​​Riyadh, Shujaa AlbuqmiTurki A. Al Hokail, the CEO and board Member of the National Center for Privatization (NCP) in Saudi Arabia, confirmed that the privatization processes will contribute in developing the national economy and increase the Kingdom of Saudi Arabia's competitiveness at a global scale. He added “Privatization will increase the level of efficiency and productivity internally, which will enable the Kingdom to harness all its financial and human resources (productively), which consequently, will support the Kingdom's global competitiveness.” Through his interview with “Asharq Al-Awsat”, Alhokail also emphasized that the National Center for Privatization is committed toward its goals in creating an environment that allows the private sector to expand its contribution to the national economy sustainably. This will enhance the quality of life and services provided to the citizen. He acknowledged that NCP is not the only decision-maker in the privatization processes. However, NCP is an effective element within an integrated system that aims to complete the privatization processes and achieve 'the Saudi Vision 2030' Alhokail said: “the kingdom’s ambitious goals, which aims to increase the Foreign Direct Investment (FDI) from 3.8% of GDP to a broader international level of 5.7% and increase the private sector's contribution to the national GDP from 40% to 65% are all possible goals to be achieved.” 

 

 

The following is the interview in full:

 

The National Center for Privatization is considered a global center of excellence, the question here is: How could that be achieved?
The National Center for Privatization's vision aims to be a global center of excellence to fulfill the Kingdom's vision for privatization. The NCP will assign goals to support the economy's growth for the citizen and the investor. Moreover, NCP is pleased to implement its mission and create an environment that allows the private sector to expand their contribution to a sustainable national economy, boosting the quality of life for the Saudi people. Furthermore, the center works according to core principles: transparency, flexibility, sustainability, creating value, efficiency, and productivity. Also, NCP operates according to the best privatization standards and frameworks, distinguishing it in the Middle East.
Thus, the National Center for Privatization is distinctive because of its contributions in achieving the target sectors’ development goals, which is consistent with the plans to attract investors globally.

The Saudi Vision 2030 is considered an ambitious vision that will transfer the economy away from oil dependency. In your opinion, how can the National Center for Privatization achieve this vision?
The Vision 2030 is grounded by the government’s efforts to upgrade the Saudi economy by motivating the private sector, diversifying the economy, improving the labor market, privatizing public assets or services, repairing the support system, reforming the capital market, and achieving its other pillars.
On the other hand, the privatization program will participate in improving the efficiency of the targeted sectors' performance. Consequently, this will improve those sectors' services, increase job opportunities for Saudi nationals, diversity for services and products, and create a competitive environment for the citizen's benefit.
Privatization will contribute to the development of the national economy and increase the Kingdom’s global competitive standing. In addition, privatization will attract foreign investments that will, in turn, benefit the national economy and increase the level of efficiency and productivity internally. Thus, the Kingdom will have the opportunity to harness all its material and human resources "productively", which supports the global competitive advantages for our country.

 

Is the national center for privatization the only legislator or do the targeted sectors have the ability to make decisions?
This is a very important question. The National Center for Privatization is not the only legislator. However, NCP is an effective member of a complete system that aims to fulfill the privatization program and achieve 'the Saudi Vision 2030'. Furthermore, the center is a member of the Privatization Supervisory Committees (PSCs). Those committees are supervising the technical, financial, legal, and legislative aspects and set a business plan that follows global privatization standards. The NCP is a permanent member of those PSCs in addition to the ministry of the targeted sector and the ministry of finance.
This system facilitates the process of privatizing the targeted sectors by formulating regulations, setting the legislation frameworks, preparing the implementation plans and timelines, overcoming the barriers, and maintaining the quality through follow-ups.  

What is the extent of the expected commitment to the National Center for Privatization’s objectives and how can this commitment be achieved in the future?
First, let me clarify: the NCP supervises the different privatization initiatives, which come under other supported programs. The NCP will prove them with the needed values and experiences.
Returning to your question, the NCP works hard to provide an organizational framework for the different projects and build a privatization model for each targeted sector. The NCP ensures the preparedness of those sectors, meeting the government's standards as well as clarifying the general directions for privatization in the Kingdom. The government also extends its support to the targeted sectors.
Without a doubt, the rate of commitment to the NCP’s objectives is very high. The NCP is working hard to achieve these goals for we are at the forefront of a new stage in Saudi’s economy, which requires a lot of work and vitality. However, we are lucky for the national talents at the NCP have become a distinguishable mark for the center. Furthermore, the National Center for Privatization has people with expertise in legal, financial, advisory, strategic, project management, risk, marketing, human resources, and public-private partnerships.

The Kingdom aims to increase the private sector’s contribution to the GDP by 65%. How will this be achieved?
Privatization helps increase the private sector’s contribution to the GDP. The Saudi Vision 2030 aims to raise this contribution to 65%. Therefore, it is important that we all work towards achieving this goal.
Of course, Public Private Partnership will produce huge economic and commercial entities that can create jobs. These partnerships can stimulate and diversify the economy. Privatization, in general, will increase the private sector’s contribution to the GDP and the economy’s vitality and will decrease the country’s dependency on oil as a major source of income.
The kingdom’s ambitious goals, which aims to increase the Foreign Direct Investment (FDI) from 3.8% of GDP to a broader international level of 5.7% and increase the private sector's contribution to the national GDP from 40% to 65% are all possible goals to be achieved. These goals will support the Saudi economy, which is the largest one in the GCC, Middle East, and North Africa region, with a strong track record of growth, high investment rates, and stable monetary and exchange rates.

What is the core strategy that the NCP applies and how can it be implemented?
The NCP is a global center of excellence for privatization, which contributes to the development objectives for the targeted sectors.  This will be done in accordance with the relevant plans, decisions, and programs, coordinating the required efforts, flexibility, and efficiency within the privatization process.
This strategy will be established through the active participation in privatization processes and programs. Therefore, the core role of the NCP is cooperation with all concerned sectors.

​How can NCP supervise and then perform all of the Kingdom’s privatization initiatives?
The NCP works in cooperation with all the relevant parties to implement the privatization initiatives. Also, NCP supplies all the required tools, access points, guidelines, models, and experiences that can be utilized in each initiative and supports the success of these initiatives.
The center has high-efficiency workforces who can accomplish, work, and innovate. This is what we have seen through their determination to achieve their goals, in order to benefit the national economy.

What are the privatization steps? Are they scalable according to market variables or are they fixed?
First of all, the privatization process steps, to establish a strategy for the targeted sector, include mapping the market structure, the active number of institutions, and the competition level then identify opportunities and support the set goals.
Furthermore, the privatization process has a step that ensures institutional, technical, and organizational readiness by recognizing the regulatory barriers that face privatization and carrying out technical feasibility studies. The process also includes financial examinations and evaluations through audits and analysis that help inform the financial restructuring needed and the social and the economic impact in detail.
The privatization process’s steps include making deals by organizing and managing exhibitions and events with investors, issuing tenders, identifying competitors, evaluating tenders, negotiating contracts, and making transactions. In addition, it includes quality control after privatization, which is done by monitoring the partners’ performance, according to the Key Performance Indicators (KPIs).
The second part of your question, I guarantee that those steps are '' flexible'', not '' fixed''. As you know that generally, the economy requires flexibility and vitality. Furthermore, the effective governance requires "flexibility" and rapid interaction with market variables.
The transfer the public sector employees to the private sector is organized within the privatization process, which is a significant task in this process. This transfer will offer many incentives that support the rights of public sector employees under the civil service system, turning them into employees working under the social insurance system. Also, they will be offered the opportunity to attend training programs to increase their competence, under the management of the private sector, and gain all the advantages of private sector employees.

How can "governance" be applied in the work of the NCP? What is the expected impact?
The NCP applies the highest levels of "governance". There is a series of process and procedures that have been assigned to ensure the application of the basic principles of ''governance''. This series starts from the Advisory department through periodic meetings held by the Privatization Supervisory Committees (PSCs), and other meetings held by the executive team and the project management office, as well as meetings of the project teams and their management meetings. Meanwhile, the advisory department provides its analysis to the PSCs who, in turn, are responsible for raising these outcomes after studying them to the Council of Economic and Development Affairs (CEDA). Then, the final report will be submitted to the council of ministers. Undoubtedly, the NCP is fully committed to the requirements of "governance", thus committed to the success of the privatization program, hopefully.

Did the NCP set a specific timeline to implement the initiatives or it is flexible?
There are specific initiatives related to the privatization process. Each initiative has its own timeline, objectives, and details. It is hard now to set the time plan to implement these initiatives because of the various requirements and the rapid changes. Thus, it is important to be adaptable. However, in the Kingdom, the privatization process is going according to set plans. There are many target sectors for privatization such as Environment, Water, and Agriculture sector, whose stakeholders are the Ministry of Environment, Water and Agriculture; The Saline Water Conversion Corporation; General Authority of Meteorology and Environmental Protection; and National Water Corporation; the Saudi Wildlife Authority; and the National Water Company. Another example is Transportation sector, whose stakeholders include the Ministry of Transport; General Authority of Civil Aviation; The Public Transport Authority; Saudi Ports Authority; Saudi Arabian Airlines Organization; and Saudi Railways Organization.
While the Energy, Industry and Mineral Resource sector’s stakeholders are the Ministry of Energy, Industry and Mineral Resources, the Royal Commission for Jubail and Yanbu, King Abdulaziz City for Science and Technology, King Abdullah City for Atomic and Renewable Energy, Saudi Authority for Industrial Cities and Technology Zones (Modon), and the National Industrial Clusters Development Program. The Labor and Social Development sector has only one stake holder the Ministry of Labor and Social Development. Within the Telecommunications and Information Technology sector, the Telecommunication and Information Technology is its stakeholder as well as Saudi Post and “Yesser”: The E-government Program. The Education sector’s stakeholders are the Ministry of Education, the General Organization for Technical and Vocational Training, and public universities. The Municipalities sector concern The Ministry of Municipal and Rural Affairs. In the Hajj & Umra sectors, the Ministry of Haj and Umra will be its stakeholder. The housing sector also only concerns the Ministry of Housing. Finally, the Health sector involves The Ministry of Health; the Saudi Health Council; and King Faisal Specialist Hospital and Research Center General Organization. The center is still working to suggest more sectors for privatization, propose investment opportunities, remove barriers, and speed up the privatization process.

What is the expected social impact of privatization in the Kingdom?
The privatization will improve the quality of the services, provide more job opportunities for the Saudis, introduce new investment channels, boost expenditure efficiency, improve quality ratings, and increase the level of competitiveness. Thus, the Saudi society will see the positive impact of privatization. Furthermore, we are constantly working and striving to achieve those positive results.

Alhokail: Establishment of the National Center for Privatization will contribute to the achievement of «Vision 2030».

Turki Alhokail, the CEO and Board Member of the National Center for Privatization in Saudi Arabia, explained at the beginning of his dialogue with «Asharq Alawsat» the role of the National Center for Privatization and why Saudi Arabia decided to form it. Alhokail said: “The National Center for Privatization was established by the Council of Ministers Decision No. 355 dated 7/6/1438 H, and is linked organizationally to the Council of Economic and Development Affairs (CEDA). Under the Council of Ministers’ decision, NCP can lead the privatization process through the development of programs, regulations, and requirements for the establishment of public private partnerships; the proposal of sectors and activities that can be privatized; the use of tools and studies to analyze the benefits and risks of privatizing targeted sectors; the evaluation of the developmental and economic impact; the assessment of readiness of the macroeconomic privatization programs; the management of risks; and the training of different entities for qualification in privatization”.
He added: “The National Center for Privatization is responsible for governance by identifying the necessary standards and frameworks in the preparation of studies, ensuring the readiness of the target sectors for to privatize, achieving the technical and financial requirements, and identifying the Key Performance Indicators (KPIs) for each initiative’s privatization process. All these actions will be done in coordination with the concerned authorities to create the correct foundations for the management of projects. However, they will review the privatization plan then monitor and follow up. NCP will use the follow ups to create periodic evaluations and ensure the timetable is adhered to, and intervene if necessary to resolve any and all obstacles”.
Alhokail continued: “There is no doubt that the National Center for Privatization, which has been established to support the privatization of government assets and services in a number of sectors, has established a methodology for privatizing and configuring government agencies to support this transformation, ensuring the quality of its outputs. The NCP is a permanent member of all the Privatization Supervisory Committees (PSCs) established by Council of Ministers Decision No. 665 of 8/11/1438 H. It provides strategic advice and support to the PSCs and provides the necessary assistance to identify opportunities for partnership between the public and private sectors.” Alhokil stressed that the Kingdom's decision to form the National Center for Privatization is only in order to ensure the realization of the Vision 2030. It is the ambitious vision that will move the economy to the post-oil stage through the optimal investment of all the qualitative advantages enjoyed by the Saudi economy.

 

Source:

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