Chapter 4 - Criteria for Setting Priorities and Continued Implementation of the Privatization Program
In accordance with Council of Ministries No.257 dated 11/11/1421 A.H. [February 5, 2001], the Supreme Economic Council shall determine which activities are to be privatized, in addition to those recommended for privatization by other public enterprises. A list of the activities to be privatized shall be issued by Resolution of the Council of Ministers. The Privatization Committee of the Supreme Economic Council, in coordination with the competent agencies, shall begin privatizing the recommended projects on a selective basis and in accordance with the criteria for selecting projects to be privatized.
Approval of the Council of Ministers is required for implementation of the sale, upon the recommendation of the Supreme Economic Council. Approval may also be required from the Royal Court with respect to matters that obstruct the implementation of the privatization program, such as issues related to restructuring, conditions of sale, or government returns.
A. Criteria for determining priorities in selecting enterprises to be privatized
With the goal of enhancing the productive capacity of large public enterprises and projects, the priorities for selection for privatization are based on:
- Positive effect on the national economy.
- Readiness of enterprise for privatization.
- Social benefits of privatizing the enterprise such as increasing employment opportunities, making optimal use of the work force, and ensuring the continuation of just increases in individual incomes.
- Inadequacy of the services provided by the public enterprises.
- The absorptive capacity of the Capital market.
B. Continued implementation of the privatization process
After the enterprises and projects to be privatized have been selected on the basis of the above-mentioned criteria, an implementation program will be developed comprising a sequencing of the various activities in the privatization process: selecting a group of public enterprises and projects, beginning the privatization procedures, and developing and adhering to a timetable, leading to the creation of a privatization program that ensures coordination and control of the timing for offering shares of the privatized company for sale, in a manner that does not adversely affect the capital market.