revenue ( O&M) EBITDA (O&M) EBITDA (TSE) 6,784 7,238 5,835 4, , , , Notes: (1) Riyadh network contracts (2) Riyadh plants and hybrid contracts Source: NWC, Economist Intelligence Unit, MOWE, Global Water Intelligence, Datamonitor, NCB capital, Expert interviews, Market Research World, Frost & Sullivan, A.T. Kearney analysis

32 THANK YOU 32