Utilities under Pressure

Qatar

Economic News

22 Jul 2010
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Qatar is paying an unexpected penalty for the hectic pace of its own development as contractors from around the world work against the clock to complete billions of dollars in projects. On many recent occasions workers have managed to cut through electricity and water lines throughout Doha.



In a region where water resources are scarce anyway and which is heavily dependant on electricity to run air conditioning to counter the affects of plus 40C temperatures, residents are anxiously anticipating the authority's plans to upgrade and increase supply as well as hoping for more careful construction labourers.



Residents of the Najma area of the city experienced over three days of water shortages and local restaurants were forced to close or offer only take-away service to their customers. The power cuts also affected cold storage facilities in some of the smaller, local restaurants throughout Doha.



The Qatar General Electricity and Water Corporation (Kahramaa) commissioned tanker services to supply water to the affected areas, supplying local businesses as well as 450 homes on a daily basis. Many businesses however have claimed that this is inadequate, as the measure only supplied enough water for half a day's operations.



The tanker operators have also been accused of charging an inflated price for water - with prices ranging from QR60 ($16.48) to QR450 ($123.61) per load. Shortages in both water and power supply have eaten into businesses profits and the local press announced that demand for bottled water more than doubled over the course of the week.



Kahramaa called for tolerance and announced that the power outage was due to damage to a power cable caused by construction work, while the water shortages affecting Doha were due to maintenance work on the corporation's Ras Laffan A plant.



These disruptions to power and water supply, however, are not isolated instances. In the first half of 2005, Kahramaa recorded 140 technical faults caused by third parties. In the first half of 2006, this had risen to 198 and in July alone the company recorded 67 third-party related blackouts. In most cases the blame has fallen on contractors who are currently working faster than ever to complete construction work in time for the Asian Games in December.



Meanwhile, demand for water is rapidly increasing and supply cannot keep pace.



The country, which currently consumes around 132m gallons of water a day, is seeing a boom in real estate development and a 5% average annual population increase.



Kahramaa has already completed phase one of it Al Nasria project, upgrading 21km of pipe network, and will begin the second phase in 2007. The corporation has also stated that March 2008 will see the completion of a project to augment distribution in Najma, Al Mansoura, Old Rayyan, Al Matar and Um Saeed Industrial City.



A pilot scheme for treated sewage effluent (TSE) from UAE-based wastewater specialist, Metito, will also go some way to augmenting water resources and will supply an alternative to the currently favoured desalination process.



Qatar's power grid will also require attention in order to meet increasing demand, which is currently growing at 8% a year. According to figures from Middle East Economic Digest (MEED), Qatar will require an additional 3,500MW by 2010 - more than double the country's current capacity.



At the end of 2005, Kahramaa announced an allocation of $1.1bn to electricity projects and in total, Kahramaa's four-year plan for major infrastructure projects in the electricity and water sector will see a total expenditure of $1.6bn.



Qatar is not alone in terms of rising demand on its electricity and water supplies. All the Gulf Cooperation Council (GCC) states are experiencing similar incremental demands on their resources. Consequently, plans for a GCC wide electricity grid have been warmly welcomed. The first phase of the grid is expected to start operation in 2008.


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