Schools and Wa­ter are Pri­or­i­ties as Saudi Launches Pri­vati­sa­tion Plan

EME Outlook - - News -

School build­ings and de­sali­na­tion fa­cil­i­ties pro­duc­ing fresh wa­ter will fea­ture in some of the first deals as Saudi Ara­bia trans­fers a quar­ter of its econ­omy to pri­vate hands.

Turki A. Al Hokail, Chief Ex­ec­u­tive of the Na­tional Cen­tre for Pri­vati­sa­tion and Pub­lic-pri­vate Part­ner­ships, was speak­ing as the Gov­ern­ment for­mally launched a vast pri­vati­sa­tion pro­gram, fo­cus­ing on 10 sec­tors of the econ­omy.

Riyadh is work­ing on new rules to at­tract for­eign as well as lo­cal cap­i­tal to the scheme and will ad­dress po­ten­tial in­vestors’ con­cern about their level of con­trol over projects, in­clud­ing their abil­ity to hire and fire work­ers, Hokail said.

“This is a big change in the econ­omy as the Gov­ern­ment is mov­ing from oper­at­ing projects to mon­i­tor­ing and reg­u­lat­ing them,” he added. “Op­er­a­tions will be the job of the pri­vate sec­tor.”

Riyadh an­nounced re­cently that it aimed to gen­er­ate 35 bil­lion to 40 bil­lion riyals ($9 bil­lion to $11 bil­lion) of non-oil state rev­enues from the pri­vati­sa­tion pro­gram by 2020; part of a drive to cut Saudi Ara­bia’s re­liance on oil ex­ports.

Some of the money is to come from as­set sales in sec­tors such as ed­u­ca­tion, wa­ter, telecom­mu­ni­ca­tions and health care. Some of those sales could oc­cur through ini­tial pub­lic of­fers of shares, while oth­ers might be direct trans­fers.

The rest of the money would come from pub­lic-pri­vate part­ner­ships (PPPS) deals in which pri­vate com­pa­nies in­vest in in­fra­struc­ture and are paid to op­er­ate it for a pe­riod, be­fore even­tu­ally trans­fer­ring it to the state.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.