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

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.”

France ready to take Trump’s tariff threat to WTO

Updated 08 December 2019

France ready to take Trump’s tariff threat to WTO

  • Macron government will discuss a global digital tax with Washington at the OECD, says finance minister

PARIS: France is ready to go to the World Trade Organization to challenge US President Donald Trump’s threat to put tariffs on French goods in a row over a French tax on internet companies, its finance minister said on Sunday.

“We are ready to take this to an international court, notably the WTO, because the national tax on digital companies touches US companies in the same way as EU or French companies or Chinese. It is not discriminatory,” Finance Minister Bruno Le Maire told France 3 television. Paris has long complained about US digital companies not paying enough tax on revenues earned in France.

In July, the French government decided to apply a 3 percent levy on revenue from digital services earned in France by firms with more than €25 million in French revenue and €750 million ($845 million) worldwide. It is due to kick in retroactively from the start of 2019.

Washington is threatening to retaliate with heavy duties on imports of French cheeses and luxury handbags, but France and the EU say they are ready to retaliate in turn if Trump carries out the threat. Le Maire said France was willing to discuss a global digital tax with the US at the Organization for Economic Cooperation and Development (OECD), but that such a tax could not be optional for internet companies.

“If there is agreement at the OECD, all the better, then we will finally have a global digital tax. If there is no agreement at OECD level, we will restart talks at EU level,” Le Maire said.

He added that new EU Commissioner for Economy Paolo Gentiloni had already proposed to restart such talks.

France pushed ahead with its digital tax after EU member states, under the previous executive European Commission, failed to agree on a levy valid across the bloc after opposition from Ireland, Denmark, Sweden and Finland.

The new European Commission assumed office on Dec. 1.