Plans by Oman’s government to restructure the water sector could ultimately result in the establishment of a formal independent regulator for the sector akin to the regulatory authority that currently oversees the Sultanate’s strategically vital electricity services industry, say experts. Various public sector stakeholders are presently making common cause with the government in developing a blueprint for the restructuring of the water sector, encompassing not only potable water desalination and distribution, but also wastewater services and water resources in general.
Leading the exercise is Nama Group — the holding company of state-owned power generation, transmission, distribution and supply utilities — which is in the process of appointing an international consultant to provide advisory services on the revamp of the sector.
The Public Authority for Electricity and Water (Diam), which has the principal mandate to oversee supply and distribution of potable water across much of the Sultanate, is also playing a key part in the restructuring exercise. Diam sits on a high-level Water Sector Restructuring Committee, which represents all of the key stakeholders in the water and wastewater services sector in the Sultanate.
According to Diam, the restructuring exercise led by Nama Holding has already made initial headway. Consultants appointed by Nama to chart a preliminary outline of the restructured sector completed their work late last year.
“Phase One of the water and wastewater restructuring study was completed during the year (2016), which will develop the regulatory framework for the sector and develop the operation through the establishment of new companies, with the option to merge them with the wastewater sector,” said Dr Abdul Malik bin Abdullah al Hinai, Chairman of the Board of Directors of Diam.
The new structure, when eventually approved by the government, will introduce “formal economic regulation to the sector”, said Diam, noting that it is continuing to develop its own internal ‘shadow regulation’ framework in preparation for this eventuality.
Additionally, in exercise of its powers vested in it under the Sector Law, Diam has revealed that it plans to introduce a system of licensing private operators of water networks with a view to enhancing regulation of these services.
“It has been apparent for some time that the current situation regarding the operation of private water networks is poorly controlled. As a consequence, the Authority is in the process of developing a system of licences for the various categories of private water networks. These licences will improve customer protection and clarify the rights and responsibilities of the various parties ahead of the introduction of a formal independent regulator for the sector,” Diam stated in its recently published 2016 Annual Report.
A number of international firms are bidding for Nama Holding’s contract for the provision of advisory services to the government on the restructuring of the water and wastewater services industry in Oman.