Saudi Arabia has formed supervisory committees that will oversee the privatisation of state assets over the next 10 years as Riyadh looks to reduce burden on government finances and increase private sectors participation in the largest Middle Eastern economy.
Saudi Arabias council of ministers has mandated these committees to facilitate privatisation in specific sectors of economy identified under the kingdoms Vision 2030 economic reform programme. They will function alongside the National Centre for Privatisation & public-private partnerships (NCP), a supervisory agency created this year under the Ministry of Economy and Planning to drive forward the kingdoms ambitious plans to further private sector participation in Saudi economy, MEED reported in March.
The sectors identified for privatisation under the Vision 2030 include environment, water and agriculture; transport; energy, industry and mineral resources; labour and social development; housing; education; health; municipalities, telecommunication and information technology and Hajj & Umrah administration.
The role of each committee is to assess the technical, financial, legal and regulatory landscape and to establish a best practice blueprint for the privatisation of the targeted entities, according to an NCP statement, which added that the Ministry of Finance, and NCP will also be permanent member in all the supervisory committees, will also play a crucial role in the privatisation process.
Saudi Arabia is targeting to increase the private sectors contribution to national GDP from current 40 to 65 per cent under its Vision 2030 programme. Privatisation in the kingdom, which also plans to sell less than 5 per cent stake in Saudi Aramco, has already started in earnest and several state entities in healthcare, aviation, utilities and environmental services sector are already undergoing to privatisation process.
NCP and the supervisory committees are the first entities of their kind in the Middle East and North African region and are in the process of setting up a center of excellence to facilitate and regulate the sale of state assets and entities.
NCP has adopted a wide-ranging governance policy that will enable government agencies and hold each accountable as we move forward with stimulating private investment and privatization, Turki al-Hokail, the chief executive of NCP said.
NCP will formulate regulations, create privatisation frameworks and prepare processes that will serve as a blueprint for agencies and entities for the sale of Saudi.
We will facilitate the smooth transfer of assets by publishing a blueprint that will deepen communication channels between government agencies, citizens and the private sector locally, regionally and internationally and serve to guide investors and participating agencies and entities through the privatisation process, Al-Hokail said, adding that the NCP will also set necessary standards and frameworks for sectors targeted for privatisation.
NCP will work with the sectors targeted for privatization to ensure their technical and financial readiness, he said.