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, an official overseeing the process said on Wednesday.
Turki A. Al Hokail, chief executive of the National Centre for Privatization and Public-Private Partnerships, was speaking as the government formally launched a vast privatization 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. The government is moving from operating projects to monitoring and regulating them,” he said in a telephone interview. “Operations will be the job of the private sector.”
Riyadh announced on Tuesday that it aimed to generate $9 billion to $11 billion (35 billion to 40 billion riyals) of non-oil state revenues from the privatization 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.
Hokail said Riyadh was willing in principle to consider sales of 100 percent stakes in state firms, but decisions on each deal would depend on investor demand and market conditions.
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.

Schools, water are priorities as Saudi launches privatization plan

Saudi Arabia, as part of its privatization plan, is willing to consider sales of 100 percent stakes in state firms, depending on investor demand and market conditions. (Reuters)
Reuters, Dubai
Wednesday 25 April 2018
Last Update: Wednesday, 20 May 2020 KSA 09:52 - GMT 06:52
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