PPP IN SAUDI-ARABIA: AWARENESS AND KNOWLEDGE INCREASE RAPIDLY-1

“We will further pursue public-private partnerships, continue to facilitate the flow of private investment and improve our competitiveness”

Saudi Arabia’s Vision 2030

In Saudi Arabia, Public Sector Participation (PSP) or “PPP” model is not only effective in the aims of the 2030 vision but also in the national transformation program (NTP). In this framework, last week, an intensive and comprehensive PPP training program was held under the coordination of KSA Ministry of Economy and Planning (MEP).

First, as Istanbul PPPCoE, we would like to give our thanks to Dr. Osamah Almuayyad and all those who contributed in the coordination, management and organization of this valuable training program.

In the NTP program the following statement is mentioned:

“It is our understanding that the Kingdom of Saudi Arabia (the KSA), as part of the National Transformation Program wishes to enhance the use of private sector participation in the delivery of public services and infrastructure.           

One of the recent models which mostly developing countries apply while they aim to reach sustainable development is the public private partnerships (the PPPs). We strongly understood that, as a crucial alternative, the model of PPP program is also in the agenda of the government of KSA.”

It is pleasing to see the relevancy of PPP rising day by day in Saudi-Arabia, but more importantly than this is the rapid increase of knowledge in the field of PPP. Each training program, each meeting shows the exponential rise of awareness of PPPs in the country. Last week, approximately 30 participants from 11 different ministries and almost 15 different organizations took part at the training program. From the beginning until the end of the fifth day of extensive program, the interest of the participants didn’t drop a bit in fact the program was based on questions and answers. This made it for us trainers easier to understand the need of the participants and showed us on which topics we should concentrate more in upcoming trainings.

The participants of the training program had either a wide range of knowledge and even experience of PPPs or no knowledge at all. The trainers were having a hard time challenging such a mix of participants and trying to balance the training program accordingly. At the first day of the training we asked the participants the following three questions:

  1. How many of you know the exact definition of PPP and understands its terminology?
  2. How many of you have experienced a real PPP transaction
  3. Who is excited of attending this training program and who is attending compulsorily due to your duty?

The answers for the first two questions were clear; 4 of the participants had knowledge of PPP and only one person took part in a PPP Project before. But the outcome for the third question was as follows: 8 participants were excited to attend the training program whereas 25 had a sceptic notion and attended because their organization demanded from them to be a participant of the training.

However at the end of the week, the asked questions, the evaluation and the questions and answers sessions showed us a positive change of perception of PPP at each participant. It was obvious that especially the performing Ministries will begin a detailed and extensive process.

During the training program many different topics were discussed. Important topics such as:

  • what the best PPP model might be,
  • where the sectoral diversities start,
  • where a standard documentation has to be made, were discussed during the training and shaped the understanding of each representative of PPPs.

Of course the experiences Turkey gained in the field of PPP will be a huge advantage for KSA. Precisely because of the similarity in culture, demand and public and private sector reflexes. Within 10 years’ time, which is not considered a long period, Turkey has realized many projects using the PPP model.

In this adventure the public sector gained experience in:

  • VfM,
  • feasibility studies,
  • planning and programming,
  • development of communication strategies,
  • contract management,
  • contract revision, re-writing, fine tuning,
  • negotiation techniques, negotiation stages,
  • risk management, risk assumption, development of guarantee mechanisms,
  • diversification of change management mechanisms,
  • efficient management of currency-inflation and similar value processes,
  • construction management and monitoring process,
  • development of relation with financial institutions,
  • access to international finance,
  • involvement of local banks in the projects,
  • development and expansion of private sector knowledge in management of PPP projects and more.

A Turkish proverb says: there is no need to discover America again, meaning that something that has already been tested once doesn’t need a second test; you can just make use of the experience gained. From this point of view it seems that good and bad implementations will add value and knowledge to KSA`s PPP adventure in the future.

I came back to Istanbul with notes, knowledge and outcome of discussions which will be the basis of my article series. I would like to end the first article which I believe has an adequate length. Additionally, I will start to make a SWOT analysis for KSA`s PPP for next week.

As the last word, I would like to share a part of the presentation of MEP which was held to all participants. The presentations aim was to point out the importance of the communication strategy on PPP perception in KSA. The part taken out of the presentation is as follows:

In addition to discussing and unifying the understanding about the different PSP models. Let’s all speak the same language.”

 

Eyüp Vural Aydın, Ph.D


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