Saudi Arabia approves airport shareholding company

27 February 2017

All airports to be privatised by 2020

The Saudi cabinet has approved the conversion of King Fahd International airport in Dammam into a shareholding company, according to the Saudi Press Agency (SPA).

An executive regulation to protect the equity and rights of shareholders has also been approved.

The creation of the shareholding company is in line with the privatisation programme of the General Authority of Civil Aviation (Gaca). Under the plan, ownership and management of key airports in the kingdom will be turned over to a shareholding company.

Under the privatisation programme, local investors’ ownership of the airports is capped at 25 per cent to ensure foreign operators have a majority holding in operating contracts.

Gaca aims to privatise all airports in the kingdom by 2020. It has identified a three-step process to achieve this objective, starting with transforming the airports into an airport company.

The next step involves privatising of the operation and maintenance sectors, which will start with Jeddah’s King Abdulaziz International airport (KAIA), and the final step entails the adoption of a build, transfer and operate (BTO) strategy.

In 2016, Riyadh Airport Company (RAC) was formed to operate King Khaled International airport in Riyadh.

Gaca also appointed Ireland’s Dublin Airport Authority (DAA) to operate and manage Terminal 5 at King Khaled International in early 2016.

The tender to operate and manage Jeddah’s King Abdulaziz International, however, was cancelled in August last year.

So far, only one of Saudi Arabia’s 27 airports, Prince Mohammed bin Abdulaziz International in Medina, is operating on a BTO basis.

The kingdom’s second airport PPP, Taif International, is expected to be tendered this year.

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