Riyadh to privatise airports

09 November 2007

Riyadh is to privatise its three main international airports by 2015, in a further step to liberalise its aviation sector.

The General Authority of Civil Aviation (Gaca) aims to relaunch the international airports at Riyadh, Jeddah and Dammam as independent trading companies with diverse sources of income. In time, each business could be listed on a stock market or partially sold to the private sector through other means.

The bidding process is under way for foreign operators to run the three airports, under six-year contracts. The winning bidders will undertake to overhaul every aspect of the airports' commercial operations, working alongside the existing management to train staff, increase revenue and improve services.

By the time these contracts expire in 2014, Gaca anticipates each business will be self-sufficient, paving the way for the subsequent privatisation and greater liberalisation of passenger transport and freight services.

'There has been huge spending on the airports by the government but they are still not efficient as businesses,' says a Gaca official. 'The government will decide later whether to sell part of the company in shares or introduce private-sector ownership.

'But if it is decided to sell off part of the airports, we have to get them ready. With their own revenue and commercial independence, it will be much easier.'

The final bidders for the three contracts to run the airports are France's Aeroports de Paris with Schiphol Group of the Netherlands, German operator Fraport, Turkey's TAV Havalimanlari Holding, and Changi Airports International of Singapore (MEED 2:10:07).

Preliminary evaluation of the bids is now complete. The companies will submit their final offers on 10 November, with contract awards expected by the first week of December.


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