Saudi Arabian privatization plans accelerate with international tender to build 60 schools

As many as 60 schools are to be built in Saudi Arabia. (REUTERS)
Updated 17 January 2018
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Saudi Arabian privatization plans accelerate with international tender to build 60 schools

DUBAI: The Saudi Arabian privatization program, a crucial part of the Vision 2030 strategy, is gathering pace with the launch of a tender to the private sector to build 60 new schools for children in the Jeddah and Makkah areas.
In a further sign of progress toward the sell-off of government controlled parts of the economy, it was also announced that the flour milling companies owned by the Saudi Grain Organization (SAGO) could be ready for sale in the first half of this year.
The schools announcement was made by Tatweer Buildings Company (TBC), a government owned company involved in all aspects of educational infrastructure. No value is put upon the contract in the tender documents.
HSBC, the global bank involved in many aspects of the Saudi privatization plan, is financial adviser to TBC. A bank spokesman said the tender was open to Saudi and international bidders.
Education was one of the areas earmarked for involvement by the private sector in a sell-off of state-owned assets that could be valued at as much as $200 billion over the next decade, according to official statements from the Ministry of Economy and Planning last year.
Privatization is regarded as a key component of the Vision 2030 strategy to reduce the Kingdom’s dependence on oil revenue and the public sector.
Tatweer is seeking “a developer or developers forming a consortium to design, build, finance, maintain and transfer public school buildings on various sites in Jeddah and Makkah leased to TBC by the Ministry of Education. The sites will also include, where appropriate, a multipurpose hall and can accommodate children with disabilities, catering facilities and specialist teaching areas in line with the Kingdom’s pedagogic objectives and strategy.
“The ministry will be responsible for providing the education services and information, communication and technology equipment and services. It is also anticipated that the developer or developers forming a consortium would look to develop a third party revenue generation model for any facilities such as the sports facilities when not in use by the ministry,” it added.
Wave 1 of the project will include kindergarten, elementary, intermediate and secondary schools, for boys and girls, TBC said.
An open investor conference will be held in Riyadh next month to gauge interest in the tender from developers, investors, financial institutions and professionals. TBC is also being advised by the UK-based law firm Allen & Overy as international legal counsel.
HSBC also announced that it had made progress on preparing SAGO for sale, in terms of the company’s business model, regulatory set-up and financial accounts for the 2017 financial year.
Details of the sales process will be announced during the second quarter of this year, HSBC said. The bank added: “The milling companies represent a unique investment opportunity in the flour milling sector in Saudi Arabia, the largest economy in the Middle East. The milling companies also present opportunities for expansion into value added product within the Saudi market.”


US in criminal probe of China's Huawei

Updated 17 January 2019
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US in criminal probe of China's Huawei

  • The Wall Street Journal said the US justice department is looking into allegations of theft of trade secrets from Huawei's US business partners
  • Huawei forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government

WASHINGTON: US authorities are in the "advanced" stages of a criminal probe that could result in an indictment of Chinese technology giant Huawei, a report said Wednesday.
The Wall Street Journal, citing anonymous sources, said the Department of Justice is looking into allegations of theft of trade secrets from Huawei's US business partners, including a T-Mobile robotic device used to test smartphones.
Huawei and the Department of Justice declined to comment on the media report.
However, Huawei noted that "Huawei and T-Mobile settled their disputes in 2017 following a US jury verdict finding neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile's trade secret claim."
The move would further escalate tensions between the US and China after the arrest last year in Canada of Huawei's chief financial officer Meng Wanzhou, who is the daughter of the company founder.
The case of Meng, under house arrest awaiting proceedings, has inflamed US-China and Canada-China relations.
Two Canadians have been detained in China since Meng's arrest and a third has been sentenced to death on drug trafficking charges -- moves observers see as attempts by Beijing to pressure Ottawa over her case.
Huawei, the second-largest global smartphone maker and biggest producer of telecommunications equipment, has for years been under scrutiny in the US over purported links to the Chinese government.
Huawei's reclusive founder Ren Zhengfei, in a rare media interview Tuesday, forcefully denied accusations that his firm engaged in espionage on behalf of the Chinese government.
The tensions come amid a backdrop of President Donald Trump's efforts to get more manufacturing on US soil and slap hefty tariffs on Chinese goods for what he claims are unfair trade practices by Beijing.
In a related move, lawmakers introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws -- with Huawei and fellow Chinese firm ZTE the likely targets.
"Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People's Liberation Army," said Republican Senator Tom Cotton, one of the bill's sponsors.
Democratic Senator Chris Van Hollen said in the same statement: "Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated US laws, represent a significant risk to American national security interests and need to be held accountable."
Last year, Trump reached a deal with ZTE that eases tough financial penalties on the firm for helping Iran and North Korea evade American sanctions.
Trump said his decision in May to spare ZTE came following an appeal by Chinese President Xi Jinping to help save Chinese jobs.