MARAFIQ inks asset lease agreement with RCJY for SAR 1.8 mln annually

Power and Water Utility Company for Jubail and Yanbu (MARAFIQ) signed today, May 7, a new lease with the Royal Commission for Jubail and Yanbu (RCJY) for a group of assets in Yanbu Industrial City for SAR 45.6 million.

In a Tadawul statement, the company said the annual rent of the assets, in the event of full commercial operation, will be SAR 1.82 million for 25 years.

MARAFIQ noted that RCJY assets will increase the company's business reliability towards its customers, in addition to meeting the future demand for utility services.

The contract was awarded as per the Cabinet's resolution dated July 12, 1999, which provides that RCJY shall lease the basic equipment of services in Jubail and Yanbu industrial cities to MARAFIQ and the latter shall own these assets at the end of the lease term.

The company indicated that the contract duration is 25 years from the date it receives each of such assets, adding that RCJY is a related party.

MARAFIQ executed a master lease agreement with RCJY on Oct. 11, 2006, where the former received the basic equipment of services from RCJY at the time of the company’s incorporation.

The future lease of the basic equipment of services will be governed by the same mechanism mentioned in the master lease agreement and the rent commence from the launch of the commercial operations, provided that the rent is commensurate with the percentage of actual commercial operations of such service assets.

Accordingly. MARAFIQ signed a number of lease agreements with RCJY in its expansion sites in Jubail and Yanbu to meet the future demand of utility services or to increase the reliability of its business towards all its customers.