Riyadh – Mubasher: A slew of Saudi Arabia’s industries are expressing interest in implementing privatisation as the GCC nation is pushing ahead with the crown prince’s “Vision 2030” reform plan in a bid to diversify the oil-dependent economy and invest more heavily in infrastructure, Oliver Wyman has said in a report.
The Kingdom must set clear-cut criteria to prioritise the assets and services that will be privatised in line with government objectives, a report titled “Creating a Sustainable Privatization Program – Realizing Saudi Arabia’s Vision for the Future” showed.
The basic criteria involve how complex privatisation is likely to be, the companies’ value, asset categorisation and assessment, and ownership policy, the international management consulting firm noted.
“A common practice, with clear benefits, involves the development of framework legislation. Doing so improves the transparency, consistency and effectiveness of the process, generating greater confidence in potential investors. As such, adopting framework legislation can increase the number and quality of prospective investors,” the report found.
The Saudi firms which are expected to be privatised include the Saline Water Conversion Corporation (SWCC), Saudi Electric Company, and the semi-governmental chemical firm Sadara.
“The rapid change in policies in Saudi Arabia suggests that the climate is ripe for privatisation in the Kingdom,” Jeff Youssef, partner, public Sector at Oliver Wyman stated.
On a separate note, as part of Saudi privatisation plans, the Kingdom is weighing up selling a 5% stake of state-run oil giant Aramco.
“Privatisation can accomplish much good if executed well, and we believe that the market currently will pave way for the ease of implementation,” Youssef concluded.
