Saudi Arabia expects the cost of a giant power and water desalination project to be 20-25 percent below initial estimates partly because the price of materials have fallen, the Saline Water Conversion Corporation's top executive said.

The project, in Ras Azzour, had been estimated to cost $6 billion when Japan's Sumitomo Corp led a consortium to build and operate the plant. Sumitomo said in May it had put on hold its consortium's plans for the plant.

"We expect the price to be less than the contractor's projections back then... 20 percent... maybe more... the average is between 20 and 25 percent," Fuhaid bin Fahd Al-Sharif told reporters on the sidelines of an industry meeting in the industrial city of Jubail.

Al-Sharif declined to give a figure but said the lower cost estimate was due to a drop in the price of materials and because the project description had changed.

The Ras Azzour power and water plant will produce 2,400 megawatts of electricity, which is more than under the original plan.

SWCC said on Saturday that it would invite bids in mid-November for the project. - Reuters