PRIVATISATION

PRIVATISATION PROGRAMME GAINS GROUND IN SAUDI

The kingdom’s privatisation programme is accelerating, covering 200 projects in 17 sectors, with investments exceeding USD 50 billion, according to the Ministry of Finance.

The ministry is evaluating 300 projects within the privatisation programme, while 30 have been completed over the past five years.

The programme is part of the Saudi Visualization Program in line with Saudi Vision 2030. Launched in 2018, the programme aims to identify government assets and services that can be privatised across the economy, develop the privatisation system and its mechanisms, and define public and private sector partnership frameworks that generate jobs and economic growth.

The programme has already succeeded in developing general frameworks for the privatisation system with the launch of the Privatisation Law and the National Center for Privatization (NCP).

The centre regulates and facilitates the participation of private sector companies with business-friendly framework, and creates an attractive regulatory and investment environment that stimulates private sector investment in the short and long term.

NCP is developing the privatisation pipeline, which includes proposing sectors and government assets and services, that could either be privatised or improved through private sector participations.

“NCP is also charged with developing an efficient privatisation process the targeted sectors will follow to solicit and engage private sector participation as well as promote opportunities domestically and internationally,” according to the centre.

The centre boasts experts in the areas of legal, financial, advisory, strategy, communication, risk management, marketing, and project management as well as experts in the full spectrum of private sector participation.

“In the next phase, the programme will focus its efforts on continuing to build the aforementioned enablers and intensify work to enhance the role of the private sector in providing services, maximising the value gained from government assets, and raising the efficiency of spending,” according to the Privatization Program website. In addition, privatisation strategies will be developed in 16 sectors, including transport, health, education, municipal affairs, so as to enable the government to focus its efforts on legislative and regulatory issues.

 

ATTRACTING COMPANIES

The authorities’ move to encourage international companies to set up their regional headquarters in the kingdom, dovetails nicely with the government’s privatisation programme.

In March, the Council of Ministers launched a scheme titled “The Saudi Program to Attract Regional Headquarters of International Companies” under the supervision of the board of directors of the Royal Commission for Riyadh City.

Parallel to that development, the first wave of projects supported by the Private Sector Partnership Reinforcement Program (Shareek) was launched with a value exceeding SAR 192 billion. The move is a significant step in the programme’s march towards achieving its goals in terms of developing private sector investments, enhancing local content and boosting the kingdom’s GDP.

New opportunities are also coming on stream for the private sector. In February, the Saudi Ports Authority (also known as Mawani), in co-operation with the NCP, announced the list of consortiums and companies qualified to submit bids for the Saudi Ports Marine Services Projects in the Saudi Ports Authority, which covers eight major commercial and industrial ports in the kingdom.

“The project provides long-term agreements to provide core marine services in Saudi ports such as pilotage services, towing, berthing, and anchor area operations, as well as additional marine services such as pollution control, firefighting, and other services,” according to Mawani.

 

ROLE OF PRIVATISATION

Privatisation allows the government to focus on legislation and regulation, and help promote national economic development and diversification.

“It will bring further employment opportunities for the population as new economic opportunities for entrepreneurs and businesses are presented to establish and expand their operations,” according to The Euro-Gulf Information Centre.

In addition, opening up the economy to private and international players will lead to injection of fresh capital, new innovation and job creation,which will eventually lead to the provision of higher quality services and a reduction of costs.