Riyadh puts airport privatisation on hold

24 April 2018
Riyadh hired Goldman Sachs last year to advise on the King Khalid International airport equity sale

Saudi Arabia is understood to have put privatisation plans for Riyadh’s King Khalid International Airport on hold.

US-based Goldman Sachs was hired last year to advise Saudi Civil Aviation Holding Company on the sale of the airport's minority stake to private investors.

It is understood there have been changes to the original plan, according to a report by UK-based news agency Reuters.

An unnamed source told Reuters that authorities “are looking at the plan again because it is starting to look more like a concession rather than privatisation".

Privatising the airport was part of broad economic reforms to boost efficiency and raise an estimated $200bn from equity sales of state assets.

The airport, the kingdom’s second largest next to Jeddah’s King Abdulaziz International, is undergoing a $2.1bn upgrade.

A joint venture of Turkey’s IC Ictas and local firm Al-Rashid Trading & Contracting was awarded the renovation contract for the airport last year.

The redevelopment will be conducted in phases, starting with terminals 3 and 4. Terminal 3 previously catered to domestic flights, which were moved to Terminal 5 last year, while Terminal 4 is unused.

Succeeding phases will redevelop terminals 1 and 2, which cater to international flights.

Terminal 5, which was completed in 2016, is operated and managed by Dublin Airport Authority (DAA) under a five-year contract with the General Authority of Civil Aviation (Gaca). A joint venture of Turkey’s TAV and the local Al-Arrab Contracting won the $430m contract to build the terminal, which can handle up to 12 million passengers annually, in 2012.

 

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