UAE population growth water-tight case for desalination: report

The UAE’s rapid economic and population growth over the last couple of decades has put immense pressure on its water resources. Currently, the country has a population of 5.1 million, and continues to grow at a rate of 3.28 per cent.

To meet the water demands of this escalating population and improve water connectivity, the government is looking at viable options such as desalination and infrastructure development.

New analysis from Frost & Sullivan finds that the market earned revenues of $2.75 billion in 2011 and estimates this to reach $5.61 billion in 2015.

The infrastructure industry in the UAE grew by over 3.3 per cent in 2010 and is attracting huge investments. While the Northern Emirates are witnessing significant growth in the real estate sector, cities like Dubai and Sharjah are upgrading to smart cities and planning mega projects.

Further, to establish itself as a tourist destination, the UAE is upgrading its infrastructure with world-class facilities, comprising efficient road networks, superlative telecommunications facilities and affordable electricity and water. These developmental activities translate to greater demand for water, even as the reserves of fresh water are running low.

The total desalination installed capacity in the UAE is 8.9 million litres per day (MLD), and is expected to expand at a higher rate with many of the emirates turning towards privatisation. The government is looking for 100-per cent water connectivity to all the UAE residents by 2012; hence, investments in water distribution are anticipated to increase.

“The rise in oil prices facilitates investments in the infrastructure of water and wastewater projects,” said Frost & Sullivan Environment and Building Technologies Analyst. “If oil prices remain firm, the UAE is likely to record surplus revenue, which can be utilised for economic diversification.”

Large industries and municipalities mostly outsource the water and wastewater treatment plant services as they can afford the high capital and operational costs. Due to low product differentiation, market participants tend to resort to competitive pricing to standout in the market.

Customers in the UAE are highly price sensitive but expect treatment systems to be fully compliant to their needs. They also look for prompt after-sales service and technical support.

“Reliability and efficiency are the other key factors considered by end users while choosing water and waste water equipment suppliers,” noted Frost & Sullivan Analyst. “Further, a company that provides complete solution and lowers the operational cost to the end user will occupy the central position in the market.”

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