PRIVATIZATION AS A FINANCING ALTERNATIVE FOR DESALINATION PLANTS IN BAHRAIN

Production cost in the desalination plants remains to be a major const raint on the development and promotion of the water processing industr y. Water is heavily subsidized in those countries where the only sourc e of water for domestic supply is desalinated water. Searching for cos t reduction measures, essentially involves analysis of the financing s ystem under which a desalination plant is constructed, operated and ma intained. In Bahrain, where natural water resources are extremely limi ted and fresh groundwater of requisite quality is becoming scarce, des alination of water is ranked as a must. The desalinated water is blend ed with groundwater to provide a domestic supply within the necessary quality Limits. However, to keep pace with increasing demand and minim ize the need to draw water from the aquifer, new desalination plants a re required. In this paper the authors discuss the role of privatizati on as a financing alternative in the desalination industry in Bahrain, and its influence on the production cost. Available data from the exi sting operated plants in Bahrain throughout the past fifteen years are analyzed with a view to assert this possibility.