VISION 2030

PRIVATISATION DRIVE OF SAUDI GATHERS PACE

The National Centre for Privatization and Public-Private Partnership (NCP) is one of the key vision realisation programmes (VRPs) that will play a critical role in helping Saudi Arabia achieve its Vision 2030 goals.

Launched by the Council of Economic and Development Affairs (CEDA) to attain the objectives of Vision 2030, the programme seeks to support the national economy’s development, and enhance the private sector’s role in unlocking government assets for investment. This will improve, in general, the quality of services provided, as well as reduce costs. Furthermore, it will strengthen the government's focus on its legislative and regulatory role. In addition, the programme seeks to attract local and foreign direct investments.

NCP is focused on privatisation and the development of a pipeline of PPP opportunities across 16 sectors.

The achievement of these objectives will contribute to realising the kingdom's Vision 2030, improving the balance of payments, and increasing private sector's contribution to GDP from 40% to 65%. It is worth noting that the National Development Fund is making progress in the establishment of a new National Infrastructure Fund.

“The fund will accelerate delivery of the kingdom’s critical infrastructure projects by facilitating increased levels of private sector participation. The fund's role will complement NCP's by providing financing support to crowd-in private sector capital,” the NCP said.

  

The private sector is being asked to participate in a number of projects.

In June, Al Madinah Region Development Authority (MDA), in collaboration with the NCP launched the expression of interest (EOI) phase for Al Madinah Bus Rapid Transit (BRT) Project.

“The BRT project is an initiative of the Pilgrim Experience Program, one of the kingdom's Vision 2030 programmes. Al Madinah has experienced a considerable increase in population and the number of visitors and pilgrims visiting the Holy City. This increase has led to a high vehicle ownership rate and a preference among residents for the use of private automobiles as the primary mode of transport resulting in congestion throughout the day,” the NCP said.

In partnership with the private sector, the design, build, finance, operate and maintain (DBFOM) model, comprises three corridors in Al Madinah: connecting the city to landmarks such as Ohud to Quba Mosque, the Prince Mohammed Bin Abdulaziz International Airport passing by the Prophet's Mosque, the Miqat Mosque and East Terminus of Al-Qassim road to Prince Abdul Majeed Mosque.

“Additionally, there are feeder bus networks of 3-kilometre loops around stations with a fleet of about 160 buses connecting passengers to the BRT and priority bus service. Finally, the circulator bus fleet consists of about 28 buses operating in defined residential zones with the primary purpose of connecting passengers from their residence to the rapid transit network,” the NCP said. “The project is expected to be the first BRT network in KSA in partnership with the private sector and the only one in Al Madinah serving the residents of the city as well as the Hajj and Umrah pilgrims.”

The Saudi Ports Authority (Mawani) and NCP also recently launched an EOI for marine services project for eight major commercial and industrial ports.

“The long-term agreements will be awarded to experienced private sector companies through a competitive procurement process, in accordance with the Private Sector Participation (PSP) Law,” the companies said. “The agreements will include basic marine services such as anchorage, pilotage, towage, berthing and unberthing and mooring, as well as additional services such as pollution control, firefighting, etc.”

   

To encourage investors, NCP approved the PSP Law Implementing Regulations.

With the approval of the new regulations, a main supporting pillar has been added to the PSP regulatory ecosystem that will increase the number of projects, speed up procedures and processes, and mitigate risks, the NCP noted.

“In addition, it will encourage investors to increase their participation in tendered opportunities and play a wider role in economic development, and increase private sector contribution to GDP, thus achieving Saudi Vision 2030 goals in unlocking state-owned assets to the private sector, and privatising selected government services.,” NCP said.

These reforms should help the country achieve its privatisation drive and unlock growth, create jobs, and attract new investments into the economy.