Al-Issa unveils action plan to strengthen PPP in education

Al-Issa unveils action plan to strengthen PPP in education

Al-Qasabi calls for task force to remove obstacles before investors; Tatweer aspires to raise private sector participation to 65%: CEO

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Minister of Education Ahmed Al-Issa and Minister of Commerce and Investment Majid Bin Abdullah Al-Qasabi inaugurates Investment and Finance in Educational Buildings Conference in Riyadh on Wednesday. — Courtesy photo
Minister of Education Ahmed Al-Issa and Minister of Commerce and Investment Majid Bin Abdullah Al-Qasabi inaugurates Investment and Finance in Educational Buildings Conference in Riyadh on Wednesday. — Courtesy photo

RIYADH — Minister of Education Ahmed Al-Issa launched on Monday the “Investment and Finance in Educational Buildings Conference” at the ministry’s headquarters in Riyadh.

Organized by the ministry with Tatweer Buildings Company (TBC), the conference aims to enhance the scope of public-private partnership in the area of educational facilities. The participants of the conference included Minister of Commerce and Investment Majid Bin Abdullah Al-Qasabi, Deputy Minister of Finance Hamad Al-Bazai, other deputy ministers and representatives of various government entities and the banking and investment sector and heads of Saudi universities.

In his speech during the opening session, Al-Issa extended his gratitude to Custodian of the Two Holy Mosques King Salman and his deputies for their unprecedented support to “develop the educational system in the Kingdom as part of their belief in better building people and shaping their national consciousness at present and in future”.

While referring to the allocation of more than SR200 billion from the state budget to support education in the Kingdom, he said the ministry aspires through this conference to launch an action program in line with the Vision 2030 to enhance the scope of public-private partnership in the areas of educational facilities and buildings.

Al-Issa added that the conference provides all stakeholders with investment and financing opportunities and options in educational buildings and aims to create attractive environment for investors in the field.

He said the Kingdom’s Vision 2030 confirms the role of education development companies in enhancing the investment environment to open new investment channels by making use of the ministry’s resources.

Al-Issa called on individual Saudi investors, family businesses and investment companies to enter into a real partnership with his ministry, represented by the TBC, to achieve such objectives in accordance with the pertinent regulations. The minister pointed out that exchange of experience should be utilized through regional and international initiatives in order to materialize the partnership with the private sector in the area of educational development.

Minister of Commerce and Investment Al-Qasabi said the private sector is a strategic partner in education development in line with the Kingdom’s Vision 2030. He stressed the importance of empowering the private sector by providing investment incentives.

Al-Qasabi pointed out that the education sector gets considerable attention from the government of the Custodian of the Two Holy Mosques, as more than SR200 billion, which is 22 percent of the total budget and 5.7 percent of the Gross Domestic Product (GDP), was allocated to cover education expenses this year.

He said education expenses in Britain, Germany and South Korea represent 5.3 percent, 4.3 percent and 4.2 percent of their GDP respectively. “I hope such expenses optimally contribute to the development of the education sector,” he said.

The Ministry of Commerce and Investment, the Saudi Arabian General Investment Authority, the General Authority for Small and Medium-sized Enterprises and the Business Performance Improvement Committee have exerted efforts to overcome all obstacles before investment and financing by the private sector in the education sector, Al-Qasabi added.

He called for forming an integrated task force to consider the method to activate cooperation between the private and public sectors as well as identify investment opportunities in the development of educational buildings.

TBC CEO Fahad Bin Ibrahim Al-Hammad said the Ministry of Education has made great efforts to develop the education sector by building more than 5,000 schools in the last decade. The ministry operates and maintains more than 22,000 other educational buildings regularly and follows up the restoration, rehabilitation, maintenance and expansion of many other educational projects.

“To ease the burden of managing and following up such projects and to be in line with the modern management variables, TBC was incorporated as the executive arm of the ministry in managing and executing educational building projects. Its target was that all Saudi schools should be established as buildings fitting with changes, developments and students’ needs. This main goal was followed by other goals represented in obtaining effective services to quickly and flexibly manage projects, to reduce the supervisory burden on the ministry and to reach the optimal efficiency in delayed projects,” Hammad said.

He said the private sector’s contribution would increase from 40 percent to 65 percent as per the Kingdom’s 2030 Vision “pushed us to give careful consideration to the mechanisms of increasing the private education and provide facilities to enhance the partnership with the private sector to build, manage and enhance the quality of educational buildings, and to facilitate access to land.”

He said the company conducted a benchmark study that included the experience of eight countries and carried out a number of analytical studies with a number of national and international consultants and experts.

“Mechanisms that would lead to increased private sector engagement in the education development were subject to analysis and study. Accordingly, we have concluded that the available opportunities include leasing and leasing back buildings with financial institutions, endowments and family businesses, as well as entering into partnership with developers,
contractors and maintenance and operation companies to mandate them with building and maintenance projects through long-term contracts extending up to 30 years, God willing. These opportunities include entering into partnership with private educational institutions in construction and operation activities according to long-term contracts. The available opportunities also include asset management and investment. Such assets are those which can be disposed of or whose investment sites can be replaced with other sites serving the educational purpose itself,” Hammad said.

The opening session included screening of a film about TBC and honoring the sponsors of the conference by the minister of education. Later, an associated exhibition with the participation of more than 20 local and regional companies was opened.

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