The Saudi Water Authority has issued a new and comprehensive regulatory framework that sets out the rules for bulk purchasing of water and wastewater services, in a move aimed at governing the relationship between service providers and major beneficiaries, ensuring the sustainability of water resources and enhancing transparency in operating costs.
Context of transformation in the water sector
This regulatory move comes at a time when the water sector in Saudi Arabia is undergoing fundamental transformations in line with the goals of Vision 2030 and the National Water Strategy, which focuses on resource sustainability and increased operational efficiency. The Saudi Water Authority, as the regulatory body, is working to close regulatory gaps in closed water treatment plants and large facilities to ensure high-quality service at fair prices, reflecting the maturity of the sector's legislative environment.
Details of the new rules
The newly adopted regulations aim to enhance the efficiency of delivery and self-distribution processes within large facilities, while clearly defining the financial and technical responsibilities of all parties. These regulations apply to all "major users" as defined by the Authority's organizational classification, encompassing all requests for delivery, use, distribution, collection, and self-processing. The regulations define a major user as an entity whose consumption exceeds the established limits, whether for its own operational use or for self-distribution within a defined geographical area.
The Authority has obligated service providers to study the delivery requests for major projects and determine the necessary quantities within a period not exceeding thirty working days from the date of submitting the request, after which a “bulk purchase agreement” will be concluded that specifies the technical and financial obligations.
Accelerating development and infrastructure
To support development, the regulations allow the major beneficiary the option to bear the actual costs of infrastructure if the service provider fails to allocate budgets for the necessary projects or if the implementation schedule does not align with the beneficiary's plans. This is done through a binding agreement, with the beneficiary subsequently exempted from capital servicing costs, either wholly or partially, as fair compensation for the initial expenses incurred.
Protecting the end consumer and controlling prices
One of the most important aspects of the new regulations is the protection of consumers within residential and commercial complexes. The authority has mandated that those wishing to self-distribute their water supply must contract with a specialized and licensed operator to manage the system. It has also required the establishment of an independent accounting system and accurate internal billing based on separate meters for each unit to ensure fairness.
The rules categorically prohibited the sale of water inside or outside the facility without a license, and stressed the need for the major beneficiary to adhere to the retail water prices for internal beneficiaries according to the values approved by the authority, to ensure that the end consumer is not exploited by raising prices.
Expected impact and oversight
This regulation is expected to create investment opportunities for specialized operation and maintenance companies and improve water quality in the internal networks of residential complexes, which previously suffered from a lack of direct oversight. To ensure compliance, the authority has granted service providers broad monitoring and inspection powers, promising deterrent penalties including service suspension in cases of illegal connections or meter tampering.
