Like other GCC states, Saudi Arabia had enjoyed limited private sector participation outside its power and water sectors.

Power and water projects have dominated the kingdom’s public-private partnership (PPP) landscape, with a few exceptions that include the Hajj terminal at Jeddah’s King Abdulaziz International airport, the $1.2bn Prince Mohammed bin Abdulaziz International airport in Medina and the Red Sea Gateway terminal at Jeddah Islamic Port.

However, this is expected to change thanks to the kingdom’s long-term economic diversification programme. According to the National Centre for Privatisation & PPP (NCP), Saudi Arabia has a pipeline of more than 100 upcoming projects, with “more being added all the time”.

This marks a five-fold increase compared with the reported number of PPP projects in the kingdom just three years earlier.

The pipeline includes pure-play PPPs, management contracts, as well as privatisation projects such as the planned sale of the Ras al-Khair power and water plant.

Dozens of power, water, sewage and water transmission projects still dominate the PPP pipeline, but there is also an increasing number of projects in other sectors, notably in healthcare, education and transport

Regulatory framework

New regulations are expected to fuel non-power and water PPP projects going forward. A draft private sector participation law underwent public review in 2018 and a new General Tenders & Procurement law (GPTL) came into force in November.

In particular, the new GPTL aims to ensure effective allocation and management of the kingdom’s financial resources, reduce the influence of any personal interests that may harm the bidding process, and increase efficiency and transparency in the procurement process, according to UK-based law firm DLA Piper.

PPP pipeline

Dozens of power, water, sewage and water transmission projects still dominate the current PPP pipeline, but there is also an increasing number of projects in other sectors, notably in healthcare, education and transport.

The contract is due to be awarded for the first wave of the national schools PPP project, covering the development of 60 primary schools in Jeddah and Mecca. In addition to the 244-bed Al-Ansar hospital in Medina, the kingdom plans to develop two new medical cities and a new hospital in Yamamah.

Other planned projects include a car park in Riyadh; Ministry of Defence housing; Taif International airport; and the much-anticipated public transport schemes in Mecca, Medina, Jeddah and Dammam, each of which has an urban rail component.

Other entities, such as the Public Transport Authority (PTA), Saudi Aramco, Metro Jeddah Company and the Public Investment Fund-owned megaprojects, have their own PPP plans.

For PTA, these include the $10.6bn Saudi Landbridge project, the line linking the Riyadh-Dammam railway and North-South railway, a dry port and the electrification of the Riyadh-Dammam railway.

Aramco awarded housing PPP projects in 2016 and 2018.

The development companies behind the Red Sea project, Qiddiya and Amaala plan to implement multi-utilities packages using a PPP model.

Metro Jeddah is expected to seek interest for a waterfront transit-oriented development by the end of the year.

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> Algeria: PPP framework fails to modernise
> Bahrain: Manama ramps up its PPP plans
> Egypt: Mixed results for Egyptian PPPs
> Iraq: Crises and protests curb Iraq PPPs
> Jordan: Construction sector eyes PPP opportunities
> Kuwait: Corner turned on water and power schemes
> Lebanon: PPPs offer route to recovery
> Morocco: Rabat reforms legislation to spur PPPs
> Oman: Muscat risks PPP confidence loss
> Saudi Arabia: Riyadh refocuses PPP plans
> Tunisia: PPP plans draw broad support
> UAE: PPPs expected to take off in UAE
> Other GCC: Gulf state bolsters legislation to drive PPPs

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