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Saudi Arabia to Privatize Customs Zones

Saudi Arabia to Privatize Customs Zones

Thursday, 30 June, 2022 - 08:15
Saudi Arabia seeks to improve the quality of land port services by engaging the private sector. (Asharq Al-Awsat)

Saudi Arabia launched a Request for Qualification (RFQ) for its public-private partnership (PPP) Customs Zone project.

The privatization program in Saudi Arabia aims to enhance the role of the private sector in providing services, improving quality, and reducing costs.

It also boosts diversification and economic development and increases competitiveness to meet regional and international challenges.

Zakat, Tax, and Customs Authority (ZATCA), in cooperation with the National Center for Privatization and PPP (NCP), announced the new collaboration in line with Vision 2030.

The project seeks to upgrade the Secured Zone facilities and develop a modern template for infrastructure design and operations at six land ports.

It also facilitates commercial growth, enhances the competitiveness of land ports, and promotes the role of the private sector in implementing strategic projects.

ZATCA said the project facilitates the movement of goods and services across borders, promotes commercial growth, and generates social and economic benefits.

It improves service quality, reduces demurrage, attracts private sector capital and expertise, and improves the travel experience, transportation, and work environment.

The land ports included in the project are al-Durrah, Al-Haditha, Halat Ammar, al-Khafji, al-Bat'ha, and al-Wadiah to be implemented under a Design, Build, Finance, Maintain, and Transfer (DBFMT) model for a term of 20 years, excluding construction period.

The project provides long-term agreements to interested parties with expertise in the private sector by offering a public competition.

The Saudi Ports Authority (Mawani) stated that the private sector's local and international parties interested in the project could submit requests via the request for expression of interest, after which the qualification phase will be launched.

Projects to provide marine services constitute a significant factor in developing the port sector, applying international best practices, and attracting the best-specialized partners in the field.

Mawani seeks to boost the Kingdom's position as a global logistics and trade hub that supports national plans for comprehensive development and contributes to developing a sustainable and prosperous maritime transport sector.

The Saudi Cabinet recently approved the transfer of the assets of the Saline Water Conversion Corporation (SWCC) to the PIF-owned Water Solutions Company.

Meanwhile, the Saudi Electricity Company announced it transferred its entire stake in the Saudi Power Procurement Company (SPPC) to the government.

SPPC became an independent company wholly owned by the government following the completion of all legal arrangements for the sale and transfer of assets, liabilities, and contracts.

SPPC will be responsible for the competitive tendering of renewable and conventional energy projects to keep pace with the growth in energy demand, manage commercial agreements to purchase and sell energy, rationalize fuel consumption, and increase efficiency.

The transfer of ownership of the SPPC to the government will raise the efficiency and improve the overall service in the electricity sector, which will benefit consumers and producers alike.

Under the Business Transfer Framework Agreement (BTFA), SEC (Seller), SPPC, and the Ministry of Finance (Buyer) entered into a Fuel Inventory Sale Agreement, which stipulates that the Buyer must pay the net book value of the fuel inventory to SEC according to the Seller's financial statements as of June 30.

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