Water Purchase Guaranteed

Water Purchase GuaranteedWater Purchase Guaranteed

The energy ministry is to guarantee purchase of water produced by the private sector in a bid to attract private financial resources, the energy minister said, Mehr news agency reported.

The ministry aims to designate projects under government authority through private sector investments.  The private sector can cooperate in water projects by concluding Build-Own-Operate (BOO) or Build-Own-Transfer (BOT) agreements with the government, and receive remuneration for the services.

"This will allow us to maximize productivity while reducing costs," Hamid Chitchian said. "To attract state-of-art technology and enhance quality of performance, Iranian companies are encouraged to cooperate with international companies by establishing joint ventures."

The government is unable to complete unfinished water projects, worth $52.5 billion, and without the presence of private companies their completion will take many years, deputy energy minister Rahim Meidani said last week.

To help funding of incomplete projects, the parliament has also passed a law stipulating that one percent of oil, natural gas, and gas condensate export revenues should be allocated to manage water supply and demand.  

Transfer of water from the sea to the central regions, water desalination, infrastructure to produce water and electricity concurrently, management and transfer of shared water with bordering countries, separating potable and nonpotable water, improving the distribution networks, construction of dams in bordering regions, water imports from neighboring countries, purchase of water saved through conservation, and guaranteeing water purchase and supply by the private sector are among the targets of the new law.

Funding for guaranteed purchases in next year’s national budget has been increased six- fold. The budget plan will also, for the first time, allow for involvement of the private sector in rural water projects.