DUBAI: The government of Saudi Arabia has for the first time revealed in detail the parts of the national economy that will be considered for privatization as part of the Vision 2030 strategy to diversify it away from oil dependency and public-sector domination.
In addition to Saudi Aramco — set for a record breaking initial public offering (IPO) on international stock markets next year — big chunks of the economy are regarded as potential privatization candidates, including Saudi Arabian Airlines (Saudia), the King Faisal Specialist Hospital and Research Center in Riyadh, and the commercial aspects of Hajj and Umrah pilgrimage services.
The National Center for Privatization (NCP), the body set up by the Council for Economic Development Affairs (CEDA) to coordinate the privatization program in collaboration with other government agencies, made the list available in response to a request from Arab News.
Hani Alsaigh, the NCP’s director general of strategic communication and marketing, said: “The NCP is working hard with other partners to oversee the efficient and strategic transfer of the Kingdom’s government assets to the private sector. The ambitious privatization program set out in Vision 2030 is expected to increase the private sector’s contribution to national (gross domestic product) from 40 percent to 65 percent, which will take place over a number of years.”
A value of $200 billion has been put on the privatization program over the next few years, double the estimated value of the Aramco IPO, making it one of the biggest sell-offs of state assets in history, bigger then the groundbreaking British privatization program of the 1980s and the dissolution of Soviet assets the following decade.
The other eye-catching items on the NCP’s potential “for sale” list include the Saline Water Conversion Corporation, the King Abdullah City for Economic and Renewable Energy, government universities, the Saudi Health Council, and Saudi Post.
According to an NCP briefing paper, the key objectives of the privatization program are to improve the efficiency of the national economy and enhance its competitive ability to meet the challenges of regional and international competition, as well as encouraging private-sector investment. It seeks to encourage ownership of productive assets by Saudi citizens while encouraging domestic and foreign investment... see more