Interview: Mohannad Basodan
How do you assess the progress being made in increasing private sector participation?
MOHANNAD BASODAN: A number of significant steps were taken to promote privatisation and public-private partnerships (PPPs) in 2023. The current pipeline, which has been published on NCP’s website, contains more than 200 approved projects across 16 sectors, and another 300 projects in various stages of preparation. This represents one of the largest portfolios in the world.
Since the NCP was established, it has developed and implemented a comprehensive regulatory and technical framework for increasing private sector participation that is based on international best practices. It has signed more than 45 transaction contracts in water, wastewater, ports, health, social development, municipalities and education, among others. These include the construction and facilities management of 120 new schools serving 100,000 students, seven independent water desalination plants with a capacity of 3.8m cu metres per day and radiology services for seven hospitals in the Riyadh region, benefitting some 1.5m patients. Also in the health sector, the construction and facilities management of the new 244-bed Al Ansar hospital has been awarded, the first transaction of its kind in the Kingdom. In transport, NCP recently oversaw the demonopolisation of the intercity bus network, which serves 6m passengers across 200 cities. Following the restructuring and trade sales of grain milling, the First Milling Company was listed on the Saudi Stock Exchange in 2023. This helped bring the benefits of privatisation to a wide range of investors, while also rewarding the original investor consortium for their efforts to improve performance.
What is being done to attract international companies to private sector participation opportunities?
BASODAN: Both local and foreign investors are important to the success of private-sector participation. We value the benefits that international investors bring, especially when they partner with local firms. We look to a variety of investors to implement and fund these projects, including contractors, developers and financial institutions. The NCP has been active in attracting international investors through market outreach visits. In the first half of 2023 we made multiple trips to investor hotspots to present the PPP opportunities available in the Kingdom. In marketing- specific transactions, we work to ensure global coverage so that all potential investors can participate.
Saudi Arabia has adopted a framework for private sector participation based on best practices, which includes measures to promote transparency, flexibility and bankability. Also, it ensures the government’s ability to fulfil its long-term financial obligations when engaging in PPP contracts. Lastly, the Private Sector Participation Law specifically requires the equal treatment of both local and international investors.
In what ways do you see private sector participation expanding in the future?
BASODAN: Private sector participation in the Kingdom has a strong foundation for growth and strong support across the government. It is a fundamental part of the Vision 2030 development strategy, which aims to boost the private sector’s contribution to GDP from 40% to 65%. The NCP has created an appealing investment environment for private sector participation and is tendering high-quality projects that attract local and international investors, and we intend to continue this strategy. Upcoming opportunities include tenders for four regional airports, hospitals, schools and 4500 km of modern highways connecting cities across the Kingdom, as well as further investment in desalination and water treatment capacity. The privatisation of sports clubs, most notably in football, kicked off in June 2023, and will provide opportunities for funds and other financial investors looking for established assets in this fast-growing market.
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