Private sector participation in desalination in the Mediterranean Middle East (MME) — past, present and future

Abstract

Private sector involvement in desalination projects in the Mediterranean Middle East (Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Syria and Tunisia) has in the main been limited to the provision of facilities under turnkey type contracts — with the exception of Israel which has recently embarked on a series of BOO/BOT type projects. The first part of this paper outlines the principal types of private sector involvement employed on infrastructure projects globally today — from management contracts to concessions to full-scale privatisations. Each of the MME countries is then reviewed in turn to identify the forms of private sector involvement experienced to date on infrastructure projects, with particular emphasis on desalination projects. The second part of the paper sets out the general drivers and constraints behind private sector involvement on desalination projects from both public and private sector perspectives. Drivers include: need (either to replace or supplement existing supplies); lack of alternative supplies; desire for private sector expertise, lack of public sector funding; and availability of IPP's. Constraints include: political opposition; lack of appropriate regulatory/legal frameworks; inability to pay for services; high country risk; and lack of track record of completed PSP projects. The application of these drivers and constraints to each country in the MME is then undertaken, and the results help inform the likely future prospects for private sector involvement on desalination projects in the foreseeable future.