Riyadh: The new Private Sector Participation Law (PSL) that came into force in July has granted a private sector entity powers to collect fees and taxes from service users and credit them directly to its account.
PSL, approved by the Council of Ministers in March and came into force on July 24 this year, covers the relationship between the public and private sectors, arising out of a contractual arrangement related to infrastructure or public services delivery.
A supervisory committee will approve partnership projects worth less than SR500 million per the contract between public and private sectors under its supervision.
The Prime Minister will authorize any partnership contract between the public and private sectors concluded by a relevant agency and signed without obtaining prior approval from the competent authority. In addition, the Prime Minister can also authorize acceptance of the privatization project document in the form of direct contracting, whatever its value, as well as a public-private partnership project, which includes transfer of ownership of assets in the manner of limited competition regardless of their value.
CEDA, the Council of Economic and Development Affairs, will be the competent authority regarding the approval of any of the concerned bodies’ acquisition of shares in the capital of the Privatization Project Company.
CEDA approved the Privatization Program as part of the Saudi Vision 2030 Realization Program in April 2018. The Privatization Program’s objectives include:
- Strengthening the private sector’s role by unlocking state-owned assets for investment.
- Improving the quality of services.
- Reducing government spending.
- Attracting foreign direct investment.
The objectives of this privatization are “in full alignment with Vision 2030”.