Saudi Arabia seeks advisor for PPP programme

17 July 2016

Cross-sector consultancy deal tendered

Saudi Arabia’s Ministry of Economy has issued a request for proposals for an international advisor to develop a pipeline of public private partnership (PPP) projects.

The consultant would help select major capital projects suitable for tendering on a PPP basis.

Saudi Arabia’s National Transformation Plan (NTP) involves increasing private sector investment in the kingdom. It includes an aim to carry out five PPP projects by 2020, without specifying sectors or projects.

Saudi Arabia already has a track record in contracting independent power and water projects (IWPPs), which have set a precedent for international developers. This programme may be revived as a response to lower oil revenues.

The Saudi Electricity Company (SEC) has already begun tendering three 50MW solar IPPs, and has appointed consultants for the scheme.

The PPP model is also expected to be applied in other sectors such as transport, health and education. However, structuring bankable projects outside the utilities sector is proving more difficult.

The tender for Taif airport PPP has been put on hold, due to a concerns over revenue streams. The General Authority for Civil Aviation has invited banks to bid for a contract to privatise four airports.

Other PPP plans are at an earlier stage.

Saudi Arabia is expected to go ahead with PPP projects without a dedicated legal framework, using existing commercial law.

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