Public-private partnerships will help KSA achieve Vision 2030 goals

Michael Armstrong, FCA and ICAEW regional director for the Middle East, Africa and South Asia (MEASA)

Realising Saudi Arabia’s ambitious Vision 2030 requires the Kingdom to embrace public-private partnerships (PPPs) to attract more foreign investment, create jobs and encourage the transfer of skills to the public sector. This was the consensus during accountancy and finance body ICAEW’s Corporate Finance Faculty roundtable about PPP prospects in the Kingdom.
ICAEW members and guests gathered in Riyadh on Sept. 18 for an event organized by ICAEW and the Saudi Organization for Certified Public Accountants (SOCPA) to discuss how governments and businesses can work together to address the challenges and opportunities associated with PPPs in the Kingdom.
Panellists included Shaun Johnson, general counsel, PPP Unit, ACWA Holding; Richard Paton, head of infrastructure advisory and PPP, Middle East and South Asia, KPMG; Nabil Al-Mubarak, chief executive, Saudi Credit Bureau (SIMAH); and Leroy Levy, partner, projects and infrastructure, King and Spalding. The discussion was moderated by Irfan Said, corporate finance and investment banking head, Samba Capital.
Introductions were conducted by Nick Parker, president of ICAEW, and Ahmad Almeghames, secretary-general of SOCPA.
Panellists agreed that Saudi Arabia is going in the right direction when it comes to implementing PPPs. However, the government should be careful in adopting PPP models from other jurisdictions as they may not cater to Saudi Arabia’s unique requirements.
Speakers advised that the Saudi government needs to be diligent in the selection of PPP projects in order to achieve its economic objectives and increase foreign direct investment. It must create a pipeline of projects that increases attractiveness to sponsors and should also focus on specific sectors which would provide the most opportunity for public-private collaboration. These include the hospitality, transportation, education, health care and infrastructure sectors.
Michael Armstrong, FCA and ICAEW regional director for the Middle East, Africa and South Asia (MEASA), said: “Adopting a PPP model for future infrastructure spending would mean the Saudi government can save valuable public finances during the current challenging period. It brings the public sector a number of benefits including the transfer of expertise, innovation and efficiency from the private sector. It also transfers many risks typically borne solely by the public sector, to the private sector.”
He added: “Although the framework for large-scale PPP projects in the Kingdom is yet to be developed, a well-structured national PPP strategy will represent a significant and positive change.”