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2026-10-09Key Facts: 2026年9月1日, with United Water as the lead party forming a consortium with Armada Holding Company, has officially signed the Saudi municipal wastewater long-term operation contract Package 10 (Northern Region, LTOM Package 10) with Saudi National Water Company (NWC) at its Riyadh headquarters, and has also won Package 11. The project covers 9 wastewater treatment plants in 8 cities across 4 provinces in northern Saudi Arabia, with a total treatment capacity of 33.78万 cubic meters per day, an operation and maintenance period of 15年, and an estimated total revenue during the operation period of 13.056亿 Saudi Riyals (approximately RMB 23.66亿 yuan). This is the first time NWC has awarded a long-term municipal wastewater treatment operation and maintenance contract to a consortium led by a Chinese water company.
I. Signing Ceremony: Senior Executives from Three Parties Witness Together
The signing ceremony was held at NWC's Riyadh headquarters, jointly signed by three representatives: NWC Chief Executive Officer Dr. Fuad bin Ahmed Al Sheikh Mubarak, United Water Director and Executive President Liu Meng, and Armada Holding Company General Manager Jamaan Al Jamaan. NWC attendees also included the Chief Financial Officer, Executive Vice President of Operations, Executive Vice President of Shared Services, Executive Vice President of Customer Service and Digital Transformation, and other senior executives. The high level of representation demonstrates the Saudi side's emphasis on this "first."
In his speech, the NWC Chief Executive Officer congratulated the signing of Package 10 and the winning of Package 11, and expressed the hope to establish a long-term partnership with United Water, conducting long-term cooperation in Saudi Arabia's wastewater treatment and reclaimed water reuse and other areas — the implications of this statement extend beyond this project, pointing to Saudi Arabia's broader future market for operating existing water assets.
II. Project Data Breakdown
- Coverage — 4 provinces and 8 cities in northern Saudi Arabia, totaling 9 wastewater treatment plants. Multi-plant packaging is a typical structure of international water O&M contracts, imposing far higher requirements on the operator's cross-regional scheduling and standardized management capabilities than single-plant operations.
- Treatment Capacity — Total capacity of 33.78万 cubic meters per day, representing a medium-to-large municipal wastewater asset package.
- Contract Term — Operation and maintenance period of 15年, of which the first 3年 is the non-shutdown rehabilitation period. This means the consortium must complete rehabilitation and upgrading while ensuring the continued operation of 9 plants, which is the most technically challenging phase of the project.
- Revenue Scale — Estimated total revenue during the operation period of 13.056亿 Saudi Riyals, equivalent to approximately RMB 23.66亿 yuan.
III. Scope of Work: Rehabilitation and Upgrading + Sludge Drying + Full-Cycle O&M
The project content goes far beyond "taking over operations," covering key stages of the asset's full lifecycle:
- Rehabilitation and Upgrading — Rehabilitation and upgrading of the processes, equipment, and pipe networks of 9 wastewater treatment plants, representing a typical quality improvement and renovation of existing assets.
- New Sludge Drying Facilities — This item deserves particular attention. Saudi Arabia previously had weak sludge disposal capacity at many wastewater treatment plants. The addition of drying facilities means that sludge reduction and harmless treatment has been formally included in the contract scope, aligning with the direction of Article 302 of China's "Ecological Environment Code" that "wastewater treatment fees should be used for harmless sludge treatment and disposal."
- 15年 Full-Cycle O&M — Ensuring that effluent, sludge, and environmental performance continuously comply with Saudi national standards, rather than only meeting standards at the acceptance point.
- Consortium Responsibilities — Overall responsibility for survey and design, investment and financing, construction, and full-cycle operation and maintenance. The project company is 100% held by the consortium.
IV. Payment Mechanism: Revenue Structure Composed of Three Parts
NWC pays service fees to the project company through three components: capacity revenue, output revenue, and standby revenue. This design is worth studying for domestic practitioners:
- Capacity revenue — payment for available treatment capacity, ensuring the operator's basic cash flow and giving it an incentive to maintain facility availability.
- Output revenue — payment for actual treated water volume and compliant effluent, linking revenue to real performance.
- Standby revenue — payment for standby capacity, reflecting pricing for system resilience and emergency response capability.
The combination of these three components avoids both the short-term behavior of "emphasizing construction over operation" and the operator sacrificing facility condition to cut costs. For domestic enterprises accustomed to a single "wastewater treatment service fee" model, this is a performance payment system with finer granularity.
V. Why It Matters: The Leap from "Engineering Output" to "Operations Output"
In the past, the mainstream model for Chinese environmental enterprises going overseas was equipment export and EPC engineering general contracting — once delivery was completed and acceptance passed, the contract was essentially fulfilled. Such projects involve considerable amounts, but revenue is recognized on a one-time basis, and the company does not participate in the operating returns of the asset over the following decades.
What United Water secured this time is a long-term O&M contract, which is entirely different in nature: 15年 stable cash flow, a revenue structure tied to performance, and a strategic position deeply embedded in Saudi Arabia's national water system. In Liu Meng's words, this is the first time NWC has awarded a long-term municipal wastewater treatment O&M contract to a consortium led by a Chinese water company — it proves that the capabilities of Chinese water enterprises have been recognized to the extent that "existing assets can be entrusted to them for fifteen years."
During the same period, there is another parallel technology route in the Middle East market: UK-based Bluewater Bio won the contract for upgrading the industrial wastewater treatment plant at MODON Jeddah First Industrial City, increasing treatment capacity from 25 MLD to 40 MLD (an increase of 60%), with its HYBACS process driven by 14 SMART units and 6 FilterClear tertiary filtration units, producing 24 MLD of tertiary treated water fed into the Reverse Osmosis / RO system for reuse. Two routes — long-term operations output by Chinese enterprises and core technology output by European and American enterprises — are competing head-to-head in the same market.
VI. Three Insights for Domestic Enterprises
- Existing asset operations represent a larger market — Saudi Arabia, the UAE, and other countries have already built a large number of wastewater facilities, and the demand for upgrading and long-term O&M may exceed the new-build market. The entry threshold for this type of market is operating track record and credit, not engineering qualifications.
- Localized consortia are a necessary path — United Water chose to form a consortium with Armada Holding rather than bid independently, reflecting a pragmatic consideration of local resources, policy understanding, and risk sharing.
- Sludge disposal has become a standard requirement — this project explicitly adds Sludge Drying facilities, consistent with the domestic reform direction of "wastewater treatment fees covering sludge disposal costs," indicating that sludge harmlessness has become a global compliance baseline, rather than an optional value-added item.
VII. TIANYI TECH's Perspective
TIANYI TECH believes that the significance of this contract lies in changing the shape of the revenue curve for Chinese water enterprises going overseas — from a pulse-like engineering revenue to a continuous fifteen-year operating cash flow. However, to succeed on this path, enterprises need to strengthen not only their overseas bidding capabilities, but also genuine operational hard skills such as multi-plant coordinated scheduling, repair without shutdown, and performance-oriented O&M. Whoever first establishes verifiable track records in these three areas will gain a head start in the Middle East's existing water asset market.
About TIANYI LIMITED
TIANYI TECH focuses on the fields of wastewater treatment, Reclaimed Water Reuse, and water resource recycling, providing one-stop services from process consulting, solution design, equipment integration, and engineering implementation to Smart Water O&M. The company is committed to promoting wastewater resource recovery through technological innovation, helping industrial enterprises and municipal clients achieve multiple goals including water conservation and carbon reduction, compliant discharge, and sustainable development.
Source: Compiled from reports by Guofu Consulting (2026年9月1日), Huasheng Tong (2026年9月2日), and China Tendering and Procurement Network on the signing of the LTOM Package 10 project contract between United Water and Saudi Arabia's National Water Company
