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PRIVATIZATION TO GENERATE UP TO $11 BILLION BY 2020

At the end of April, Saudi Arabia’s council of economic and development affairs, chaired by crown prince Muhammad bin Salman, approved the kingdom’s privatization program. The program aims to generate 35 billion to 40 billion riyals ($9 billion to $11 billion) by 2020 and create up to 12,000 jobs. It features 14 public-private partnerships in which investments worth as much as 24 billion to 28 billion riyals will target ports, desalination and power plants. The balance of the income is expected to come from sales of assets, some through initial public offerings, in sectors such as education, water, telecommunications and healthcare.

In the longer term, the privatization program aims to generate as much as $200 billion in addition to another $100 billion from the sale of a five percent stake in Saudi Aramco. Eventually, it is hoped the program will boost the private sector’s contribution to the country’s gross domestic product from 40 percent to 65 percent. In a telephone interview with Reuters,  Turki al-Hokail, chief executive of the national centre for privatization and public-private partnerships, said the government was working on new rules to attract foreign and local investment,including a law on public-private partnerships, by the end of this year “This is a big change in the economy” he said. “The government is moving from operating projects to monitoring and regulating them. Operations will be the job of the private sector.”