The Basic Law of the National Water Company

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  • Royal Decree No. (M/1)

  • Date: 13-01-1429 AH

  • We, Abdullah bin Abdulaziz Al Saud

  • King of the Kingdom of Saudi Arabia

  • Based on Article (2) and Article (52) as amended of the Companies Law, issued by Royal Decree No. (M/6) dated 22/3/1385 AH.

  • After reviewing the aforementioned law and its amendments.

  • After reviewing Council of Ministers Decision No. (5) dated 12/1/1429 AH.

  • We decree the following:

    • First: Approval of the license to establish (National Water Company) in accordance with its attached Articles of Association.

    • Second: Approval of the provisions contained in Articles (4, 7, 15, 16, 23, 38, and 39) of the company's Articles of Association.

    • Third: Companies established by this company may be exempted from some provisions of the Companies Law, by a decision of the Minister of Commerce and Industry.

    • Fourth: His Highness the Deputy Prime Minister and the Ministers - each within his jurisdiction - shall implement this decree.

    •  

  • Council of Ministers Decision No.: (5)

  • Date: 12-01-1429 AH

  • The Council of Ministers

  • After reviewing the correspondence received from the Diwan of the Council of Ministers under No. 23954/B dated 26/5/1428 AH, including the letter of His Excellency the Minister of Commerce and Industry No. 737/M.W dated 29/10/1427 AH, accompanied by a copy of the letter of His Excellency the Minister of Water and Electricity No. 1554/4 dated 18/9/1427 AH, containing a request for approval to license the establishment of the National Water Company (a closed joint-stock company) wholly owned by the state represented by the Public Investment Fund in accordance with its attached Articles of Association, and to exempt it from some provisions of the Companies Law as detailed in his letter.

  • After reviewing the aforementioned Articles of Association.

  • After reviewing the Companies Law, issued by Royal Decree No. (M/6) dated 22/3/1385 AH, and its amendments.

  • After reviewing the recommendation of the Permanent Committee of the Supreme Economic Council No. (18/28) dated 8/3/1428 AH.

  • After reviewing the minutes No. (421) (422) dated 26/10/1428 AH, No. (451) dated 16/11/1428 AH, and No. (478) dated 29/11/1428 AH, prepared by the Experts Authority.

  • After reviewing the recommendation of the General Committee of the Council of Ministers No. (808) dated 28/12/1438 AH.

  • It is decided as follows:

    • 1- Approval of the license to establish (National Water Company) in accordance with its attached Articles of Association.

    • 2- Approval of the provisions contained in Articles (4, 7, 15, 16, 23, 38, 39) of the company's Articles of Association.

    • 3- Companies established by this company may be exempted from some provisions of the Companies Law, by a decision of the Minister of Commerce and Industry.

    • A draft Royal Decree has been prepared accordingly, its text is attached hereto.

    • 4- The company shall, in stages determined by the Ministry of Water and Electricity, provide and deliver all services of the groundwater sector, drinking water distribution sector, sewage collection and treatment sector affiliated with the ministry on sound commercial bases. The company shall collect all its dues, including fees for its services, on their specified dates and regularly from all subscribers without exception, and shall also pay all its due obligations.

    • 5- All rights and properties of the state related to these sectors shall be transferred to the company, according to the stages determined by the Ministry of Water and Electricity.

    • 6- All financial and contractual obligations of the state related to these sectors shall be transferred to the company according to the stages determined by the Ministry of Water and Electricity.

    • 7- The Ministry of Water and Electricity shall supervise the company’s performance of services in these sectors in accordance with its Articles of Association and the relevant laws and regulations.

    • 8- The Ministry of Water and Electricity shall study the cost of producing water and delivering it to the company’s distribution networks and the value of the company’s purchase of this water in light of the tariff the company is permitted to collect and the costs of the company fulfilling the obligations stipulated in its Articles of Association. Until this is completed, the state shall commit to supplying the company with its drinking water needs.

Chapter 1: (Establishment of the Company)

Article 1: Name of the Company

A Saudi joint-stock company is established under this law, named the National Water Company, hereinafter referred to in this law as (the Company).

Article 2: The Company's Head Office

The company's main office is located in Riyadh, Saudi Arabia, and the company has the right to establish branches, offices, or other agencies within or outside the Kingdom.

 

Article 3: Purposes of the Company

  • The purposes of the company are to provide services for the extraction, production, purification, treatment, and distribution of water, as well as the treatment and purification of wastewater in the Kingdom of Saudi Arabia, to contribute to the training and qualification of national human resources, to employ the national workforce, to prepare the capabilities and facilities for rehabilitation, research, and development, to transfer, localize, and develop technology. The company has the right to undertake all actions and activities that assist it in achieving its purposes, including but not limited to the following:

    • 1- Extracting, producing, purifying, and treating groundwater, as well as treating and purifying wastewater, and all related construction, management, operation, and maintenance works.

    • 2- Transporting water to subscribers, selling it, and distributing it to them.

    • 3- Establishing water and wastewater networks and treatment plants, developing, operating, managing, and maintaining them.

    • 4- Preparing the necessary plans and studies for the development, implementation, and provision of water and wastewater services in the Kingdom from all technical, financial, and administrative aspects.

    • 5- Purchasing water from various sources deemed appropriate.

    • 6- Engaging in all practices aimed at investing its assets and increasing its revenues.

    • 7- Purchasing, owning, leasing, and renting tangible and intangible assets.

    • 8- Commercial representation and commercial agencies related to the company's activities.

    • 9- The right to delegate others to fulfill any of its obligations related to achieving its purposes in providing services in the groundwater sector, the drinking water distribution sector, and the collection and treatment of wastewater.

  • It also has the right, in order to achieve its purposes, to undertake all necessary actions, regardless of their type, whether related to real estate or movable property.

  • The company conducts its activities after obtaining the necessary licenses.

Article 4: Subsidiary Companies

The company may establish or own other companies independently, adopting one of the legal forms of companies. The regulations of the companies it establishes may include all or some exceptions from the Companies Law provided in this law. The company, in accordance with the relevant regulations, may own shares or stakes in existing companies or merge with them.

Article 5: Participation with Others

The company may have an interest in, establish, or participate in any manner with other Saudi and foreign companies, institutions, or entities that engage in similar or complementary activities to its own, or that may assist it in achieving its purpose, or to purchase all or part of them.

Article 6: Duration of the Company

The duration of the company is ninety years, starting from the date of issuance of the royal decree that licenses its establishment. This duration may be extended for a similar period or for longer or shorter periods, by a decision issued by the extraordinary general assembly before the expiration of its term.
The company is considered established by law and enjoys independent legal personality from the time of issuance of the royal decree licensing its establishment.

Chapter 2: (Capital and Shares)

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