ECONOMY

Saudi Arabia releases draft of Private Sector Participation Law

The draft law allows for greater flexibility in owning real estate outside Mecca and Medina. (Shutterstock)

In line with the objectives of Saudi Vision 2030 to increase the contribution of the private sector to GDP from 40 percent to 65 percent and as part of the Kingdom’s continuous efforts to diversify the economy, the National Center for Privatization and Public-Private Partnerships announced Sunday the draft of the Private Sector Participation Law.

The draft law aims to organize partnerships between the government and the private sector in preparation to launch multi-billion dollar projects, and to attract new foreign investments to a range of sectors. It also aims to refocus the government’s role on legislative and regulatory matters.

The draft law exempts joint ventures with the private sector from some of the requirements of the labor law and some of the restrictions on real estate. As such, some companies will have more leniency in applying Saudization requirements.

The draft law also allows for greater flexibility in owning real estate outside Mecca and Medina and permits foreign ownership in joint projects with the government, in sectors such as healthcare and education.

Rights of private parties

In addition to the above, the draft law ensures the rights of private parties in projects, by stipulating non-interference of the government with the business of the private party.

It also protects the property of the private party from nationalization and ensures freedom of ownership, use, and disposal of the investment made under the PPP project. Private entities will also be entitled to the same treatment as national entities.

The new draft law also allows bidders to appeal PPP contracts by the government within a 10 day period though the government entity’s or the NCP’s website. The draft law comes after the adoption of the “Privatization Program” in April this year, one of the programs in place to achieve Vision 2030.

The “Privatization Program” highlights commitments for 2020 namely a contribution to GDP in the range of 13 to 14 billion Riyals, total government revenues from privatization in the range of 35 to 40 billion Riyals and net government savings of between 25 and 33 billion Riyals.

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Last Update: Saturday, 14 July 2018 KSA 18:10 - GMT 15:10
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