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11 March 2008 - The UAE will allow private sector companies to build and operate power and desalination plants that will help meet the country's growing needs for utilities.
"A federal draft law, which was approved by the cabinet, allows the private sector to establish and run water and electricity stations to face the increasing demand, especially in the large investment projects in the areas supervised by the Federal Electricity and Water Authority [Fewa]," said the Arabic Al Khaleej.
The draft law, which will be discussed by the Federal National Council (FNC), will introduce a new article to Federal Law No. 31 for 1999 regarding the setting up of the authority.
The new article states that the authority may allow private sector investors to set up power regeneration and water production stations in the areas supervised by the authority, according to laws and regulations issued by the Cabinet, and provided they comply with environmental standards and laws.
The FNC intends to amend article 23 by adding a condition that water and electricity tariffs must be under the authority's control.
Earlier discussions between the Public Facilities Committee at the FNC and Fewa officials reached the conclusion that demand over water and electricity increased beyond Fewa's expectations.
The authority's development plans were based on seven per cent growth, but the actual growth rate is 19 per cent.
The Fewa is mandated to supply water and electricity to the Northern Emirates, while Abu Dhabi Electricity and Water Authority (Adwea), Dubai Electricity and Water Authority (Dewa) and Sharjah Electricity and Water Authority (Sewa) controls utilities in Abu Dhabi, Dubai and Sharjah respectively.
While Abu Dhabi has partly privatised its utilities, Dewa and Sewa are yet to start the privatisation process.
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