Saudi Arabia ratifies major privatization plan
The Saudi cabinet has ratified plans to sell its shares in big public firms including the Saudi Telecommunication Company (STC) and industrial giant Sabic. Revenues from the sell-offs will be used to pay off the Kingdom’s domestic public debt, valued at $168 billion.
The government has not specified the amount of shares it will privatize nor a timetable, however it did list roads and railway, water desalination, aviation, ports, airport services, hotels and medical services as sectors slated for liberalization, reported SPA.
The Saudi government began the telecom privatization process back in 1998 by passing control of the national services to the joint stock STC. Gradually taking over fro the Ministry of Post, Telephone and Telegraph (PTT), STC carried out major telecommunication projects kingdom-wide, while treading a path that would eventually enable it to operate on a commercially competitive basis.
The private sector was expected to acquire equity participation in the STC by the end of 2000 with the option of foreign involvement. However, this was delayed when the Saudi Supreme Economic Council announced that foreign investors were banned from involvement in the local telecom sector.
Seeking to service internal debt and narrow the budget deficit, the Saudi government has been shifting toward privatization policies in recent years. The buildup of government domestic debt rose to 92 percent of the gross domestic product (GDP) in 2001. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
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