RIYADH – The new Private Sector Participation Law (PSL) that came into force in July has granted a private sector entity powers to collect fees and taxes from service users and credit them directly to its own account. This is in return for the services it provides in accordance with the partnership contract signed between the public and private sectors, as determined by the Ministry of Finance. As per PSL, which was approved by the Council of Ministers in March and came into force on July 24 this year, covers relationship between the public and private sectors, arising out of a contractual arrangement that relates to infrastructure or the delivery of public services. The PSL enables the private sector entity to be granted the right to collect fees from service users directly; collect public revenue, including fees and taxes due to the state treasury; and collect public revenues directly. All this will be in accordance with the terms of the public and private partnership (PPP) contract. The private sector entity will not be entitled to impose additional charges on service users, unless expressly permitted by the PPP contract. The supervisory committee will be tasked with granting the required approvals for partnership projects whose value is less than SR500 million per contract between the public and private sectors under its supervision. The Prime Minister will be allowed to authorize any partnership contract between the public and private sectors concluded by a relevant agency, and signed without obtaining prior approval from the competent authority. The Prime Minister can also authorize approval of the privatization project document in the form of direct contracting, whatever its value, as well as a public-private partnership project, which includes the transfer of ownership of assets in the manner of limited competition, regardless of their value. The Council of Economic and Development Affairs (CEDA) will be the competent authority regarding the approval of any of the concerned bodies' acquisition of shares in the capital of the Privatization Project Company. The Board of Directors of the National Center for Privatization (NCP) will be the competent authority to approve any PPP project, regardless of its value, in the event that the PPP project is offered through limited competition, or award the PPP project in the event of grievances against the unresolved offering and award procedures or issue directive to stop the awarding procedures until such grievances are resolved. The NCP board is also to decide on the period of the original PPP contract or after renewal or extension that exceed 30 years, as well as the termination of the executive authority for the PPP contract between the public and private sectors. CEDA approved the Privatization Program as part of the Saudi Vision 2030 Realization Program in April 2018. The objectives of the Privatization Program included strengthening the role of the private sector by unlocking state-owned assets for investment; improving quality of services; reducing government spending; and attracting foreign direct investment. These objectives are described as being "in full alignment with Vision 2030". The National Center for Privatization, which was established in 2017, reports directly to CEDA. The NCP is responsible for implementing the Privatization Program by issuing regulations, creating a strategic framework for privatization and preparing government assets and services earmarked for privatization. The law makes important changes to the regulatory environment in which PPP and privatization projects are undertaken in the Kingdom.
