Saudi Arabia plans to launch public-private partnership (PPP) multi-billion dollar transport projects in 2020, under an ambitious strategy to diversify the economy and create jobs, the newly-appointed transport minister told Reuters.
To reduce dependence on oil revenues, Riyadh aims to have the private sector operate much of its transport infrastructure, including airports and sea ports, with the government keeping a role as regulator.
The government expects real economic growth of 2.3 percent next year, supported by non-oil sectors.
“Saudi Arabia has an impressive transportation and logistics infrastructure, where about 400 billion riyals ($106.7 billion) have been invested in the last 10 years only. The plan is to continue investing while increasing private sector participation,” Saleh bin Nasser Al-Jasser said.
The new projects will include the expansion of Riyadh’s airport along with five other regional airports. The ministry is also planning a railway project linking Dammam in the Eastern Province to the Red Sea city of Jeddah through the capital.
Jasser said the ministry was in talks with a company owned by the Chinese government for the project, without naming it.
“The funding will come through the private sector, either through PPP or government-to-government…these are big projects worth tens of billions of riyals,” Jasser said.
Riyadh has set a goal of generating 35 billion to 40 billion riyals ($9.3 billion to $10.0 billion) of non-oil state revenues from its privatisation programme by 2020. Some of that money would come from asset sales, while the rest would come from public-private partnerships.
In March, a Saudi official told Reuters that six public-private partnership deals worth around $3.5 billion were sealed in the first quarter 2019 and at least 23 more are expected by 2022.