JEDDAH: All Saudi airports will be privatized this year, the head of the General Authority for Civil Aviation (GACA), Abdul Hakim Al-Tamimi, told Aleqtesadiah daily.
GACA’s privatization strategy aims to transfer all Saudi airports to companies wholly owned by the Saudi Civil Aviation Holding Co., then transfer ownership of the holding company to the Public Investment Fund (PIF).
The aim “is to improve the level of services provided to passengers, and to convert the targeted sectors into a profitable center to cover costs and to be a source of income for the owner,” Al-Tamimi said, adding that the privatization will be implemented via three methods.
The first relates to the transfer of an airport to a company, similar to what is happening at King Khaled International Airport in Riyadh, where a minority holding is sold. Then an airport board of directors is formed that has powers in the management of the company.
The second method is operation and maintenance, similar to what happened at the new King Abdul Aziz International Airport in Jeddah.
GACA will bear the capital cost of establishing the project, and will share the income with investors.
The third method is the BTO (build, operate and transfer) system, such as what was done with Prince Mohammed bin Abdul Aziz Airport in Madinah, and with Taif, Hail, Qassim and Yanbu airports, which signed contracts with investors.
The employees will be transferred to the investor’s responsibility, who bears the capital cost of the project and shares the income with the authority.
The head of GACA said the privatization will be completed in stages and in the form of groups.
“GACA will be the regulator and controller of the aviation sector in the next phase, in the event of concluding the privatization process,” he said.
Saudi Arabia has hired Goldman Sachs to manage the sale of a stake in King Khalid International Airport, the first major privatization of an airport in the Kingdom, three sources familiar with the matter told Reuters.
The sources said the Saudi Civil Aviation Holding Co. plans to sell a minority stake in the airport, without disclosing a timeframe for th sale.
The size and estimated value of the stake were not immediately known, but the airport is Saudi Arabia’s second-largest after Jeddah’s King Abdul Aziz International Airport.
Faisal Al-Suqair, chairman of the Saudi Civil Aviation Holding Co., said the conversion of airports to companies is the first step in the privatization of airports.
“These airports, after being transferred to companies, will be re-arranged to operate on a commercial basis and become more efficient practically and financially before they are privatized,” he said.
Source : Arab News