NCP Delivery Plan English PDF

Privatization Program
( Delivery Plan 2020 )

A Saudi Vision 2030 Realization Program
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‫ﺧﻄﺔ ﺗﻨﻔﻴﺬ ﺑﺮﻧﺎﻣﺞ اﻟﺘﺨﺼﻴﺺ‬
‫‪Table of Contents‬‬
1 VRP Scope ........................................................................................................................................6

A. VRP Description .................................................................................................................................................... 8
B. Direct Level 3 Objectives .................................................................................................................................. 12
C. Indirect Level 3 Objectives ............................................................................................................................... 12
2 VRP Aspirations............................................................................................................................ 14
A. 2020 Commitments ........................................................................................................................................... 16
B. VRP Metrics and Targets ................................................................................................................................... 17
3 Current situation .......................................................................................................................... 24

A. Main Challenges ................................................................................................................................................. 26
B. Current Efforts ..................................................................................................................................................... 28
4 VRP Strategy ................................................................................................................................. 30

A. Strategic Pillars .................................................................................................................................................... 32
B. Strategic Considerations ................................................................................................................................... 38
C. Cross pointswith other VRPs .................................................................................................................................. 39
5 Privatization Program Initiatives Portfolio and Timeline ................................................... 43

A. Initiatives Portfolio ............................................................................................................................................. 45
B. Selecting Game-Changers ....................................................................................................................................... 57
6 Risk Mitigation and Required Actions ...................................................................................... 60
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1 VRP Scope
A. VRP Description
B. Level 3 Direct Objectives
C. Level 3 Indirect Objectives
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VRP Scope
A. VRP Description
The Privatization Program’s overarching objective is to strengthen the role of the private sector by unlocking
state-owned assets for investment. Privatizing selected government services will improve quality of services
and reduce government’s spending while taking into account citizens’ interest; it will also help the
government to refocus its efforts on its legislative and organizational roles. Moreover, the program will
attract foreign direct investments and improve the balance of payments. These objectives are in full
alignment with Vision 2030.
Privatization is the transfer of ownership of specified assets or services from the government to the private
sector. The transfer of ownership can be done in several forms, e.g. (not exhaustive) full/partial assets sale,
IPO, management buy-out, PPP (BOT), concessions or outsourcing.
The scope of the Privatization VRP encompasses the following three pillars:
1) Establishment of legal and regulatory basis, including:
Develop General Legislative Frameworks for Privatization & PPP:

To enable the execution of privatization transactions and to develop clear paths to these
transactions through which these transactions can be governed. This requires the establishment of
regulatory rules and procedures and addressing the obstacles and legislative gaps that exist in the
regulatory environment in general. In addition, this framework is intended to increase regulatory
fairness, transparency, and integrity in privatization transactions as well as to enhance the benefits
(whether economic or social) of privatization.
Develop the Legislative Frameworks of Targeted Sectors for Privatization:

This involves a comprehensive review of the entire regulatory environment in that sector, and then
identifying development areas that are compatible with the role of the government as regulator and
the role of the private sector as an operator (including a review of many aspects of the sector such
as pricing services, as well as identifying relationships between entities operating in the sector and
aspects of consumer protection and other technical aspects).
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2) Establishing institutional basis that contributes to the existence of capable entities to implement
privatization in the manner and mechanism that preserves the interests of the government and guarantees
the fairness of the process for participants from the private sector, including:
Developing the structural mechanism of the “Opportunity Explorer”: A regulatory approach will
be developed to explore potential projects for the public-private partnership and asset-sale.
This approach can be designed in such a way as to ensure that the preliminary survey study
replaces the initial feasibility study and this shall save time and efforts.
Optimizing the Privatization Supervisory Committees (PSCs) and Execution Teams (ETs) and
enabling them to attract the talent and manpower to assist the Privatization Supervisory Committees
and Execution Teams to prepare, steer and execute the privatization program. By operationalizing the
committees and their teams sufficiently, this will greatly enhance the success of the Privatization
Program according to the considerations of the interests of the government and the fairness of the
process and the sustainability of the privatization model. This will include proper assessment and
development of the targeted privatization sector so that it is more attractive to investors.
Define privatization strategies, metrics and incentive mechanisms: After operationalizing the
Supervisory Committee for the sector, each PSC works to develop the sector’s privatization strategy
according to the specific objectives and in accordance with the statutory procedures. Then, privatization
metrics and standards will be developed for that sector and the development of elements in the
environment surrounding privatization initiatives will stimulate privatization.
National Center for Privatization and PPP (NCP) Enablement: NCP will work on developing or
proposing frameworks that will enable and govern privatization transactions. NCP will also ensure that
the preparations and executions are carried out in accordance with the approved governance
frameworks and to increase efficiency of the Center.
Privatization/PPP Innovation Center: Privatization operations are complex and go through numerous
stages and processes. This may result in a loss of emphasis on the importance of the design of the
privatization initiative to achieve the desired benefits from it. Therefore, the establishment of this center
ensures that the benefits in the minds of privatization employees are not overlooked. The Privatization
Innovation Center will be established to develop solutions and initiatives that enhance the desired
benefits of privatization and PPP (such as, increasing the local content and enabling the participation of
Small and Medium-sized Enterprises).
3 (Steer privatization programs initiatives):

Participation in Privatization Supervisory Committees through NCP.
Review of sector-specific strategies and regulatory initiatives
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Monitoring of implementation progress and recommend the changes to the Council for Economic and
Development Affairs (CEDA) if needed.
The Privatization VRP is managed by NCP and has a robust governance structure. This structure has been
developed after studying various international models and is in alignment with the Council of Ministers
Resolution number (665) 08/11/1438H (which was issued to establish PSCs for each sector). The roles of
various entities involved in the governance are explained below:
1) Strategic Management Committee (SMC), part of Council for Economic and Development Affairs
(CEDA) are leading the achievement of Vision 2030. They direct all twelve VRPs, including the
Privatization Program and provide guidance on any strategic decision or issues resolution.
2) The VRP Committee is the direct oversight body of the Privatization Program. It approves
recommendations of the VRP Office and reports to SMO/CEDA. It decides whether program-related
issues need escalation or not.
3) The VRP Office is responsible to monitor and report progress of the Privatization program. It supports
PSCs with development and implementation of privatization strategy and initiatives, through the NCP,
and prepares or updates initiatives budget requests, and identifies any program-related issues. Having
a consolidated view of the program, the VRP Office helps ensure coherence and alignment across the
PSCs through NCP. The VRP Office directly reports to the VRP Committee and is in regular contact with
PSCs and ETs.
4) The PSCs and ETs are the sector-specific privatization supervisory and execution bodies; there
responsibilities include: Sector strategy development including forming the execution teams and
managing consultants, develop sector privatization strategy in-line with NCP guidelines and national
objectives and present them to CEDA for approval. Responsibilities also include readiness and
enablement (conduct readiness assessments (technical, financial and legal) and identify gaps, develop
readiness plans and ensure their implementation, identify and seek approvals for sector specific
regulatory changes); Initiatives execution (such as approve privatization models developed by the
execution teams and ensure their alignment with the national strategy, standards and regulations, reach
out to investors, conduct negotiations and sign contracts, manage the implementation of the
privatization opportunities, and periodically report to CEDA).
Initiatives execution will be carried out through the Execution Teams, which will assist the Supervisory
Committee to carry out all studies and prepare the necessary decisions to be taken through the
concerned Supervisory Committee. Each Supervisory Committee shall include an execution team
appointed by the concerned committee based on the powers granted to it to perform the tasks related
to privatization and shall be submitted to the members of the committee for decision-making.
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5) NCP is the enabler of privatization. It houses the VRP Office and supports PSCs and ETs in the
execution of their privatization efforts by providing privatization processes, legal and regulatory
expertise. Responsibilities include: Policy making (develop national privatization and PPP regulatory
framework, develop PSCs rules and procedures, review sector regulatory framework). Responsibilities
also include privatization frameworks (develop sector privatization standards and guidelines to fulfill
national privatization objectives), and monitoring /reporting (review sector privatization strategies and
ensure their alignment with the sector privatization standards and guidelines, review and validate
privatization opportunities, review readiness plans and follow up on their implementation; review
technical, financial and legal analyses during transaction execution; follow up on execution progress
and escalate to CEDA where necessary), and also what falls under NCP will also provide execution
support (when requested by PSCs, manage the execution of privatization opportunities including
definition of privatization and PPP models, reaching out to investors, developing the strategy of local
and external communication, marketing, strategic communication, and provide all contact information
for the privatization process for investors, and conducting analyses and negotiations/deal closure) and
prepare a strategic communication plan to ensure consistent communications between NCP and the
Supervisory Committees.
The program scope does not encompass the following activities, as these are covered by other institutions:
• Development and regulation of traditional private sector projects with the public sector – this
includes legal and statutory regulations and procedures for working with the private sector outside
the umbrella of “privatization” and “private sector participation projects”
• Creating overall privatization strategies for industries and sectors as well as privatization models,
as this is done by the PSCs and ETs
• Dealing with assets which are owned by the Public Investment Fund, as they are covered by the
Public Investment Fund Program
• Dealing with residential real estate assets which are unlocked for private sector usage by
contractors and real estate developers, as they are covered by the Housing Program
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B. Direct Level 3 Objectives
The Privatization Program supports two main vision objectives:
3.1.2 - Unlocking state-owned assets for the private sector.
3.1.3 - Privatizing selected government services.
C. Indirect Level 3 Objectives
The Privatization Program also supports 11 indirect objectives. These indirect objectives were shortlisted
based on the Privatization Program initiatives scope, to include the ones that were impacted by the
Privatization Program initiatives:
2.1.1 Ease the access to healthcare services.
2.1.2 Improve value of healthcare services (quality of outcomes and experience, and cost).
2.3.1 Improve quality of services provided in Saudi cities.
3.1.4 Develop an advanced capital market.
3.1.6 Attract foreign direct investment.
3.5.1 Establish and improve the performance of logistics centers.
4.3.2 Grow SME contribution to the economy.
5.1.2 Diversify government revenues— maximize revenues from state-owned assets (e.g. Enterprises).
5.2.1 Design a leaner and more effective government structure.
5.2.2 Enhance performance of government entities.
5.2.5 Improve quality of services provided to citizens.
The exact indirect metrics by initiative will be designed, baselined and monitored by the PSCs and the
NCP.
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2 VRP Aspirations
A. 2020 Commitments
B. VRP Metrics and Targets
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VRP Aspirations
A. 2020 Commitments
To achieve Vision 2030, the Privatization Program shall commit to the realization of a number of successes
by 2020, which will constitute the foundation needed to realize2030 ambitions.
The program will work to achieve an incremental GDP impact through increasing private sector investment
(both domestic and foreign). In addition, the program is expected to generate sales proceeds for the
government and net savings (including Capex and Opex) for government and generate new jobs
opportunities in the private sector by 2020.
A. 2020 Commitments
Metrics 2020 Commitment
Contribution to GDP SAR ~13-14 Billion
Total government proceeds from asset sales

SAR ~35- 40 Billion
(driven by PSCs)
Government net savings (Capex & Opex)

SAR ~ 25-33 Billion
from privatization/PPP (driven by PSCs)
Government net saving (Opex) from

SAR ~ 1 – 1.2 Billion
privatization (assets sale)1
New private sector jobs created 10,000 – 12,000
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Does not include assets transferred to companies
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B. VRP Metrics and Targets
The Privatization VRP includes macro-economic metrics, program-level metrics, metrics on

game-changers as well as metrics linked to indirect objectives. In the following, these metrics
and targets which the program seeks to achieve will be laid out and explained in detail.
2016 2020
Metric Unit
Basis Target Note
1) Contribution to GDP SAR M n/a 13.827
2) non-oil government revenues SAR M n/a 35,000-40,000
3) non-governmental investment SAR M n/a 60,993
Macro-
4) Impact on balance of payments SAR M n/a 40,060 A
Economic
metrics 5) Creating new jobs at the private sector # jobs n/a 10,000 – 12, 000
6) Contribution to the local content SAR M n/a 4,800 B
7) Consumption rate SAR M n/a 8,337 B

8) Inflation rate % n/a 0.42% B
1) Number of government assets privatized per number of 5
0 D, E
year/total assets to be privatized by 2020 assets
2) Total government revenue from asset sales SAR M 35,000-40,000 F
# of PPP
Program 3) Total number of PPP investments 0 14 F,G
contracts
metrics
4) Total value of PPP investments SAR M 0 24,000-28,000 G
5) Govt. net savings (Capex & Opex) from

SAR M 0 25,000-33,000 H
privatization/PPP
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2016 2020
Metric Unit
Basis Target Note
1) Ports corporatization: Dwell time Days 11 3-5

Game-
changer % of
private
initiatives
2) Privatize production sector of SWCC: ownership
0% 100%
metrics Privatization of Al-Khair Station of Ras Al
Khair
station
The development of the “Opportunity Completion

0% 100%
Explorer” structural mechanism rate
A. Negative impact on BoP primarily driven by National Renewable Energy program where majority of plant equipment /
machinery is expected to be imported. Improvement through Local Content Strategy expected.
B. Privatization program with insignificant impact on this metric (according to Center for Strategic Development (CSD).
C. The individual plans for each initiative will independently evaluate the number of new private sector jobs created. This will
also illustrate the realized cost savings (Capex & Opex) as well as additional private sector investment through PSCs as a result
of sectorial studies for each committee.
D. Note that once an asset sale happens (even if partial) the asset is considered as privatized and subsequent stake sales in the
same asset cannot be counted.
E. The PPP investments are part of the following initiatives: Attract private investments to finance the establishment of
educational buildings, Operate public schools under the name of an "independent school", PPP for new medical center of
Saudia Medical Services, PPP for public transport projects , National Renewable Energy Program, Primary care PPP, Hospital
commissioning and medical city PPP, Extended care (rehabilitation and long-term care) PPP, Radiology PPP, Laboratory PPP,
Parking PPP, Waste Recycling Plant PPP, MOMRA asset optimization PPP, Privatize services of 35+ rehabilitation centers.
F. Consisting capital expenditure savings and savings on operating expenses. (Excluding government revenues).
Indirect objective Proposed metrics (examples)

2.1.1 Ease the access to healthcare • Waiting time for GP appointment in PHCs developed
services through “Primary care PPP”
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• Waiting time for admission in new hospitals created
through “Hospital commissioning & medical city PPP”
• Waiting time for rehabilitation/long-term care bed
developed through “Extended care PPP”
A. Number of “zero events” in primary care units and hospitals
concerned by healthcare-related privatization initiatives
• B. Patient satisfactions is measured via questionnaires
developed by King Faisal Specialized Hospital and Research
Center as one of the specialized initiatives
2.1.2 Improve value of healthcare
• C. Measuring patient satisfaction of services provided by
services (Quality of outcomes and
PHCs developed through “Primary care PPP”
experience, and cost)
• D Measuring patient satisfaction of the diagnostic
radioecology services developed through “Primary care
PPP”
• E Measuring patient satisfaction of the laboratory services
Metrics developed through “Primary care PPP”
linked to 2.3.1 Improve quality of services • User satisfaction of parking services (measured by survey)
indirect provided in Saudi cities (utilities, after roll-out of “Parking PPP” initiative
public transport, etc.)
objectives • ECM activity (SAR M) generated from privatization
initiatives
3.1.4 Ensure the formation of an * This includes the parallel financial market such asNomu market,
advanced capital market and other parallel markets that arise later.
• DCM activity (SAR M) generated from privatization
initiatives**
3.1.6 Attract foreign direct • FDI net inflows (SAR M) generated from privatization
investment initiatives.
3.5.1 Create and improve • Ports’ dwell time for the nine corporatized ports.
performance of logistic hubs
4.3.2 Grow SME contribution to the • SME share of privatization transactions (by sector).
economy
5.1.2 Diversify government • YoY revenue growth after privatization (by entity).
revenues – maximize revenues
from state-owned assets
• Capex & Opex savings from corporatization of 9 ports
5.2.1 Design a leaner and more
• Capex & Opex savings from transportation sector initiatives
effective government structure
• Capex & Opex savings from corporatization of KFSH&RC
5.2.2 Enhance performance of • Number of privatization milestones achieved (by entity)
government entities
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5.2.5 Improve quality of services • Already captured above
provided to citizens
*ECM: sales processed issued in domestic capital markets through or primary or secondary equity issuance.
**DCM: debt raised through bonds and sukuk domestically.
Please note: The metrics linked to indirect objectives have to be further refined once the PSC’s have developed their sector-
specific strategies. Metrics will be updated at that time.
Explanation of Metrics:
First: Contribution of the Privatization Program to the macro-economic metrics
The Privatization Program team has defined, in collaboration with relevant entities including Center for
Strategic Development (CSD), and the entity responsible for jobs creation. The information and data
supplied by the government agencies targeted for the privatization process were based on the following
details:
- Regarding the contribution of the program to GDP, the CSD calculated this based on the information
provided by entities. It should be noted that the key driver of the impact on GDP is non-governmental
investment.
- As for the contribution to non-oil revenues, it has been calculated based on the information provided by
owners of the privatization initiatives. The key driver on this scale is the expected revenues from the
privatization.
- The contribution of the program to non-governmental investments has been calculated based on the
information provided by owners of the privatization initiatives. The main driver of such impact is non-
governmental investment.
- With regard to the contribution of the program to the creation of jobs in the private sector, the contribution
of the program is derived from privatization projects (particularly PPP projects), where it is expected to
create jobs. The Job Creation Commission has calculated the percentage of participation based on
information and data received from the targeted parties of the privatization.
- Regarding the contribution of the program to local content, consumption rate and inflation rate, it was
calculated by the National Center for Strategic Development (CSD) and the responsible entity for job
localization.
Note that the 2016 baseline of all the above metrics is n/a (not applicable) as this is a new program and
because the initiatives that constitute the Privatization Program are incremental in nature. For example, the
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public-private-partnerships (PPPs) that will be created through the PPP-related initiatives do not exist at
present. Hence, their current impact on all metrics (such as GDP, job creation, etc.) cannot be determined. If
these initiatives will not be executed, there will be no impact either. For the initiatives that are related to
privatization of existing government entities, our impact calculation is equally incremental. In all metrics,
we only capture the difference achieved through the privatization. If these initiatives will not be executed,
there will be no impact.
Second: Program Metrics

Program metrics have been set to measure and guide the impact achieved as required. These metrics reflect
the program’s priorities from Vision 2030.
Due to the potential huge varieties at the markets conditions during privatization implementation phase,
the impact parameters was set with upper and lower limits, especially the assets sales revenue and net
investment.
Rationale for target/trajectory for program metrics (“1”) (Number of government assets which have been
privatized.): As per guidance from SMC in pulse-check meetings, the VRP selected 23 impact initiatives to
be tracked through this program in accordance with the governance model contained in this document. Out
of these, five are privatizations of existing government assets; through asset sales.
Note that during the coming period, a number of initiatives will be implemented, particularly of importance
(Ports corporatization, privatize some services at the transportation sector, Privatize KFSH&RC to a Not for
Profit). Since all of the processes do not involve private sector engagement as they are limited to transition
to companies or preparatory actions, they are not expected to be privatized in the strict sense before 2020,
which is why they are excluded from this metric.
Rationale for target/trajectory for program metric “2” (total government proceeds from assets sales): As
privatization comes in two forms: assets sale and PPPs. Since the sale of assets generates direct financial
proceeds to the government, it was necessary to set this metric to show the expected proceeds to the
government.
Rationale for target/trajectory for program metric “3” (total number of public-private partnership
investments): metric "2" shows targeted proceeds from asset sales (first privatization form), based on that,
there is a need to develop metrics for public-private partnership projects (second privatization form). This is
in line with the guidance from SMC in pulse-check meetings. The objective of this metric is to indicate the
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number of partnership projects expected by 2020. These initiatives are part of the 23 initiatives that the
Strategic Committee directed to be tracked through this program.
Rationale for target/trajectory for program metric “4” (total value of investments based on public private
partnership): metric (3) above shows the number of public-private partnership projects. It is therefore
necessary to indicate the total value of the investments resulting from the public-private partnership
projects as shown in metric 3.
Rationale for target/trajectory for program metric “5” (government net savings in capital expenditure and
operating expenses from privatization): Metric (4) shows the total investments resulting from the
partnerships. It is necessary to indicate the net savings that the government can achieve from these projects.
We recommend adding a metric to track: Percentage of services privatized per sector (through privatization
or PPP) as follows:
Each PSC identifies assets and services that are suitable to be privatized and includes it as part of its
sector privatization strategy.
Percentage of privatization is calculated from assets/services identified in the above step along with
continuous supervision from program.
Activation of PSCs are essential to this metric.
Example: After activating the PSC for sector ‘X’, the committee completes a sector strategy and identifies 100
privatization opportunities. If 10 of those opportunities are prioritized that year (after obtaining needed
approvals), the committee will have achieved 10% of the target. Opportunities that are excluded due to lack
of feasibility are excluded from the metric.
We will study adding a metric to track: Success of privatization operations (by sector) as follows:
The number of bids provided by the private sector for participation in privatization or PPP.
After receiving the bids from the private sector to participate in the privatization or PPP, there should be
a value for money assessment.
Enhance the level of service provided to users and allow it to larger numbers of beneficiaries
Third: Metrics of game-changer initiatives and other initiatives

There is a correlation between program metrics and game-changer initiatives metrics as well as other
initiatives. The reason for this, is that program metrics are based on game-changer initiatives metrics and
other initiatives. Therefore, it was necessary to present specific metrics for game-changer and individual
initiatives. Since game-changer initiatives have a special impact, its metrics have been identified. The
program initiatives are complex and cross-sectorial; thus, the other metrics will be laid out in detail by the
respective supervisory committee.
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Fourth: Privatization program contribution to realizing indirect objectives

As explained above, the program has a special nature because of its correlation with government sectors,
the program affects and is influenced by the initiatives in the sectors. Therefore, there is an opportunity for
the program to help achieve other indirect objectives, including raising the quality and efficiency associated
with the services of the targeted sectors. Hence, metrics examples linked to to measure the program’s
contribution in achieving these objectives. These metrics examples are defined from the Privatization
program initiatives and shortlisted based on their relevance for the indirect objective attributes. The final list
of metrics (along with targets) will be defined once the specific initiatives are further detailed by the PSCs
and ETs.
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3 Current situation
A. Main Challenges
B.Current Efforts
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To ensure that the program strategy is effective and applicable, and will achieve the desired goals, the
current situation has been studied from two angles: first, major current challenges and second, current
transformative efforts that fall within the program scope and are consistent with its ambitions. This section
details both aspects.
A. Main Challenges
To understand the main challenges, one must identify some important facts:
First: The KSA government has played a strong role by providing services, resulting in:
1. Government providing services that in other countries are provided by private sector companies.
2. Decrease in the share of the private sector within GDP (43 percent for KSA in 2016 compared to 58
percent top five European Union economies).
3. Perceived lower quality of services and/or higher costs of services.
4. Difficulty in the calculating cost centres within the government.
5. Government distancing itself from its legislative and regulatory role sometimes since it has been a
service provider. Therefore, there is no need to organize and monitor itself. In some cases, the
government plays a supervisory role in addition to its role as a service provider.
Second: Previous privatization efforts have been limited to certain sectors, though they have been focusing
on privatizing those sectors with sufficient expertise and knowledge to implement the privatization process.
Our current ambitions are that we need more effort to complete the privatization of more sectors.
Based on these two facts, the main challenges briefly are:
First: Limited experience of privatization within targeted sectors, as most of the experience are based on
pure technical background, The Kingdom of Saudi Arabia has gone through multiple efforts of privatization
and private sector engagement; however, these were limited to specific sectors that were mature enough
and professionally run. Hence, necessary expertise, knowledge and skills related to the privatization of state-
owned assets and activation of private sector engagement across the whole government are very low.
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Second: Lack of a sufficient number of domestic private sector companies with the adequate experience and
skills to take over privatized services, as they have not been involved in such services before since the
government was the only available service providers for many sectors. This has not provided sufficient
opportunity for private sector growth in these sectors. This is a challenge because there are fewer companies
available for privatization and ultimately less benefits due to privatization.
Third: Insufficient general legislative frameworks that enable privatization processes and enhance its
governance, vague procedures for obtaining approvals for the privatization process (in most sectors); and
vague procedures for the preparation and project processes. This is a major challenge because insufficient
preparation and execution of the privatization process will lead to reduced investor confidence and increase
the failure rates of the privatization process or implements these processes in the wrong way. On the other
hand, the privatization process intersects with many rules and regulations that may have obstacles or
legislative gaps that could hinder the privatization process or hinder the optimization of the privatization
process. These include corporate, bankruptcy, financing, competition and government procurement,
commercial mortgage. This is a challenging aspect as most of these systems were designed in light of the
role of the current government and the weakness of the private sector. For example, the government
competition and procurement system is the government's largest channel for contracting with the private
sector. In view of the nature of this system, the contracts that this system deals with contradict with the
essence of the privatization processes especially (public-private partnership).
Fourth: Insufficient regulatory base developed for target sectors. Since the government has historically been
operating the sectors, the need for frameworks and policies did not exist to govern relationships or regulate
pricing, competition, or consumer protection. The current situation is not attractive to the participation of
the private sector, as it is not interested in sectors where there’s no clear regulations or directory of
procedures that govern all the above-mentioned points, and that may stand in the way of reaping the full
benefits of privatization.
Identification of main challenges is a reoccurring exercise and this list will be updated regularly.
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B. Current Efforts
A number of initiatives have been put in place to help change and address key challenges. These initiatives
are as follows:
100+ privatization initiatives have been identified so far across 10 ministries.
Some initiatives are scheduled to be finalized by 2020 (e.g. sports clubs, grain silos, production sector
of SWCC). These initiatives include privatization of both governments owned assets sale and PPP.
Council of Ministers Resolution number (665) of 08/11/1438H, has been issued to establish PSCs for
each sector. The role of the PSC is to define the privatization strategy for the respective sector, to
identify the best suitable privatization model, and to drive the actual implementation. This resolution
will address a number of the major challenges mentioned above.
With the Resolution of the Council of Ministers No. 355 of07/06/1438H, the National Center for
Privatization has been established and designed as a Center of Excellence to enable and govern the
overall privatization process.
It can be said that there is a base of initiatives and projects on which the Privatization Program rely on in
addressing key challenges.
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4 VRP Strategy
A. Strategic Pillars
B.Strategic Considerations
C.Cross points with other VRPs
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VRP Strategy
A. Strategic Pillars
Achieving the Privatization Program’s ambitions requires three strategic pillars, which are establishing the
legal/regulatory basis, establishing the institutional basis, as well as steering the sector privatization
programs.
Pillar 1: Establishing the legal and regulatory basis; this includes:

Development of privatization general legislative frameworks:
The first aspect of this initiative is to enable privatization processes and its governance by setting clear and
specific procedures that increase the level of preparation and execution of privatization. This aspect will also
set standard and specific procedures for the process of offering privatization projects which will increase the
level of operational governance. It also includes rules of building working teams, appointing consultants
and communication with the private sector; and thus will help this aspect of solving a part of the main
challenges to ensure the achievement of the desired aspirations, and raise the level of transparency and
integrity in the privatization process. It is worth mentioning that the Council of Ministers Resolution No.
(665) dated 8/11/1438 H gave the Board of Directors of the National Center for Privatization the authority
to issue a number of rules, procedures, controls and standards that will form the core of this aspect.
As for the second part of this initiative, it includes reviewing the provisions of a number of regulations,
legislation and rules that intersect with privatization; and analyze them to identify the gaps and legislative
obstacles that may be contained within those regulations, legislations, and rules. Then, propose solutions
and work to address those obstacles which will enable the privatization process and ensure that it is
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attractive to investors, enhances the interests of the government and raises the level of achieving the
benefits of privatization. It is worth mentioning that the Council of Ministers has directed to exclude
privatization from government competition and procurement system for the above reasons. The Council of
Ministers also directed the National Center for Privatization (NCP) to draft a privatization project which
includes the necessary exceptions from the relevant regulations.
Develop legislative frameworks that govern the targeted sectors for privatization:
This involves a comprehensive review of the entire regulatory environment in that sector, and then
identifying development areas that are compatible with the role of the future government as regulator and
the role of the private sector as an operator (including a review of many aspects of the sector such as pricing
services, identifying relationships between entities operating in the sector and its structure, and consumer
protection and other technical aspects). The decision of the Council of Ministers No. (665) dated 8/11 /
1438 H indicated that every supervisory committee must conduct a comprehensive study that includes the
regulatory aspects. NCP will work with the supervisory committees and their execution teams to conduct
this comprehensive review and then identify the necessary steps to implement them.
Pillar 2: Establishing the institutional basis that would contribute to create entities that are able to drive
the execution of the privatization efforts in a controlled manner while maintaining government
benefits, guaranteeing fair contributions of the private sectors, and enhancing the quality of service
provided to citizens including:
The structural mechanism development of the “Opportunity Explorer”:

-private partnership and asset-A regulatory approach will be developed to explore potential projects in the public
he preliminary survey study replaces sale projects. This approach can be designed in such a way as to ensure that t
the initial feasibility study and this will save efforts. This approach will also include specific initial steps in
edcollaboration with relevant government agencies to help strengthen the base of projects to be discover.
Activation ofthe Privatization S upervisory Committees and Execution Teams:

As mentioned above, there is a scarcity of experience and skills in privatization. Thus, the activation of the
S upervisoryC ommittees will enable them to attract manpower and talent to assist them in the process of designing,
preparing and executing the privatization process. This is an important element for the success of the privatization
he government's interests, the fairness of the processaccording to the considerations of t,the sustainability of the
privatization model, and the achievement of desired benefits to citizens .
33
Identifying privatization strategies, indicators and incentive mechanisms for privatization:

Following the activation of the Supervisory Committee for the sector, it will work to develop the privatization
strategy based on specific targets of relevant sectors, in accordance with the regular procedures. Then, it will work
on developing indicators and criteria for privatization, and develop elements in the environment surrounding
privatization initiatives to stimulate privatization.
Enable the National Center for Privatization (NCP):

NCP will work on developing or proposing frameworks that will enable and manage privatizations. NCP will also
ensure that the designing, preparations and implementation are carried out in accordance with the approved
governance frameworks. It will ensure the level of efficiency of the system and ensure maximizing the benefit of the
system of expertise in privatization.
Privatization Innovation Center:

The privatization processes are complex and go through a relatively large number of stages and procedures. This
ign of the privatization initiative and will have an effect on may result in a loss of focus on the importance of the des
e desired benefits to achieveth from the program. The establishment of this center is to ensure that the benefits i
the minds of employees are not forgotten. .The Privatization ter develops solutions and initiatives Innovation Cen
the benefits of privatization that enhance (e.tion opportunitiesg, raising local content and raising SME participa).
This platform is essential for achieving the program's aspirations and facing the challenges. It is very
important to design the program to suit the local environment and address the challenges; therefore, it is
designed according to the following considerations:
• There are institutions that focus on stimulating and monitoring privatization.

• The importance of providing a unified view of initiatives in all sectors.
• A decentralized model has been selected as the institutional basis to govern privatization
international benchmarks indicate the best options would be somewhere between the centralized
model and a more decentralized model. The reason for this is that there is a need for reforms in the
targeted sectors for privatization, and it is difficult to obtain data and information on assets and
services targeted for privatization. The technical advantage of our model is that the workers are
closer to the technical aspects of the entity. And, this model will speed the preparation of
privatization in all targeted sectors, and the centralized element will ensure that all processes are
organized and managed for transparency, integrity and fulfilment of the necessary requirements by
one entity.
34
Accordingly, a strong governance model has been designed, in line with the Council of Ministries
Resolutions number (665) dated 8/11/1438 H and number (355) dated 7/6/1438 H, as follows:
• Strategic Management Committee (SMC), part of Council for Economic and Development Affairs
(CEDA) is responsible along with CEDA for the achievement of Vision 2030. They direct all 12 VRPs,
including the Privatization VRP and provide guidance on any strategic decision or issues resolution. The
strategic committee also reviews the recommendations of the supervisory committees and ensures
their strategic relevance in preparation for submission to the Council for Economic and Developmental
Affairs for their economic review, as well as the Council of Ministers for final approval if this is a
statutory requirement, whether the privatization project is to sell assets or partnership between public
and private sectors. Each Supervisory Committee will propose the appropriate privatization method
which should include an analysis of how the project will be offered to the public through public offering.
The strategic committee will review the proposed privatization method to ascertain the appropriateness
of the public participation model and the public offering.
• The VRP Committee is the direct oversight body of the Privatization VRP. It approves recommendations
of the VRP Office and submits reports to SMO / CEDA. It decides whether program-related issues need
escalation or not. The program's initiatives are being continuously reviewed and submitted to the
Strategic Committee and the Council for Economic and Developmental Affairs.
• The VRP Office is an office in the National Center for Privatization and administratively follows the VRP
Committee. The VRP office is responsible to monitor and report progress of the Privatization VRP
program. It supports PSCs with development and implementation of privatization strategy and
initiatives, prepares or updates initiatives budget requests, and identifies any program-related issues.
Having a consolidated view of the program, the VRP Office helps ensuring coherence and alignment
across the PSCs.
• The PSCs and ETs
Supervisory committees will be responsible for designing, preparing and implementing privatization
processes, including the development of the objectives of the privatization strategy for relevant sector,
appointing working teams and consultants, and working to raise the sector's readiness in all aspects
(technical, organizational, etc.). The committee will define the most appropriate model for privatization
in the sector, and conduct negotiations and conclude contracts necessary to implement the privatization
process according to the procedures followed, and the decision of the NCP. The revenues and savings
of the privatization will benefit the Treasury in general and this in accordance with the state revenues
system issued by Royal Decree No. (M / 6) and the date of 18/11/1431 H in line with the procedures,
rules, and instructions issued under the Royal Decrees and the relevant decisions of the Council of
Ministers.
35
• NCP houses the VRP Office and supports PSCs and ETs in the execution of their privatization efforts by
providing privatization processes, legal and regulatory expertise. Responsibilities: Policy making
(develop national regulatory framework, develop PSCs rules and procedures, review sector regulatory
framework). Privatization framework (develop sector privatization standards and guidelines to fulfill
national privatization objectives). Monitoring/ reporting (review sector privatization strategies and
ensure their alignment with the sector privatization standards and guidelines, review and validate
privatization opportunities, review readiness plans and follow up on their implementation; review
technical, financial and legal analyses during transaction execution; follow up on execution progress
and escalate to Council for Economic and Developmental Affairs (CEDA) where necessary). Execution
support (when requested by PSCs, manage the execution of privatization opportunities including
definition of privatization models, reaching out to investors, conducting analyses and negotiations/deal
closure). This is in addition to the role of NCP in the Supervisory Committees and its Execution Teams,
which in turn will ensure a center of expertise, which supports the privatization in general.
From the mentioned above, it can be said that the approval process of privatization projects (sale of
assets or partnership between the public and private sectors) is governed by the decision of the Council
of Ministers to approve the establishment of Supervisory Committees for the sectors targeted by
privatization. Each Supervisory Committee will be responsible for studying the privatization projects
and then propose the optimal model and method for the privatization process. After that, the
Supervisory Committee will submit a proposal for CEDA to get approval. The proposal of the
Supervisory Committee will be studied in several aspects, the most important of which is the strategic
aspect of the Strategic Committee in CEDA, which will consider the model of public participation
proposed by the Supervisory Committee. The proposal will be reviewed from an economic aspect by
CEDA, and after that it will be raised to the Council of Ministers if it is legally required. Then, the
Supervisory Committee will execute the initiative after issuing the necessary approvals under CEDA
supervision.
The achievements of this pillar can be divided into three main pillars: First, the PSCs and ETs must be
established and operationalized. Second, each sector needs to define its privatization strategy, taking
into account international best practices as well as sector- and kingdom-specific circumstances. In
addition to this, sector-specific privatization incentive mechanisms and metrics should be developed to
steer the execution. Third, existing supporting entities should be enhanced and further supporting
measures should be implemented. Specifically, the recently enacted Privatization Supervisory
Committees and Execution Teams have to become operational as soon as possible. In addition, the role
of the NCP should be further strengthened to provide required services as a true center of excellence
for privatization and to serve as a dedicated unit responsible to act as Privatization champion especially
36
for foreign investors to showcase current privatization efforts, recent successful privatization
transactions in addition to participating in relevant international forums. Also, the establishment of
additional capabilities such as an innovation center could act as further catalysts for the accelerating
privatization efforts.
Pillar 3: Steering the sector privatization program will ensure that the program initiatives are executed
on time. While there are 100+ privatization initiatives supported by NCP, the Privatization VRP will
focus on core sector-specific initiatives (23) which are regarded as important from an overall
transformation point of view for KSA. Note that PSCs are responsible to develop sector privatization
strategy in-line with NCP guidelines and framework. For each initiative, the business case/approach for
privatization will be detailed once the PSCs are operational. It should be noted that all sector strategies
are reviewed by NCP. This will ensure that sector strategies are aligned with the guidelines, there is
transparency and fairness in the privatization process followed and that any cross-sector trade-offs
and/or dependencies etc. are highlighted and resolved appropriately
37
B. Strategic Considerations
There are several strategic considerations, the main ones:
Consideration Description Decision taken and its consequences

International benchmarks indicate options between a
centralized model and a more decentralized model.
Given the fact that privatization is not only about
selling assets, but also PPP, market reforms, and
The responsibility of developing transformation, Thus, a model has been designed
the privatization strategy for each which sets between centralized and decentralized
sector and the best privatization models. The Privatization Supervisory Committees
model for each entity will be (PSCs) are mandated to evaluate optimal privatization
Execution responsibility
developed by the respective models and execute it based on official legal rules and
Privatization Supervisory procedures. The NCP acts as a center of excellence that
Committee in alignment with enables privatization and PPP initiatives and enhance
NCP’s rules and regulations governance through regulations, policy, procedures,
and advisory. Also, VRP Office will be responsible for
overseeing and steering the various privatization
initiatives to ensure adequate progress is achieved as
per the plan.
The SMC has taken the decision to leave the

The responsibility of privatizing
Privatization of PIF assets responsibility of the privatization of PIF assets with
PIF assets lies with the PIF.
the PIF
Making public residential The government owns The SMC has taken the decision to allocate the
real estate assets available considerable land which can be responsibility of the usage of government real estate
for private sector use used for housing purposes. for housing purposes to the Housing Program
Private sector can participate in

governmental services and assets NCP will develop rules, regulations, and guidelines for
Appropriate privatization in two methods: PPP and asset different types of privatization models. The PSC’s
method sales have to choose the appropriate method in line with
the sector-specific privatization strategy.
38
C. Cross-points with other VRPs
Potential trade-offs and interdependencies with other VRPs has been identified and addressed
as follow:
Trade-offs/ Interdependencies Relevant Programs Strategic Decisions
• Privatization is equally open to both foreign and

domestic investors, However, supporting SMEs
participation in the privatization process has been
Increase local organizations’ • National Companies
discussed (e.g. supporting SMEs and local content)
participation in privatization Promotion Program
while taking into consideration the importance of
assessing regulatory requirements and potential impact
in light of international treaties and trade agreements.
There is no scope overlap or

• Strategic Partnerships • Possible trade-offs and interdependencies should be
interdependencies identified with the
Program reassessed as both programs progress.
Strategic Partnerships Program
• Once the privatization method has been defined by

• Financial Sector the PSCs, there will be opportunities for private sector
Participation in the capital markets participation that will help in the development of the
Development
development initiative financial sector.
Program
•
• There are opportunities to list financial securities in

• Financial Sector
the stock market after the PSCs perform full evaluation
Capital market Development
of the privatization projects. There are also
Program
opportunities to increase IPOs.
• Fiscal balance Program will continuously get updates

on sectors and entities strategies and align on level and
Implementation of privatization timing of fiscal support (if needed) should be reflected
• Fiscal Balance
program aligned with government’s in the fiscal plans.
Program
fiscal plans.
• Financial contribution from the Program will help in
achieving the goals of the Fiscal Balance Program
39
• National Industrial
Support the Program through
Development and • Importance of alignment between privatization VRP
introducing reforms to selected
Logistics Program and NIDLP.
industrial and logistic sectors
(NIDLP)
• PIF Program
• National Companies
Promotion Program
Privatization of some assets • Continues alignment between PSCs and other VRPs
• National Industrial
Development and
Logistics Program
(NIDLP)
• National Companies
Promotion
• National Industrial • Ongoing alignment between these VRPs and the PSCs
Set of assets for privatization
Development and via relevant initiatives.
Logistics Program
• PIF
Some Housing initiatives enabled • initiatives whose main objective is to build affordable
through PPP might be relevant for housing on government residential real estates, fall
• The Housing Program
both Privatization and Housing under the Housing Program and execution
Program mechanism of the Privatization will be utilized.
Interdependencies: improve the

effectiveness and efficiency of • National
• Add municipal and social services within the priorities
municipal and social services through Transformation
of the privatization program (via relevant initiatives).
the privatization of some government Program
services
Potential interdependencies may exist

• Once the privatization sector strategies and initiatives
for the following shared strategic • National
are detailed by PSCs and the NTP initiatives are
objectives: Transformation
detailed, then potential interdependencies should be
Program
• 2.1.1 Ease the access to assessed.
healthcare services (e.g.
40

geographical locations,
availability, financial cost)
• 2.1.2 Improve the value obtained

from healthcare services (quality
of outcomes, experiences, and
cost)
• 2.3.1 Improve the quality of

services provided in Saudi cities
(utilities, public transports, etc.)
• 2.3.4 Enhance traffic safety
• 2.4.1 Reduce all types of pollution

(e.g. air, noise, water and soil
contamination)
• 3.1.1 Ease of doing business

(mainly regulatory aspects)
• 3.1.6 Attract FDI (foreign direct

investment)
• 4.3.2 Maximize SMEs

contribution to the economy
• 5.2.3 Improve productivity of

government employees
• 5.2.5 Improve quality of services

provided to citizens
• 5.4.2 Ensure sustainable use of

water resources
• Privatization Program will inform the National

• National
Public sector employees affected by Transformation Program (MLSD, HRDF, MOE) on
Transformation
the transition to the public sector. expected unemployment/transition impacts on public
Program
employees to the private sector
41

Published information about
• National
initiatives can be a key enabler for • Privatization initiatives to be published on the atlas
Transformation
attracting foreign capital required for portal in Q4 2017 to allow increased access to FDI.
Program
privatization
There are no interdependencies nor

trade-offs identified with the Quality
of Life Program. However, the
• Quality of Life
Privatization VRP will create synergies • Continues updates of interdependencies and trade-offs
Program
for this VRP through the initiatives
“Privatize Saudi Sports Clubs” and
“MOMRA asset optimization PPP”
As of now, there is no scope overlap or • Once the initiatives of the Saudi Character Enrichment
• Saudi Character
interdependencies identified with the program are further detailed, possible trade-offs and
Enrichment Program
Saudi Character Enrichment Program interdependencies should be reassessed.
There is no scope overlap identified

with the Dhuyuf Ar Rahman VRP.
• Once the initiatives of this VRP are further detailed,
However, the program does have • Dhuyuf Ar Rahman
possible trade-offs and interdependencies should be
some initiatives with privatization Program
reassessed.
elements, which may require support
from NCP
42
5 Privatization Program Initiatives

Portfolio and Timeline
A. Initiatives Portfolio
B. Selecting Game-Changers
43
44
Privatization Program Initiatives Portfolio and Timeline
A. Initiatives Portfolio
The Privatization Program’s ambitions, commitments, strategic pillars and strategic considerations have
been translated into a number of initiatives aiming to achieve the program commitments. These initiatives
also constitute a base on which the aspirations of Vision 2030 shall be achieved.
The current initiatives that have relevance to the program commitments have been reviewed and linked to
the strategic pillars. 100+ privatization initiatives were reviewed on criteria such as maturity of the initiative,
potential impact and transformational character as well as likelihood of immediate success, to create
momentum and visibility of action. As a result, 30 key initiatives were identified:
For Pillar I (Establishing the legal/regulatory basis), 2 key initiatives have been identified.
For Pillar II (Establishing the institutional basis), a total of 5 key initiatives have been identified.
For Pillar III (Steering the sector privatization program), a total of 23 key initiatives have been
identified.
As expected, adding new initiatives will require further study and analysis before they can be included in
the Privatization Program.
45
Program metrics
Expected impact by Leading Initiative Strategic Initiative
impacted by the Description Sector
2020 entity name pillar No.
initiative
Issuance of rules,
procedures and
controls/frameworks to
enable the privatization
Enabling the process and develop its
privatization processes governance by the Council
and its governance, of Ministers’ decision No.
thereby enhancing (665). Develop
opportunities of Develop a draft law on ment of
All - due to the
implementation, privatization to address the the
pre-requisite
attractiveness of obstacles and gaps facing All general 1
and enabling NCP Pillar I
opportunities to the the privatization process. sectors legislative
character of the
local and international Conduct a study to identify framewor
initiative
private sector and just the most regulatory ks for
transactions. This is a barriers contained in the privatizati
pull factor of new relevant laws and on
investments to the regulations. This initiative
privatization targeted forms part of the first
sectors. strategic pillar
(“establishment of legal
and regulatory
basis/framework”)
Increased
attractiveness of PSCs will review the
investment to the legislative frameworks
privatization targeted which regulates the sector
Develop
sectors through clarity (sector’s processes,
ment of
and justice of relations with other
the
All - due to the regulatory working entities, sector’s
legislative
pre-requisite environment that will structuring) therefore,
All framewor
and enabling regulate the assessing these PSCs Pillar I 2
sectors ks in the
character of the operational processes frameworks in the light of
targeted
initiative in the privatization the situation of the
sectors
targeted sectors after privatization targeted
for
the privatization sector after the processes
privatizati
process (this includes of privatization and
on
the clarity of the working on developing
market structure, them in accordance with
pricing, competition the established regular
46
and consumer procedures (law proposal,

protection). executive regulations
amendments).
This initiative forms part of
the first strategic pillar
(“establishment of legal
and regulatory basis”)
This initiative aims to

facilitate the process of
identifying opportunities
for PPP and sale of assets
(SOA) projects. A Structural
mechanism development
and opportunities
Enhancing the identification of potential The
expected benefits from projects of PPP and SOA. develop
the privatization This mechanism can be ment of
All - due to the program and that’s designed in such a way that the
pre-requisite through detecting new ensures through it that the All “Opport 3
NCP Pillar II
and enabling opportunities to help in initial survey study sectors unity
character of the the achievement of the replaces the pre-feasibility Explorer”
initiative program’s study. This will reduce the structural
requirements and burdens (costs) resulting mechanis
ambitions. from pre-feasibility studies. m
This mechanism, also, will
include specific initial steps
in cooperation with
governmental respective
bodies which will help
enhancing the business
base that will be
discovered.
Examining the This initiative aims to

contribution of developing models and
maximizing the ideas that will help in
All - due to the anticipated benefits of elevating the anticipated
Privatizati
enabling the privatization benefits from privatization All 4
NCP on Pillar II
character of the targeted sectors processes, where the sectors
Innovatio
initiative through innovative options of structuring the
n Center
models privatization process will
in opening the doors to be examined while taking
SMEs and reinforcing into consideration of
of local content. adopting new structures to
47
the local applications in

case proven to be feasible
in achieving additional
benefits as compared to
others.
Identifying the
operating and
operationalize the
governance model
governance and operating
required to activate/
model related to the
operationalize the SCs,
Privatization program,
working teams and Operatio
All - due to the particularly, PSCs and ETs
other actors/parties for nalize
enabling (working teams) that is All 5
distributed and clear PSCs PSCs and Pillar II
character of the required to steer the sectors
roles regarding the ETs
initiative privatization program and
privatization processes (working
execute it in different
to elevate the teams)
sectors. This initiative
implementation of the
forms part of the second
operational level and
strategic pillar
studies necessary for
(“establishment of
the privatization
institutional basis”)
processes.
Due to identifying clear
sector-specific
privatization strategy, This initiative aims to
each of the committees define clear sector-specific
(PSCs) will be able to privatization strategy and Developi
complete the privatization incentive ng
All - due to the
privatization process in mechanisms to accelerate privatizati
enabling All 6
its sector more privatization. This initiative PSCs on Pillar II
character of the sectors
effectively. forms strategies
initiative
Consequently, the part of the second strategic for the
economic and social pillar (“establishment of targeted
value resulted from the institutional basis”) sectors
privatization initiatives
in various sectors will
be maximized.
Maximize NCP’s efforts This initiative aims to

All - due to the
through identifying enable NCP to Empower
enabling
specific strategy and effectively steer the All ing NCP /
character of the NCP Pillar II 7
operating model to privatization efforts sectors NCP
initiative
streamline across the overall enableme
stakeholders’ ecosystem (Ministries, nt
interactions and PSCs and Execution
48
benefit from NCP’s Teams) by updating

expertise. NCP's strategy and
operating model and
develop the required
capabilities
-
This initiative will lead This strategy aims to
The
to follow the reduce the financial burden
Compet Attract
partnership system on the government by
ent private
-Total number with the private sector introducing alternative PPP
Committ investme
of PPP in construction, financing models for public
ee nts to
investments maintenance and schools. This initiative
(special Educatio finance
- Total value of transfer the property of forms Pillar III 8
operatio n the
PPP investments government schools. part of the third strategic
nal/ establish
- Government - The investments of pillar (“
executiv ment of
savings from the private sector in Steering the main
e education
privatization capital expenditure will initiatives of the
committ al
reach billions of riyals. privatization program”)
ee or buildings
and falls under the
SC)
education sector.

enhance learning
-Total number outcomes at selected
of PPP public schools through
transfer a small Operate
investments independency (thus, it is
number of public public
-Total value of called “independent
schools to enhance Educatio schools
PPP investment; schools”); This initiative
learning outcomes n under the Pillar III 9
- Government forms PSCs
create more jobs , name of
savings from part of the third strategic
lower the “indepen
privatization pillar (“
government’s dent
- New jobs Steering the main
expenditures while schools”
created initiatives of the
retaining MOE role.
privatization program”)
and falls under the
education sector.
-Total number
of government This initiative aims to
Ports
entities -Cumulative refresh the governance and
corporisat
privatized government savings; the strategy masterplan of PSCs Transpo
ion Pillar III 10
- Total Raising the value of the Ports sector to prepare rtation
(Game-
government these ports it for corporatization and
changer)
proceeds from significantly by 2030. privatization. This initiative
assets sales forms
49
- New private part of the third strategic

sector jobs pillar (“
created Steering the main
initiatives of the
and falls under the
transportation sector.
. Detailed study to identify

specific elements of this
initiative which will
contribute to the
-
transportation sector in
- Government
general.
savings from - government savings Enhance
This initiative forms Transpo
privatization in capital and PSCs transport Pillar III 11
part of the third strategic rtation
- New private operational ation
pillar (“
sector jobs expenditures. system
Steering the main
created
initiatives of the
and falls under the
The initiative is PPP to

create a new medical
-Total number
center in Jeddah and that’s
of PPP
part of the larger
investments PPP for
privatization program of
-Total value of Creation of new jobs, new
Saudi Medical Services.
PPP investments reduction of Saudi medical
This initiative forms Transpo
- Government Group healthcare cost PSCs center of Pillar III 12
net savings from and achievement of Saudi
pillar (“
privatization attractive financial Medical
Steering the main
- New private proceeds/revenues Services
initiatives of the
sector jobs (SMS)
created
and falls under the
50
. Detailed study to identify

-Reduce the burdens of
the government’s
contribute to the
– expenditures
Total number of -Engage the private Enhance
general This initiative
PPP investments sector to bear transport
forms Transpo Pillar III 13
- Total value of operational and capital PSCs ation
PPP investments expenditures system
pillar (“
- increase the
Steering the main
efficiency and improve
initiatives of the
the level of services
provided to the public
and falls under the
Detailed study to identify
- Total contribute to the
government The initiative is transportation sector in
proceeds from expected to contribute general. This initiative Enhance
assets sales in achieving the forms Transpo transport 14
PSCs Pillar III
- New private accumulated part of the third strategic rtation ation
sector jobs government’s proceeds pillar (“ system
created by 2020 Steering the main
initiatives of the
and falls under the
transportation sector
Detailed study to identify
-Total govt.
contribute to the
proceeds from
assets sales The initiative is Enhance
general. This initiative
- New private expected to contribute transport
forms 15
sector jobs in achieving the Transpo ation Pillar III
part of the third strategic PSCs
created accumulated rtation system
pillar (“
- Government government’s proceeds
Steering the main
net savings from by 2020
initiatives of the
privatization
and falls under the
transportation sector
51
This initiative represents

-Total number PPP and aims to enable
of PPP The initiative is production of energy from
investments expected to contribute renewable sources through
-Total value of in achieving PPP programs. This
Energy
PPP investments cumulative savings in initiative forms National
industry
- Government energy costs by 2020 part of the third strategic Renewabl
PSCs and Pillar III 16
net savings from and creating jobs from pillar (“ e Energy
minerals
privatization developing and Steering the main Program
- New private operating power initiatives of the
sector jobs plants. privatization program”)
created and falls under the power
sector.
This initiative aims to the

privatization of Saline
Water Conversion
Corporation (SWCC)
production sector through
-Total number sales of existing assets in
of govt. entities By 2020, the Ras Al- Ras Al-Khair and
privatized Khair Desalination establishment of new
- Total govt. Plant will be privatized entities through the Environ Privatize
proceeds from and the assets of other partnership with the ment, productio
asset sales productions will be private sector. By the year Water n sector
PSCs Pillar III 17
- Government studied for 2020, the first step will be and of SWCC
net savings from privatization to achieve the sales of assets in Ras Al- Agricult (Game
privatization capital and operating Khair. This initiative forms ure Changer)
-New private savings for the part of the third strategic
sector jobs government. pillar (“
created Steering the main
initiatives of the
and falls under the water,
environment and
agriculture sector.
Achieving government Privatize

, KFSH & RC will start
savings and progress KFSH&R
aiming to be transformed
Government net in specialized C to a
to a company owned fully
savings from healthcare and medical Health non- Pillar III 18
by the General Org. in
privatization research, as well as PSCs profit
preparation to be a non-
improving the patient organizati
profit organization. The
experience on
aim is to
52
corporatize KFSH&RC in
order to prepare for
privatization, become
financially independent
and a role model in the
health sector and help in
achieving its leadership
position through focusing
on innovation. This
initiative forms
part of the third strategic
pillar (“
Steering the main
initiatives of the
and falls under the health
sector.
Update and expand
-Total number primary care across KSA in
of PPP partnership with the
investments private sector to establish
-Total value of Achieving capital and new centers specialized in
PPP operating savings for primary care by the year
investments the government; 2020. This initiative forms PSCs Primary
Health Pillar III 19
-Government creating new jobs and part of the third strategic care PPP
net savings from improving the patients’ pillar (“
privatization experiences by the year Steering the main
- New private 2020. initiatives of the
sector jobs privatization program”)
created and falls under the health
sector.
Number of beds will be
-Total number
operated in the hospitals
of PPP
assigned to the private
investments
Achieving capital and sector; medical cities will
-Total value of
operating savings for be established by 2020. Hospital
PPP
the government; This initiative forms commissi
investments PSCs
creating new jobs and part of the third strategic Health oning and Pillar III 20
-Government
improving the patients pillar (“ medical
net savings from
experience by the year Steering the main city PPP
privatization
2020. initiatives of the
- New private
sector jobs
created
sector.
53
-Total number
of PPP PPP will help in providing
investments rehabilitation beds, as well
Extended
-Total value of as beds for long- term care
Achieving capital and care
PPP across the Kingdom by
operating savings for (Rehabilit
investments 2020. This initiative forms
the government; PSCs ation and
-Government part of the third strategic Health Pillar III 21
creating new jobs and Long-
net savings from pillar (“
improving the patients’ term
privatization Steering the main
experiences by the year care) PPP
-New private initiatives of the
2020.
sector.
Update and expand

- Total number
Radiology across the
of PPP
country in partnership with
investments
the private sector in order
- Total value of Achieving capital and
to respond to higher
PPP operating savings for
requests by the year 2020. Radiology
investments the government;
This initiative forms PSCs Health PPP Pillar III 22
-Government creating new jobs and
part of the third strategic
net savings from improving the patient
pillar (“
privatization experience by the year
Steering the main
-New private 2020.
initiatives of the
sector jobs
created
sector.
Update and expand
- Total number Laboratory across the
of PPP country in partnership with
investments the private to respond to
Achieving capital and
-Total value of more requests by the year
operating savings for
PPP investments 2020. This initiative forms
the government; Laborator
-Government part of the third strategic PSCs Health Pillar III 23
creating new jobs and y PPP
net savings from pillar (“
improving the patient
privatization Steering the main
experience by the year
- New private initiatives of the
2020.
sector.
This project is to This initiative is all about
-Total number
improve services: and PPP /Operate and manage Labor Privatize
of PPP Pillar III 24
provide better care, 35+ selected rehabilitation PSCs and services
investments
serve a greater number centers to provide world Social of 35+
54
-Total value of of patients and expand class diagnosis, treatment Develop rehabilita
PPP investments services to home-care. and care services. The ment tion
-Government One of the secondary initiative forms centers
net savings from effects anticipated is part of the third strategic
privatization improving operational pillar (“
- New private efficiency since these Steering the main
sector jobs centers will be initiatives of the
created managed and operated privatization program”)
by service providers and falls under the social
from the private sector. development sector.
-Total number Privatize parking to tackle
of government the economic and social
entities The program is detriments caused by
privatized expected to generate growth in car ownership
- Total government while achieving
Parking
government proceeds/revenues and operational net result. The
PPP/
proceeds from savings; jobs. The initiative forms Municip
Privatizati Pillar III 25
asset sales indirect effects include part of the third strategic PSCs ality
on
-Government decrease of traffic jam, pillar (“
net savings from promotion the safety of Steering the main
privatization passengers, reduce the initiatives of the
-New private percentage of pollution privatization program”)
sector jobs and falls under the
created municipality sector.
-Total number
Achieving the
of PPP PPP model for the
government’s savings
investments construction of a waste
and creating jobs. The
-Total value of management plant (Pilot).
other effects include
PPP The initiative forms Waste
reinforcement of
investments part of the third strategic Recycling
people’s satisfaction Other Pillar III 26
-Government pillar (“ PSCs Plant PPP
about the cleanliness
net savings from Steering the main
of the city and
privatization initiatives of the
reduction of the
- New private privatization program”)
percentage of
sector jobs and falls under the
consumed natural
created municipality sector.
resources.
The initiative aims to
-Total number establish PPP deals on
MOMRA
of PPP prime vacant land owned
Achieving the asset
investments by MOMRA in order to Municip
government’s savings optimizati Pillar III 27
-Total value of maximize land value added PSCs ality
and creating jobs. on PPP
PPP for the ministry. The
investments initiative forms part of the
third strategic pillar (“
55
-Government Steering the main

net savings from initiatives of the
privatization privatization program”)
-New private and falls under the
sector jobs municipality sector.
created
-Total number
of government
entities
privatized
Sell the milling assets to Environ
- Total
Achieve the four private sector players ment,
government The
government’s proceeds to improve product quality, Water
proceeds from specializ Privatize
and savings of the operational efficiency, and Pillar III 28
asset sales ed four flour
operational operational technology, Agricult
- Government committ mills
expenditures; elevate and raise human capital ure
net savings from ee
operational efficiency. level
privatization
- New private
sector jobs
created
Total number of The initiative aims to
govt. entities privatize the Saudi post
privatized services in order to reduce
Commu
- Total the financial burden on the
nication
government government. The
and Privatise/
proceeds from privatization takes place at
The model is under Informat PPP Saudi
asset sales the same time in various PSCs 29
study ion Post
- Government working units. This
Technol services
net savings from initiative forms part of the
ogy
privatization third strategic pillar (“
- New private Steering the main
sector jobs initiatives of the
created privatization program”)
-Total number
of govt. entities
privatized Privatize the Saudi
-Total govt. Professional League This The
proceeds from Achieving initiative forms part of the supervis
Privatize
asset sales government’s proceeds third strategic pillar (“ ory 30
Sports Saudi Pillar III
- Government and operational Steering the main committ
Sports
net savings from savings. initiatives of the ee of the
Clubs
privatization privatization program”) sports
- New private and falls under the sports sector
sector jobs sector.
created
56
Notes:
Pillar I Establish legal/regulatory basis.

Pillar II Establishing the institutional basis
Pillar III Steering the sector privatization program
Please note: The metrics linked to indirect objectives will be refined once the PSC’s have developed their sector-
specific strategies. Metrics will be updated at that time. The quantitative impact will be reviewed by the PSC’s in
line with the sector strategy and implementation roadmap.
B. Selecting Game-Changers
A number of initiatives have been identified as game-changers based on their expected impact. All relevant
entities will seek to implement all the above-mentioned initiatives; however, the game-changers will receive
special attention from the leadership to ensure their successful completion.
Selection of game-changers is based on two aspects: Impact and ease of implementation, with priority given
to the expected impact on the program – both direct and indirect. The evaluation results are detailed in the
appendix. Below is the list of game-changers and their expected impact. Additionally, the details of the game
changers will be discussed in the section that follows.
Initiative name Description Reason for selection Expected impact
Strategic importance for KSA

Refresh the governance and the
(also in connection with VRP Savings and government
Ports strategy masterplan of the Ports
"Position KSA as a global logistic revenues and upgrading
corporatization sector to prepare it for
hub"); Potential impact of later services.
corporatization
privatization
Pillar III
Privatization of Saline Water Crucial step in rearranging the

Privatize Conversion Corporation water industry and increase Savings and government
production sector (SWCC) production sector efficiency; Privatization will revenues and upgrading
of SWCC through privatizing Ras Al- result in important proceeds for services.
Khair government
57
Initiative name Description Reason for selection Expected impact
This initiative aims to facilitate

the partnership opportunities
between the two sectors, a
The development systematic approach will be Opportunity detector is chosen
of the created for potential cooperated to develop the suggested Enhancing the expected
“Opportunity projects between the public and projects and determine the best outcomes and increasing the
Explorer” private sectors, this approach partnership initiative potential objective
structural could be designed to maintain opportunities between the achievements opportunities
mechanism the initial survey and replace the public and private sector.
feasibility study, cooperating
with the related government
bodies.
Note: The privatization initiatives are now based on the National Transformation Program 2020. Privatization projects have been
allocated in cooperation with relevant authorities according to specific criteria. The pivotal initiatives have been identified due to their
high impact and specific criteria such as readiness and sector needs. On the other hand, a mechanism will be put in place to list a complete
list of all assets and to clarify the initial identification mechanism in coordination with the relevant authorities, including non-target
sectors.
58
59
6 Risk Mitigation and Required Actions
60
61
Risk Mitigation and Required Actions
The execution of the VRP may be interrupted due to several risks, which should be mitigated going forward. To effectively mitigate
these risks, Privatization VRP program will require active support from SMO/CEDA in terms of quick resolution of escalations and
enforcing decisions taken regarding respective entities (e.g. PSCs, other VRPs).
Risk #1 • Limited liquidity in KSA financial ecosystem that are ready to participate in PSP projects
Potential impact • High
• Privatization and PPP initiatives’ success depends on the ability and willingness of the private
Description sector to invest in them. Since KSA offers many investment opportunities, privatization initiatives
might suffer from liquidity shortage
• General: since the liquidity scarcity issue is structural in the KSA ecosystem, the risk can impact
Type
transversally the VRPs requiring private investments
• Maintain privatization initiatives open to the international markets, to diversify capital inflows
whenever sensible. Privatization investment attractiveness may be relatively higher in the
international market. International equity and debt capital markets can therefore be leveraged to
Risk mitigation measures fund KSA privatization initiatives (if required, define additional financial de-risking measures -)
• Consider phasing privatization efforts to avoid liquidity scarcity
• Ensure implementation according to international best practice (i.e. bankable transactions) to
increase international funds participation (i.e. debt and equity)
• PSCs and ETs for taking the right strategic decisions to ensure attractiveness for the private sector.
Entity responsible for the
NCP and FSD VRP supporting by sharing best practices and advice
measures
•
Timeframe to implement • Privatization-specific measures: to be implemented case-by-case, depending on initiative-specific
these measures timeline and context
62
Risk #2 • Changes in market conditions
Potential impact • Critical
• The current estimations on privatization impact are based on informed assumptions. The market
Description conditions at the time of transaction might be very different and, as such, impact the outcomes of
privatization.
Type • General: the risk can impact transversally all VRPs
• Plan the process well in advance and produce detailed studies in order to identify hedging
strategies and reduce uncertainty
• Identify ranges of expected valuations / proceeds based on best case and worst-case scenarios
Risk mitigation measures • Report timely to NPC and CEDA key market trends and their impact on current initiatives
underway
• Ensure implementation according to international best practice (i.e. bankable transactions) to
increase international funds participation (i.e. debt and equity)
• PSCs for planning and studies definition
Entity responsible for the
• PSCs and ETs for impact sensibility analysis
measures
• PSCs for market trends reporting
Timeframe to implement
• Measures to be implemented case-by-case, depending on initiative-specific timeline and context
these measures
63
64

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Privatization Program

( Delivery Plan 2020 )

1 VRP Scope ........................................................................................................................................6

3 Current situation .......................................................................................................................... 24

4 VRP Strategy ................................................................................................................................. 30

5 Privatization Program Initiatives Portfolio and Timeline ................................................... 43

6 Risk Mitigation and Required Actions ...................................................................................... 60

Develop General Legislative Frameworks for Privatization & PPP:

Develop the Legislative Frameworks of Targeted Sectors for Privatization:

3 (Steer privatization programs initiatives):

B. Direct Level 3 Objectives

The Privatization Program supports two main vision objectives:

3.1.2 - Unlocking state-owned assets for the private sector.

3.1.3 - Privatizing selected government services.

C. Indirect Level 3 Objectives

Metrics 2020 Commitment

Contribution to GDP SAR ~13-14 Billion

Total government proceeds from asset sales

Government net savings (Capex & Opex)

Government net saving (Opex) from

New private sector jobs created 10,000 – 12,000

B. VRP Metrics and Targets

The Privatization VRP includes macro-economic metrics, program-level metrics, metrics on

2) non-oil government revenues SAR M n/a 35,000-40,000

3) non-governmental investment SAR M n/a 60,993

6) Contribution to the local content SAR M n/a 4,800 B

7) Consumption rate SAR M n/a 8,337 B

2) Total government revenue from asset sales SAR M 35,000-40,000 F

5) Govt. net savings (Capex & Opex) from

1) Ports corporatization: Dwell time Days 11 3-5

The development of the “Opportunity Completion

Indirect objective Proposed metrics (examples)

Indirect objective Proposed metrics (examples)

Indirect objective Proposed metrics (examples)

Second: Program Metrics

Third: Metrics of game-changer initiatives and other initiatives

Fourth: Privatization program contribution to realizing indirect objectives

Based on these two facts, the main challenges briefly are:

Pillar 1: Establishing the legal and regulatory basis; this includes:

The structural mechanism development of the “Opportunity Explorer”:

Activation ofthe Privatization S upervisory Committees and Execution Teams:

Identifying privatization strategies, indicators and incentive mechanisms for privatization:

Enable the National Center for Privatization (NCP):

Privatization Innovation Center:

• There are institutions that focus on stimulating and monitoring privatization.

There are several strategic considerations, the main ones:

Consideration Description Decision taken and its consequences

The SMC has taken the decision to leave the

Private sector can participate in

C. Cross-points with other VRPs

Trade-offs/ Interdependencies Relevant Programs Strategic Decisions

• Privatization is equally open to both foreign and

There is no scope overlap or

• Once the privatization method has been defined by

• There are opportunities to list financial securities in

• Fiscal balance Program will continuously get updates

Trade-offs/ Interdependencies Relevant Programs Strategic Decisions

Interdependencies: improve the

Potential interdependencies may exist

Trade-offs/ Interdependencies Relevant Programs Strategic Decisions

• 2.1.2 Improve the value obtained

• 2.3.1 Improve the quality of

• 2.3.4 Enhance traffic safety