- In the early seventies the major problem facing the desalination production was the high cost of the initial capital investment for construction,operation, and high energy consumption. Advances in desalination technology over the past 20 years have resulted in higher efficiency and a consequent decrease in the cost of desalinated water from about $3.5 in 1979 to $0.55/m3 in 2000. In Saudi Arabia at zero interest rates, production costs from MSF units ranges $0.26– 0.98/m3 while from RO units ranges $0.47–0.48 depending on the size of plant. In the UAE the average cost for MSF ranges $0.67–1.64 while for seawater RO plants ranges $0.64–2.4/m3. The dominant cost element on seawater RO desalination is the energy consumption which accountsfor about 50% of the total cost. Fig. 3 shows the reduction of desalinated water cost overtime in the UAE [8]. The analysis of actual bids data for large MSF desalination plants indicate a large variance of the capital cost influences the unit water cost over plant life. For dual propose plants, cost allocations between water and power provides an opportunity of cost sharing on unit water cost