New regulations from the Saudi Water Authority for selling services in complexes
In a regulatory move aimed at governing the water sector and enhancing its sustainability, the Saudi Water Authority a comprehensive regulatory framework outlining the rules for bulk procurement of water and wastewater services. This step aims to regulate the contractual and technical relationship between service providers and major beneficiaries, ensuring the rights of all parties and promoting transparency in cost accounting.
Strategic context and national vision
These new regulations fall within the objectives of the National Water Strategy 2030 , through which the Kingdom seeks to ensure the sustainability of water resources and enhance operational efficiency. The water sector in Saudi Arabia is one of the most vital sectors due to the country's geographical and climatic characteristics, making precise governance of distribution and consumption processes an urgent necessity, not merely a regulatory option. This move reflects the Authority's commitment to implementing the highest international quality standards in water resource management, keeping pace with the rapid urban and economic growth the Kingdom is witnessing under Vision 2030.
Details of the new rules for large beneficiaries
The regulations directly target the "large beneficiaries" category, as defined by the Authority's regulatory classification. This includes entities whose consumption exceeds standard limits, whether for their own operational use or for self-distribution within large residential and commercial complexes. The Authority has mandated that service providers review connection requests for these projects and determine the required quantities within a period not exceeding 30 working days, followed by the conclusion of a "bulk purchase agreement" that clearly outlines the financial and technical obligations.
Flexible solutions to accelerate development
To ensure that major development projects are not delayed by public budget constraints, the new regulations provide significant flexibility for investors and developers. The major beneficiary can bear the actual costs of the infrastructure required to deliver the service if the service provider does not have the necessary budget. In return, the beneficiary is exempted from capital servicing costs, either fully or partially, as a form of fair compensation. This incentivizes private sector investment in infrastructure and accelerates project completion.
Licensed operator requirements and billing
The authority has set a key requirement for complexes wishing to implement internal water self-distribution: they must contract with a specialized and licensed operator to manage the system. This requirement aims to ensure water quality and the integrity of the internal networks. The regulations also mandate the establishment of an independent billing system and the installation of individual meters for each internal unit to guarantee fair billing and prevent arbitrary estimates.
Expected economic and regulatory impact
This regulation is expected to have a tangible positive impact at both the local and economic levels. On the one hand, it will protect end consumers within residential complexes from price gouging, as the authority has emphasized adherence to approved retail prices. On the other hand, it will open the door for specialized operation and maintenance companies to expand in the market, creating new investment and job opportunities. Furthermore, the strict monitoring and penalties announced by the authority against violators will significantly reduce water waste and illegal connections, thus enhancing the Kingdom's water security.
