SAUDI ARABIA

GACA: Privatization to cover all airports

August 23, 2017

Saudi Gazette report

RIYADH – The General Authority of Civil Aviation (GACA) has said that its prestigious privatization program will cover all airports in the Kingdom, adding that they would be converted into companies to improve services.

“The project to modernize King Khalid International Airport (KKIA) in Riyadh would start soon after this Haj season,” said Mohammed Al-Shatwi, vice president of GACA for financial affairs.

He said the new project would bring about a facelift of KKIA with its four terminals having new architectural designs. “We have already established a modern terminal at the airport for domestic flights,” he said in comments published by Al-Hayat Arabic daily.

Al-Shatwi said the new state-of-the-art King Abdulaziz International Airport (KAIA) in Jeddah would be launched by the second half of 2018, adding that the Singaporean Changi Airport Group has been awarded the contract to manage the airport for 20 years.

The proposed airport companies would be fully owned by Saudi Civil Aviation Holding, which will be in charge of airport operations. The holding company will be fully owned by the Public Investment Fund (PIF).

Al-Shatwi said the privatization would contribute to expansion of airports without government spending, increasing job opportunities for Saudis and strengthening the national economy.

In a previous statement, Abdul Hakeem Al-Tamimi, president of GACA said: “The main objective of the privatization move is to improve services being rendered to passengers and make targeted sectors profitable.”

GACA is likely to follow three methods for privatization: Either to transform each airport into a company and GACA wanted to apply this system on KKIA first or sign contract with a specialized company for operation and maintenance of the airport as happened in the case of the new Kairport in Jeddah. The third option is the build, operate and transfer (BOT) system.

“We have applied this system on Prince Muhammad Bin Abdulaziz International Airport in Madinah and some other airports like Taif, Hail, Qassim and Yanbu, after signing deals with investors,” Al-Tamimi explained.

The Saudi Civil Aviation Holding plans to sell a minority stake in KKIA. Riyadh has the second biggest airport in Saudi Arabia after Jeddah's KAIA.

King Khalid International Airport handled 22.5 million passengers in 2016, up 0.9 percent year-on-year. Saudi Arabia is trying to raise $200 billion over the next several years through stake sales in assets such as airports.

Al-Shatwi stressed the significance of small airports, adding that they would reduce pressure on major airports in Jeddah, Riyadh and Dammam, accelerate tourism and economic growth and reduce transport problems.


August 23, 2017
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