Saudi Arabia eyes $200 bln revenue from privatization

Saudi Arabia expects to raise about $200 billion in coming years from privatizing government entities in various sectors including healthcare and airports Reuters reported on Thursday, citing Mohammed Al Tuwaijri, the deputy minister of economy.

The figure is based on detailed studies of valuations and Saudi market demand since launching the privatization plan about a year ago, Tuwaijri said.

The Kingdom is getting ready to sell some assets this year in four sectors: sports, power generation, water provision, and grain silos. It aims to fully or partially privatize enterprises in 16 sectors by 2020, the minister added.

The healthcare sector is seen as having the best potential for privatization, he said, noting that the government is studying whether to sell off all public hospitals and the country’s 200,000 pharmacies.

Among the first assets that will be offered is the King Faisal Specialist Hospital and Research Centre in Riyadh, one of Saudi Arabia’s top hospitals.

"We are in a very advanced stage - appetite has been secured, the model is being made by relevant government authorities, and the rest is literally market-, funding- and finance-driven," Tuwaijri 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.

Last month, the Saudi cabinet approved setting up a National Center for Privatization, based on a recommendation from the Council for Economic and Development Affairs.