Oman’s restructured water sector to be unveiled this year

The ongoing restructuring of the Sultanate’s water and wastewater sectors is due to be wrapped up before the end of this year – a landmark exercise that will pave the way for the Authority for Electricity Regulation (AER) to assume responsibility for the water sector as well.

According to the Public Authority for Water (Diam), considerable progress has been made in the unbundling and reorganization of the constituent entities that make up the water and wastewater sectors in the Sultanate.

“During (2019), the Council of Ministers approved further steps in the project of restructuring the water and wastewater sectors, and it is hoped to complete the implementation of the restructuring project during the year 2020. The Project will define the public policy for the water and wastewater sector, regulatory authority, and operational structure,” said Dr. Abdul Malik bin Abdullah al Hinai, Chairman of the Board of Directors, stated in foreword published in the 2019 Annual Report of Diam.

“Diam has continued to play an active role in the industry restructuring project with considerable progress being delivered throughout the year. The draft sector law has been developed and consultation with the Ministry of Legal Affairs has commenced. It is expected that the project will be implemented during 2020,” added Mohammed bin Abdullah al Mahrouqi, Chairman – Diam.

Nama Holding Company – part of state-owned Nama Group – is spearheading the execution of the 20-months Detailed Design and Implementation phase, which was initiated in April 2018. The process broadly mirrors the unbundling and restructuring of the electricity sector that was undertaken around 2004.

It is understood that the restructuring exercise will dispense with the multiplicity of entities currently providing water and wastewater services in the Sultanate.  In their place will be three companies each of which will provide potable water and wastewater services within a specific geographical area. This integrated business model will apply to all three companies in their respective jurisdictions. Sitting on top of this model is a regulator and policymaker for the combined sector.

Besides enhancing administrative and operational efficiencies within the new corporatized companies, restructuring will also contribute to increased competition and delivery of sustainable services. The overarching objective is to support water security.