Minimum limit for a public-private partnership project shall be SR 200 million, as per regulations of the Privatization Law

The revised executive regulations of the Privatisation Law stipulate that SR 200 million is the minimum amount for a project involving a public-private partnership. According to the regulations, initiatives involving the transfer of asset ownership must have a minimum value of SR 50 million.

Details of the revised Privatisation Law rules were released on Friday by Saudi Arabia's official gazette Umm Al-Qura, after the revisions' endorsement on December 31, 2023, by the National Centre for Privatisation & PPP (NCP) Board of Directors. The 169 items in the rules include topics such as the fundamentals of privatisation, the project's minimum worth, and the standards for implementing the system on privatisation initiatives.

The Council acknowledged that the Privatisation Law was produced by utilising both local and foreign experiences in the implementation of privatisation projects when it adopted the executive rules of the law.The regulations' third article outlines the privatisation project's minimum worth. Based on the executive entity's anticipated value for the target assets, it establishes SR 50 million as the minimum value for the transfer of asset ownership project.

Additionally, it states that a project involving a public-private collaboration must have a minimum budget of SR200 million. After taking into account each of the following factors and making sure that the minimum is satisfied in any of them, the competent executive entity estimates the total nominal value expected during the project duration, which is the basis for setting the limit.

1. The capital and operating costs, including those associated with government-owned property for which the private sector has been granted all rights, including the transfer of ownership, if appropriate.

2. The possible monetary liabilities that may arise for the public treasury.

3. The anticipated sum of money that the government will get.

In order to achieve the minimal requirements outlined in this article, the executive entity may, in accordance with Article 3, combine several projects that are comparable in terms of their scope and contractual arrangement.

In the event that the minimum is not fulfilled and the appropriate authority determines that the infrastructure or public service project must proceed, the project's regulations and guidelines will come into play.

The legislation's rules and regulations will be applied to privatisation projects that are offered or contracted by government-established or held businesses that have more than 50% of their capital owned by the government, either directly or indirectly. Establishing or holding such businesses is done with the intention of providing proposals for privatisation.

As per the amended regulations, a company is deemed established or owned by the government for the purpose of privatization if it meets any of the following criteria:

1. The company is established with the approval of the relevant authority based on the privatization project document for the purpose of implementing the asset ownership transfer process.

2. The establishment or ownership of the company by the government is for the purpose of offering a project related to infrastructure or public services through privatization.

3. Companies wholly owned by the government whose establishment included the transfer of asset ownership related to public infrastructure by the government.