JEDDAH, 28 August 2007 — The much-talked about privatization of Saudi Arabian Airlines received a shot in the arm yesterday when the Council of Ministers gave the national carrier the green light to convert its strategic units into companies.
“The Council of Ministers decided to allow the General Organization for Saudi Arabian Airlines to transform strategic units in sectors targeted for privatization into companies,” the Saudi Press Agency said, quoting a Cabinet statement.
The statement said Saudia would be licensed to establish companies wholly owned by the organization in preparation to privatize them with the participation of private investors. Employees of the new companies will get the same salaries and benefits they were receiving before.
The decision taken at the Cabinet meeting, chaired by Custodian of the Two Holy Mosques King Abdullah, is expected to speed up privatization of the airline, the largest in the Middle East with a fleet of 120 passenger and cargo planes.
Saudia has already taken a number of steps toward privatization. “We have completed measures for the privatization of the catering sector,” said Khaled Al-Mulhim, the airline’s director general.
According to the privatization plan, the airline will be transformed into a holding company with a number of subsidiaries to run its catering and air cargo divisions, ground service, Prince Sultan Aviation Academy, and technical and basic aviation services. Part of the holding company will be floated for public subscription in the future.
Culture and Information Minister Iyad Madani said the Cabinet meeting also decided to establish a national company for the unified purchase of medicines and medical appliances. The company will be the sole supplier of medicines and medical appliances to government health institutions.
Madani said the Cabinet also endorsed the economic resolutions adopted by the GCC summit in Riyadh on Dec. 10, 2006. Accordingly, GCC citizens will be given equal treatment in share ownership and trading on the Saudi bourse. Saudi Arabia will also exempt fodder imported from outside the GCC from customs tariff. The Kingdom also agreed to add the list of products committed by Oman to the WTO to the list of products exempted from the unified GCC customs tariff.
The Cabinet approved the executive bylaw for labor inspections. The law instructs the central administration at the Labor Affairs Agency to supervise such inspections being carried out by labor offices.
Earlier, addressing the Cabinet meeting, King Abdullah emphasized Saudi Arabia’s efforts to bring about peace and stability in the region. The Cabinet also reviewed the implementation of new welfare projects across the Kingdom.
The Cabinet meeting emphasized the importance of continuing economic plans and financial policies for the modernization of infrastructure and to meet development requirements by increasing public spending and private investment.
It also called for greater efforts to meet the requirements of consumers and follow-up on inflation. It also stressed the private sector’s role in boosting economic growth and providing better options to consumers. It called upon the media and private societies to enhance awareness of consumers to deal with the market in a more intelligent manner. The Cabinet agreed to change the name of the General Organization for Technical Education and Vocational Training to the General Organization for Technical and Vocational Training and approved its regulations.
The Cabinet appointed Shayie ibn Ibrahim Al-Khoshaiban minister plenipotentiary at the Foreign Ministry and Dr. Abdul Rahman ibn Abdul Aziz Al-Nuwaiser assistant deputy health minister for preventive medicine.
