Saudi Arabias Presidency of Meteorology and Environment (PME) has received interest from at least four financial advisory firms to help prepare the state-controlled firm for privatisation.
Three of the big-four advisory firms Netherlands-based KPMG, UK-headquartered EY, and PriceWaterhouseCoopers (PwC) – are vying for the PME mandate along with an international consultancy firm Palladium, sources familiar with the matter told MEED. The bids were submitted for potential deal in the first week of May, they said adding that the government will soon select an advisor.
PME had sent a request for proposals in March, asking the firms to pitch for a financial advisory role to help it prepare its environmental and meteorological centres for potential sale to private sector investors as part of Riyadhs plans to cut costs and monetise some of government services.
PME is a government body tasked with the oversight of all environment-related issues in Saudi Arabia and is the main source for government and businesses for meteorological weather information. It deals with both public and private sectors in implementing air pollution standards and its services span municipal, medical and industrial waste management; used oil and asbestos management and marine and coastal environment management.
The General Authority of Civil Aviation (GACA), also relies on PMEs reports to run its air traffic operations across the kingdom.
The provision of services similar to PME in other markets such as Europe is usually carried out by private sector firms, which then sell the weather and meteorological information to aviation authorities and news channels. The Saudi deal is likely to garner significant interest from the private sector as it is the only source of such information in the country and can be monetised with ease, according to the sources.
The MEP is also likely to retain its role as the regulator of environmental standards but will generate income by selling its services such as testing of air and water quality and the certifications for both public and private sector clients, they said.
Saudi Arabia is trying to transform its economy and privatise some of the state-controlled enterprises and services to reduce burden on public finances. Riyadh plans to part sell about 100 government enterprises, including a less than 5 per cent stake in oil and gas giant Saudi Aramco through a public float.
The kingdom expects its privatisation programme to yield about $200bn in total through full or partial sale of government firms. Administrative preparations have already been made and the kingdom plans to begin offering assets in four sectors: sports, electricity generation, water provision and grain silos this year. MEED earlier reported that the kingdom has already appointed advisors to sell more than a dozen professional football clubs to private sector investors. Within the healthcare sector, King Faisal Specialist Hospital and Research Centre in Riyadh is first government assets to be privatised. Riyadh is also studying the option of whether to sell off all public hospitals and 200,000 pharmacies.
In April MEED reported that Saudi Grains Organisation, a state-controlled grain silos and flour mills operator, is aiming to begin the prequalification process for privatisation of its milling operations by the end of June. Riyadh has split the companys milling operations into four special purpose vehicles (SPVs), which currently remain under the ownership of the sovereign wealth fund Public Investment Fund (PIF). The government will sell 100 per cent equities in all of the four SPVs.