JEDDAH, 5 June — Saudi Arabia’s top decision-making body yesterday endorsed the country’s privatization strategy and took major steps toward privatizing desalination projects and postal services. It also decided to establish a joint stock company for the petroleum and gas industry.
A meeting of the Supreme Economic Council (SEC), chaired by Prince Abdullah, the regent, and attended by Prince Sultan, second deputy premier and minister of defense and aviation, also approved the executive program for the much-awaited railway expansion project that will link the Kingdom’s two coasts.
"The SEC meeting approved the privatization strategy which is composed of the objectives and policies of privatization as well as its methods and regulations," Dr. Abdul Rahman Al-Tuwaijeri, secretary-general of the organization, told the official Saudi Press Agency. He said the strategy also included administrative procedures to implement the privatization program.
Al-Tuwaijeri said the new Petroleum Services Company will be owned by the government and the private sector and will serve the petroleum, gas and petrochemicals sector as well as other similar sectors. It has been given the authority to establish the necessary industries.
The SEC, a mini-Cabinet headed by Prince Abdullah, was established in 1999 to take important policy decisions. It has been entrusted by the Cabinet with the overall charge of planning and implementing the country’s privatization program which aims to transfer some state-owned services to the private sector.
The Kingdom has already restructured its telecommunications and electricity sectors to give private investors a bigger role in the economy. The authorities awarded two contracts to international consultants in October to prepare a study for the privatization of Saudi Arabian Airlines.
"The SEC meeting approved a project to reorganize the postal department to make it a general organization under the supervision of a board comprising representatives from both the public and private sectors. This is to prepare the sector for privatization at a later stage," Al-Tuwaijeri said.
In another move to privatize the Saline Water Conversion Corporation (SWCC), the SEC meeting approved the principles and conditions for private sector participation in desalination projects. Saudi Arabia is the world’s largest supplier of desalinated water with its 25 plants on the Red Sea and Arabian Gulf coasts pumping about 600 million gallons of drinking water daily.
Referring to the $2 billion railway expansion plan, Al-Tuwaijeri said the projects would be floated in the private sector after completing the necessary studies. The main 950-km railway link between Jeddah and Dammam is expected to boost cargo transport by 19.5 percent to 30 million tons a year.
Another 610-kilometer rail link is planned to start from Riyadh and go northwest to the Hudaitha border post with Jordan, and a third to link Jeddah with the holy cities of Makkah and Madinah. Several foreign and local firms are bidding on the projects.
Saudi-Moroccan talks: Prince Abdullah, meanwhile, held talks here yesterday with Morocco’s King Muhammad VI on Middle East peace and ways of strengthening bilateral relations. "The two leaders discussed the situation in the Middle East, especially in Palestine," SPA said, adding that they denounced the Israeli atrocities on Palestinian civilians. Prince Sultan attended the talks.
