PRIVATIZATION AS A FINANCING ALTERNATIVE FOR DESALINATION PLANTS IN BAHRAIN

Production cost in the desalination plants remains to be a major constraint on the development and promotion of the water processing industry. Water is heavily subsidized in those countries where the only source of water for domestic supply is desalinated water. Searching for cost reduction measures, essentially involves analysis of the financing system under which a desalination plant is constructed, operated and maintained. In Bahrain, where natural water resources are extremely limited and fresh groundwater of requisite quality is becoming scarce, desalination of water is ranked as a must. The desalinated water is blended with groundwater to provide a domestic supply within the necessary quality Limits. However, to keep pace with increasing demand and minimize the need to draw water from the aquifer, new desalination plants are required. In this paper the authors discuss the role of privatization as a financing alternative in the desalination industry in Bahrain, and its influence on the production cost. Available data from the existing operated plants in Bahrain throughout the past fifteen years are analyzed with a view to assert this possibility.