Mahmoud Fallatah, CEO, Nesma Water • Interview
Nesma Water is working on the first green energy-assisted reverse osmosis plant in the region, just the latest feather in its already impressive cap.
How did you lead your organization through the pandemic and on to a recovery?
COVID-19 was of course unique; different rules and regulations were emerging by the day and affecting the market. From an operational perspective, our first important criteria was business continuity. Every company wants to ensure their business will continue regardless of the magnitude of the crisis. We began thinking about how to ensure business continuity and benefit from some of the regulations the government has put in place in order to help and support the private sector. Fortunately, at this time our businesses are mainly in utility, which is always required by society. Some of our projects are operation and maintenance projects. We operate water and electrical plants, utilities, and projects that have to continue the way they have been. There were some minor adjustments in terms of manpower, timing, and supplies. We had to ensure we had enough of the mandatory supplies that we needed delivered. We took extra care so that in the event of any emergency or total lockdown, our operations would not stop. Fortunately, we went through this successfully. None of our plants, customers, or clients were impacted significantly. Some of our projects are construction projects, and for some of those we saw closures as a response to client instructions and regulations; however, most of our construction sites continued to work. Still, that does not mean work continued on the same path or activity rate. Productivity was reduced, and travel from one area to another or from site to site was limited. That affected us, and in some areas the procurement processes or supplies from vendors were delayed because of transportation. In some cases, we used to source from international markets, and that came to a halt. Then, we needed to look for different substitutes. This definitely affected the productivity rate. However, overall, the impact was manageable, and we are already back to nearly 100% with all sides operational. We have also won along with our consortium members a major contract for the Yanbu-4 Independent Water Plant (IWP), which will be the first green energy-assisted reverse osmosis plant in the region. We are extremely proud of this, and it demonstrates that the Kingdom has handled the pandemic well and is on its way back to normal, or even better. We also expect an additional new contract award in the PPP projects type soon.
How does the Yanbu project represent the future for you?
The Yanbu-4 Independent Water Plant is developed on a build-own-operate model together with a consortium including Engie and Mowah. The project will contribute SAR1.5 billion to the Kingdom’s GDP and is the first project to be developed in the country under the PPP model. The project is 100% owned by the private sector. This is all interesting for us, and it certainly represents a new era of business. Commercial operation will begin in late 2023, and we expect to demonstrate our competence in the intervening time. The project is also standard-setting for the Kingdom because it is the first to include a solar energy component that will reduce reliance on grid energy for the desalination process. This is a major milestone that we are proud to be a part of.
What were some of your achievements during the 12 months prior to the COVID-19 outbreak?
The water and energy sector has reformed, and all the plans brought for the market—privatization, PPPs, and the transformation of the sector from the normal EPC way of doing business—have all changed. The plans were communicated well, but what was truly different this time is the fact that the plans are being implemented clearly and sharply. Several tenders were launched, and bids were submitted and evaluated. The decisions were made within the same time spectrum, and financial closings have taken place quickly. All this is an important reflection of the market.