VZCZCXRO0901
PP RUEHDE
DE RUEHJI #0407/01 1581254
ZNY CCCCC ZZH
P 071254Z JUN 06
FM AMCONSUL JEDDAH
TO RUEHC/SECSTATE WASHDC PRIORITY 9221
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUEHAM/AMEMBASSY AMMAN PRIORITY 0239
RUEHLO/AMEMBASSY LONDON PRIORITY 1408
RUEHFR/AMEMBASSY PARIS PRIORITY 1486
RUEHRH/AMEMBASSY RIYADH PRIORITY 6551
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/DIA WASHDC PRIORITY
RHEHAAA/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 JEDDAH 000407 
 
SIPDIS 
 
SIPDIS 
 
RIYADH, PLEASE PASS TO DHAHRAN; DEPARTMENT FOR NEA/ARP; 
PARIS FOR ZEYA; LONDON FOR TSOU; AMMAN FOR WHITTLESEY 
 
E.O. 12958: DECL: 07/06/2016 
TAGS: EAIR ECON KISL KWMN PREL SA SENV SOCI TBIO
SUBJECT: JEDDAH JOURNAL 13:  NEW DIRECTOR FOR SAUDIA; 
POLLUTION AND DISEASE THREATS IN JEDDAH; NEW WOMEN'S CENTER 
DIRECTOR; PRIVATIZATION, IPO'S, AND CITIBANK IN SAUDI 
 
REF: A. JEDDAH 386 
     ¶B. JEDDAH 269 
 
Classified By: Acting Consul General Hector Morales, for 
reasons 1.4 (b) and (d). 
 
 NEW DIRECTOR FOR SAUDIA 
 
¶1.  (U) On the morning of June 7, Saudi media carried a 
report that by Royal Decree Khaled Abdullah Al-Mulhim, who 
was Chief Executive Officer of Saudi Telecom Company until 
February, has been named the new Director General of Saudi 
Arabian Airlines (Saudia).  Mulhim has an engineering degree 
from Indiana University.  The royal message says Khaled 
Abdullah Ben Bakr, who has been the Director General of 
Saudia for the last four years, was relieved of his duties at 
his own request.  Nevertheless, the media speculates that 
this move is part of the recent decision (reftel A) by the 
Saudi government to accelerate the schedule to privatize 
Saudia.  During Mulhim's term at Saudi Telecom, he presided 
over the partial privatization of that concern to favorable 
reviews.  Press reports also document a serious decline in 
morale among Saudia employees as rumors concerning 
privatization-related personnel cut-backs spread. 
 
RENOVATIONS AT KAA AIRPORT TO BEGIN SOON 
 
¶2.  (U) In May the Saudi Civil Aviation Authority announced 
that a new phase in the renovations and expansion of King 
Abdul Aziz International Airport would begin within 60 days. 
When completed, the plan is expected to increase the 
passenger capacity of the two terminals at the airport by 
50%. 
 
JEDDAH SEWAGE POLLUTES RED SEA 
 
¶3.  (U) Last week the waters off the elegant Jeddah Corniche, 
site of many major international hotels and expensive shops 
and restaurants, as well as a number of palaces occupied by 
Saudi royalty, were fouled by a several kilometer-long plume 
of sewage spewing untreated from Jeddah's decrepit sewage 
system (reftel B).  The effluent was clearly visible from the 
luxury hotels lining the lagoon.  In the scorching heat of 
Jeddah, other evidence of the proximity of the effluent was 
readily apparent to the noses of people at some distance from 
the polluted shore. 
 
INTERIM SOLUTION TO THREAT OF COLLAPSING LAKE OF 
SEWAGE--ANOTHER LAKE OF SEWAGE 
 
¶4.  (U) Jeddah authorities have been aware of the 
deficiencies of the Jeddah waste-water treatment system and 
are engaged in a multi-billion Saudi Riyal (SR) plan to 
replace the system (reftel B).  The most threatening 
component of this system is a large lake or reservoir of 
untreated sewage located about 20 km north of the city.  This 
sewage lagoon is delicately known among the municipal 
authorities as the "perfume" lake, and less delicately know 
by the general population as the "musk" lake.  This 
"facility," if the term can be applied to such a structure, 
receives approximately 8,000 truckloads of raw sewage every 
day.  There has been growing concern in recent years as the 
burden on  the lake has increased along with Jeddah's 
population and as engineering studies raise questions about 
the stability of the structure holding back the waste water. 
It is now feared that the dam could be over-topped and 
collapse and flood large portions of Jeddah.  The authorities 
recently announced their short-term solution--another lake of 
sewage. 
 
SOLUTION WILL RAISE ITS OWN PROBLEMS--A GREATER POTENTIAL FOR 
DISEASE 
 
¶5.  (U) In order to reduce the pressure on the musk lake 
until the new sewage system is completed in five years, the 
authorities have decided to construct a new lake 12 km north 
of the current one.  Under the interim plan, the new lagoon 
will be connected to the current one by a pipeline.  This 
pipeline will first transfer the waste water to a 
desalination plant.  After desalination, according to 
 
JEDDAH 00000407  002 OF 002 
 
 
officials, the water will be clean and used as non-potable 
water, for irrigating parks in Jeddah and possibly in a 
Safari Park to be constructed in the vicinity.  However, 
health specialists have voiced the concern that the solution 
to one problem will contribute to the worsening of 
another--Dengue Fever.  Health researchers pointed out that 
the relatively clean water contained in the second lake is 
exactly the type of medium in which the mosquito species that 
caries Dengue Fever thrives.  Consequently, the already 
serious Dengue Fever problem in Jeddah could be intensified. 
 
NEW DIRECTOR OF WOMEN'S CENTER.  OLD DIRECTOR TO BE TAPPED 
FOR GOVERNMENT POSITION? 
 
¶6.  (U) Consulate Jeddah Political Assistant was informed by 
contacts that as of May 27, Dr. Basma Omair had been named 
the General Manager of the Khadija Bint Khaolied Center for 
Women at the Jeddah Chamber of Commerce and Industry.  Dr. 
Omair is a member of the socio/economic circle of the Mecca 
Emara and of the Young Arab Leaders.  She obtained her Ph.D 
in Educational Technology in 2004 from a university in the 
United States.  The former director, Dr. Nadia Ba'ashen is 
rumored to be under consideration for a high-ranking position 
with the Saudi government. 
 
PRIVATIZATION AND IPO'S CONTINUE DESPITE UNSETTLED STOCK 
MARKET 
 
¶7.  (U) Despite the fluctuations in the Saudi stock market 
the government continues to pursue privatization and private 
companies announce initial public offerings (IPO's).  On June 
7, Saudi papers carried the following notices:  The 
government-owned Saline Water Conversion Corporation (SWCC), 
which operates 30 or more desalination plants on the Red Sea 
and Gulf, will be privatized by the end of the year.  Since 
November 2005, the Saudi government has also announced a 
number of public-private agreements with Saudi and 
international consortia to construct new desalination plants. 
 The day's papers also contained an announcement that Inmaa 
Bank, whose foundation was approved by Royal Decree as 
recently as March 28 of this year, would sell 70% of its 
equity in an IPO in the 4th quarter of this year.  Three 
Saudi government entities, the Public Investment Fund, the 
Pension Fund and the General Organization for Social 
Insurance will each retain a 10% share in the institution. 
Comments accompanying the announcement indicate that the King 
decided on privatization in order to give the investing 
public more stock choices. 
 
HOW WILL CITIBANK'S RETURN BE MET? 
 
¶8.  (C) Recently, Citibank announced that it was considering 
returning to Saudi Arabia.  In a conversation with Pol/Econ 
Chief, an official of SAMBA, the former Saudi American Bank, 
in which Citibank was a major partner,  questioned how well 
they would be received.  In the wake of the rising terrorist 
threat in Saudi Arabia, Citibank divested itself of its SAMBA 
holdings under conditions which were injurious to SAMBA.  The 
official says that it took SAMBA several years to recover its 
stability and a great deal of bitterness remains among Saudis 
associated with the financial sector at Citibank's 
precipitant withdrawal and, some say, disrespectful treatment 
of Saudis. 
 
Morales