Riyadh committed to privatising 100 state companies

03 May 2017

Salman highlighted healthcare and transportation as key sectors that need to be privatised

Saudi Arabia will privatise up to 100 state-owned companies, according to the kingdom’s Deputy Crown Prince Mohammed bin Salman bin Abdulaziz al-Saud.

During a televised interview in Arabic on 2 May Prince Mohammed highlighted the healthcare and transportation as key sectors that need to be privatised “heavily”.

During the interview, he affirmed the kingdom’s Vision 2030 reform programme, which was announced last year and promised to privatise key sectors. “A good healthcare system tends to be privatised,” said Prince Mohammed who added that there will be a series of privatisations in the transportation sector to improve the efficiency of Saudi Arabia and reduce public spending.

The kingdom expects its privatisation programme could yield about $200bn in total through full or partial sale of some of the state enterprises. The Deputy Crown Prince also said that opposition or fear of the listing of Saudi Aramco was “communist thinking”.

Administrative preparations have already been made and Riyadh plans to begin offering assets in four sectors: sports, electricity generation, water provision and grain silos this year.

King Faisal Specialist Hospital and Research Centre in Riyadh is first among the healthcare assets and the government is 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 company’s 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.

State-controlled Saudi Electricity Company (SEC) is also being divided in the four generation companies and private the first company this year, MEED reported in November last year.

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