RIYADH: Saudi Arabia is seeking to raise about $55 billion over the next four years through its privatization program as it looks to reduce its budget deficit, according to Saudi Finance Minister Mohammed Al-Jadaan.
Al-Jadaan expects to raise $38 billion through asset sales and $16.5 billion through public-private partnerships, he told the Financial Times.
The Saudi government has identified 160 projects in 16 sectors, including asset sales and public-private partnerships through 2025.
Asset sales will include government-owned hotels, television broadcasting towers, and cooling and water desalination plants.
The plan does not include Public Investment Fund entities or the sale of other assets of Saudi Aramco. The privatization law will be enacted in Saudi Arabia in July of this year.
Last year, Saudi Arabia sold all its flour mills to a group of local and international investors for around $1.5 billion, with HSBC advising on the deals.
The National Privatization Center (NCP) in March also announced the creation of the Registry of Privatization Projects, a comprehensive central database of information and documents related to projects targeted for privatization.
According to director-general of Strategic Communication and Marketing at the NCP, Hani Al-Saigh, the new system seeks to enhance the existing privatization system. One of its most important roles will be to strengthen the existing governance and ensure fairness and transparency.
“The law allows participants from the private sector to set up a committee to submit grievances related to the bidding and selection procedures of privatization projects and lay the regulatory basis to compensate the aggrieved in case the gap cannot be addressed,” he told Arab News.
Dimah Talal Al-Sharif, a Saudi legal consultant at the law firm of Majed Garoub and a member of the International Association of Lawyers, told Arab News that the ongoing privatization drive is a national project that is not solely related to government ministries.
“Privatization will create more job opportunities and improve the level of public service due to competition, which is an important element in the private sector. However, people will need more assurance on job security as it exists in the public sector,” she said. “Continuity will be for those who prove their ability to perform well, adhere to the regulations and achieve the goals set for each employee because, in order for privatization to succeed, there must be a change in the method of operating and managing public projects.”