Riyadh calls on privatisation advisers to freeze fees

11 July 2008
Saudi Arabia's Saline Water Conversion Company (SWCC) is calling for advisers on the proposed sell-off of the kingdom's desalination facilities to freeze their fees at the level they first quoted one year ago.

The move follows the long-awaited approval of its privatisation programme from the Supreme Economic Council on 8 July.

Adviser fees on such deals are generally only valid for less than a year after they are submitted. The advisers are thought to still be keen to participate in the sell-off and are expected to try to reach an agreement with SWCC.

A source at one of the advisers tells MEED his firm will now need to discuss how to proceed.

"There are certain complications," he says, citing the changing currency exchange rates over the past year as an issue that will need to be considered.

The US' Booz & Company is the strategic adviser on the privatisation and is also responsible for change management. Germany's Fichtner is the technical adviser and HSBC is the financial adviser. Freshfields Bruckhaus Deringer is the legal adviser, while KPMG of the Netherlands is to advise on accounting and Canada's Hay Group on human resources. The US' Ernst & Young is the information technology adviser.

The privatisation will restructure SWCC into a holding company and several production units. The production units will bundle together new and existing water plants.

The privatisation is already behind schedule and SWCC says the original 18-month timeframe may need to be re-evaluated.

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