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‘Private sector must invest in water and power projects'
Published in The Saudi Gazette on 03 - 11 - 2008

The private sector should be involved with increasing share and numbers in the water and power projects, according to Muhammad K. Al-Khalifa, director of privatisation and outsourcing, Bahrain's ministry of finance.
“What is to be done is to front load a lot of investments. There is lot of growth in our countries, and big investments are needed in infrastructure, power and water to meet the increasing demand.”
The private sector can come in and finance these projects, so that the government does not really have to use its balance sheet to finance them,” Al-Khalifa told Saudi Gazette after the first session of the Fourth Saudi Water & Power Forum (SWPF) here on Sunday.
He said it was a welcome sign that everybody in the Gulf is going in for privatization, including the UAE, Bahrain, Qatar and Kuwait is coming on line as well, and Oman too.
“Currently the pressing issue is how to get the money in. The governments are already fully committed. It is not good to leverage the government,” Al-Khalifa said, and added, “You don't want to borrow too much. Let the private sector come in. They will operate these better, finance it, be more efficient, and the government can be left to take care of future policies, and be a strong regulator.”
He said that for the long-term there has to be restructuring of the sectors. As for tariffs, he said, “We are fully subsidised in the Gulf. We cannot continue so for the long term. There has to be a mechanism where people pay the real price. That means they will have to earn more, and for that there should be a proper welfare net.” – SG
H explained that those are the future problems, but the current ones can be solved by letting the private sector invest and operate.
Al-Khalifa said that the problem currently facing the water and power sector is the credit crunch, which will have a negative effect. because these projects are dependent on long-term debt, which doesn't exist now. – SG __


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