Saudi Arabia to transfer airports to PIF-owned firm

Saudi Arabia plans to transfer ownership of the Kingdom’s airports to the Public Investment Fund (PIF) as part of its privatization drive, the official Saudi Press Agency (SPA) said, citing Mohammed al-Shetwey, aide to the General Authority for Civil Aviation’s (GACA) president for financial affairs.

Companies will be set up for each airport under Saudi Civil Aviation Holding, a spin-off from the GACA.

The holding company, which will be 100 percent owned by the PIF, will look after the operational side of Saudi Arabia’s airports. The authority, on the other hand, will continue to regulate the industry. 

A company has been set for Dammam's main airport, while work will start on Riyadh’s King Khalid International Airport after the Hajj season, Shetwey added. Earlier this month, Reuters reported that the Kingdom had appointed Goldman Sachs to manage the sale of a stake in the Riyadh airport. 

Meanwhile, Jeddah’s King Abdulaziz International Airport will start operations in H2 2018 under the management of Singapore's Changi Airport Group.

Elsewhere in the Kingdom, GACA will upgrade the existing airports in Qassim and Hail and will build a new one under a build-operate-transfer (BOT) model scheme in Taif, Shetwey said.

Saudi Arabia’s privatization plans are part of the country’s Vision 2030 initiative, unveiled last year, which aims to diversify its economy away from hydrocarbon reliance in the wake of falling oil prices which hurt the oil-rich country’s finances.

In June this year, the authority formally awarded contracts for the development of the Taif, Qassim, Hail, and Yanbu airports, MEED reported.

The contract to develop Taif International Airport was awarded to a consortium of Saudi-based Asyad Holding Group, Lebanon’s Consolidated Contractors Co. (CCC) and Germany-based Munich Airport.

Meanwhile, Riyadh-based Al Rajhi Holding Group and Turkey's TAV Airports won concession agreements for the development of Qassim’s Prince Naif bin Abdul Aziz Airport, Hail International Airport, and Prince Abdul Mohsin bin Abdul Aziz Airport in Yanbu.