RIYADH, 10 December 2005 — Privatizing state-owned assets is high on the agenda of the government of Saudi Arabia. Over 20 sectors have been identified for divestment, including desalination services, the aviation sector, road management, seaports, postal services, municipal services, education, health and social services, railways and oil refining.
But the privatization in the desalination sector is a high priority as the Kingdom’s demand for desalinated water has increased markedly over recent years. About 70 percent of the Kingdom’s drinking water is currently sourced from desalination plants.
The Saline Water Conversion Corporation (SWCC) has signed contracts with legal, strategic, financial and technical advisers to develop a comprehensive plan for the privatization of the state-owned water company with a deadline for completion as early as 2008. The Saudi law firm, Prima Law & Consultations Office and Freshfields International, a leading national legal consultant, won the legal-consultation contract for the privatization of desalination sector.
“The privatization of the desalination sector in Saudi Arabia will be the largest of its kind in the world as the Kingdom is producing over 25 percent of the world’s total desalinated water. The project will be also the largest part of the privatization program in Saudi Arabia since its assets amount will be over SR100 billion, exceeding the total amount of SR60 billion that the government had spent on the targeted sector,” said Prima Law President Prince Abdul Rahman ibn Saud Al-Kabir during a press conference held last week in Riyadh. “Our law office in a joint venture with the reputable law firm of Freshfields has won the legal consultations contract after a tough competition with many world-leading law firms of which four only were qualified and short-listed for the final competition and award.”
“The awarded legal consultations contract shall address key aspects of dealing with the rules and regulations of the SWCC; the entire government laws and regulations that may conflict with the privatization; and the relations with all stakeholders and competent authorities,” Prince Abdul Rahman added.
“The government’s efforts toward updating, reviewing and modernizing its laws and regulations are greatly appreciated as they pave the way and help prepare other public sectors for privatization. It is premature to speak of the modus operandi that might be used or set in place for this purpose or the privatization of SWCC, though this is what we intend to do with other technical, strategic and financial consultants to come up with the ideal approach for the overall privatization project,” Prince Abdul Rahman added.
“There will be an action plan which we in Prima Law and Freshfields are developing for coordination among the various consultants of the project. The plan that has already crystallized shall tackle key tasks and responsibilities for each party and mandate maintaining constant communications on highest levels among all relating parties. The role of Prima Law is essential and might be indispensable as we have the international and country-specific knowledge and expertise,” Prince Abdul Rahman added. The legal consultants will continuously coordinate and work with their counterparts in the technical, strategic and financial areas as no single consultant can work separately. Our legal approach will be submitted and presented to SWCC as early as Saturday,” Prince Abdul Rahman added.
“The first stage of the four consultants’ action plan is to focus on gathering information from all consultants for which the strategic consultant will be responsible. After receiving answers from SWCC on questions raised by the consultants, an overall perspective can be then developed and a consolidated study can be conducted. The study will consider different aspects, contingencies, relations with government agencies, the impact of this project on other laws, the obstacles that may arise from the process and possible solutions. Opinions and approaches from the four major consultants will be reviewed, studied and reported for final analysis,” Prince Abdul Rahman added.