Saudi Arabia's privatization, public-private partnership take center stage at forum


RIYADH — The latest report from the global research and consultancy firm Oxford Business Group (OBG) shines a spotlight on Saudi Arabia’s far-reaching privatization plans, which are among the key contributors to the Kingdom’s diversification drive.

As the government is expected to announce the details of the Vision 2030’s privatization program chaired by the Minister of Economy and Planning Mohammed Al Tuwaijri in the next few months, The Report: Saudi Arabia 2018 charts the progress of moves under way to partially sell several of the country’s state-owned entities, including the landmark initial public offering of the national energy company, Saudi Aramco.

Privatisation is also expected to benefit an increasingly deregulated capital market, together with the launch of a new iteration of the Qualified Foreign Investor (QFI) framework in January 2018 and the expected stock market’s upgrade to emerging market status later in the year. “As of late 2017, there were almost 120 QFIs, with 30% of these signing up in the third quarter of 2017 alone”, Mohammed El Kuwaiz, Chairman of Capital Market Authority, told OBG in an exclusive interview included in the report.

In addition, the publication provides in-depth coverage of the country’s pipeline of infrastructure and transportation projects that includes seaports, airports and related supply chains, many of which will be rolled out as public-private partnerships. “The primary strategy in the National Transformation Programme and Vision 2030 is to increase engagement with specialised private companies in most of the transport mega projects through privatisation or public-private partnerships,” Nabeel Al Amudi, Minister of Transport, said in an exclusive OBG interview. The Ministry of Transport targets to achieve a private sector contribution of 5% in roads, 50% in railways and 70% in ports projects by 2020.

OBG’s report also considers the key role earmarked for the Public Investment Fund, the Kingdom’s sovereign wealth fund, to boost non-oil revenue, while tracking the government’s aim of increasing its assets under management from $230bn currently to $400bn by 2020, and then expand the figure further to $2trn by 2030.

With efforts to diversify the domestic energy mix gaining pace, The Report: Saudi Arabia 2018 explores the country’s plans to develop its natural gas industry and expand into renewables. The Kingdom’s newly established Renewable Energy Project Development Office (REPDO) is currently holding the first bid round for photovoltaic (PV) and wind power plants, with aim to install a total capacity of 3.45 GW by 2020 and 9.5 GW by 2023.

In other coverage, OBG’s report provides dedicated analysis of the latest developments taking place in key regions, namely Makkah and Medina, and Jeddah, where investment and development form a pivotal part of national plans for meeting the objectives laid out in Vision 2030. “Makkah already handles more than 12m Umrah visitors from outside Saudi Arabia and more than 8m domestic visitors per year, so it has already met the 2020 goal of 20m Umrah visitors,” Osama Al Bar, Mayor of Makkah, told OBG in an exclusive interview in the report. By 2030 the government aims to increase the number of annual Umrah pilgrims to 30m.

Together with a detailed, sector-by-sector guide for investors, The Report: Saudi Arabia 2018 features a wide range of exclusive interviews with other high-profile personalities, including: Prince Saud bin Nayef Al Saud, Governor, Eastern Province; Prince Turki bin Saud bin Mohammed Al Saud, President, King Abdulaziz City for Science and Technology (KACST); Abdullah Alswaha, Minister of Communications and Information Technology; Ahmed Al Khateeb, Chairman, Saudi Arabian Military Industries (SAMI); Ahmed Alkholifey, Governor, Saudi Arabian Monetary Authority (SAMA); and Ibrahim Al Omar, Governor, Saudi Arabian General Investment Authority (SAGIA).

Commenting after the launch, OBG’s Editor-in-Chief and Managing Editor for the Middle East Oliver Cornock said major developments under way across the sectors signalled that the national drive to diversify the economy under the Kingdom’s Vision 2030 banner was moving forward at pace.

“The reforms that are providing the foundations for Saudi Arabia’s plans to boost non-oil expansion and take the economy in a different direction are well in hand, with the private sector poised to play a much bigger role in the next phase of the Kingdom’s development,” he said. “We expect additional measures aimed at promoting entrepreneurship among the younger generations and support for technology start-ups to help further broaden the economic base in what remains the single largest economy in the MENA region.” — SG