Saudi Arabia has established privatization Supervisory Committees (SCs) with a definitive mandate to function as executive facilitators for multiple sectors which are to be privatised over the next 10 years.

The committees, annnounced by the Cabinet yesterday (Aug 1), will work in tandem with the National Center for Privatization & PPP (NCP), an agency established in April this year.

The NCP, alongwith the Supervisory Committees, today set out the blueprint to ensure the efficient and strategic transfer of the kingdom’s government assets to the private sector.

The sectors included in the Vision 2030 under the Privatization Programme are: environment, water and agriculture; transport; energy, industry and mineral resources; labor and social development; housing; education; health; municipalities, telecommunication and information technology and Haj and Umrah services.   

The role of each committee is to assess the technical, financial, legal and regulatory landscape and to establish a best practice blueprint for the privatization of the targeted entities.

The Ministry of Finance, a permanent member in all the SCs, will also play a crucial role in the privatization process.

The NCP will serve as a permanent member of all SCs, providing strategic guidance and support as the committees move to enhance Saudi Arabia’s economy by recruiting private sector participation through asset privatization and the formation of new public-private partnerships.

It is anticipated that the privatization process will increase the private sector’s contribution to national GDP from 40 per cent to 65 per cent.

The NCP and the SCs are the first entities of their kind in the Mena region. They have been established to meet the core objectives of the privatization effort: improving the efficiency and competitiveness of the national economy, thereby boosting the quality of life for the Saudi people through stimulation of the private sector, improving the overall business environment, increasing job opportunities for Saudi nationals, reinvigorating the kingdom’s rich mineral resources sector, developing renewable energy capacity, investing in workforce and education development and diversifying the economy, a NCP statement said.

The first step in this process is to establish a world-class centre of excellence to facilitate and regulate the sale of state assets and entities.  

“NCP has adopted a wide-ranging governance policy that will enable government agencies and hold each accountable as we move forward with stimulating private investment and privatization,” said Turki A Al Hokail, CEO of the NCP.

The NCP will formulate regulations, create privatization frameworks and prepare robust processes that will serve as a blueprint for agencies and entities to follow that will ensure the efficient sale of Saudi assets and to drive the privatization process forward.

“We will facilitate the smooth transfer of assets by publishing a blueprint that will deepen communication channels between government agencies, citizens and the private sector locally, regionally and internationally and serve to guide investors and participating agencies and entities through the privatization process," he said.

“NCP was established with the purpose of setting policies, strategies, programs, bylaws, plans and tools to achieve the privatization projects objectives, thus suggesting the sectors and activities that may be privatized. The center will also set necessary standards and frameworks for sectors targeted for privatization, set principles which help the management of privatization-related projects, develop requirements to establish entities where the private sector – from inside and outside the kingdom – may participate with government entities in the launched privatization projects," said Al Hokail.

"NCP will work with the sectors targeted for privatization to ensure their technical and financial readiness. The center will work to assess the readiness of the macro economy of the privatization programs and contribute to managing related risks. It will work with its counterparts to identify key performance indicators related to privatization. In addition, NCP will be contributing to the training and qualification of human capital in the field of privatization to guarantee leveraging their abilities and expertise to achieve development objectives," he added.

NCP was established through the Council of Ministers Resolution on April 3, 2017 and is responsible for executing the privatization of certain government entities, a priority identified as part of the Saudi Vision 2030.  - TradeArabia News Service