SAUDI ARABIAS PPP ECO SYSTEM IS DEVELOPING FAST

The year 2018 will pass very hectic in terms of PPPs

Last week I was invited by one of the biggest companies in the world for a presentation. I didn’t know what to expect before the seminar which should be held for the Managers of Aramco, therefore I fully prepared myself and returned back to Istanbul learning a lot in that program.

First of all I would like to highlight the fact that the PPP eco system in KSA is developing very fast. After the Public Authority, the private companies in KSA and the public companies will also be using the PPP model in an efficient way. We have to understand this clearly.

Above all, many ministries, many institutions, many private sector representatives are aware of the fact that PPPs are in a development process. We have to underline that they don’t want to drop back in this area which is fastly evolving. Instantly all institutions are planning a capacity building program. In order to develop the capacity building daily and weekly comprehensive and long-termed training programs are realized.

I would like to share some information from the Aramco presentation. Big companies which are active in a wide range of sub-sectors are expected or assigned to undertake many tasks in the matter of infrastructural investment. Aramco is at the moment in exact this situation.

They have a big energy city project on their desk, but important topics were left behind:

  • Land words
  • Site selection
  • Expropriation
  • Expected infrastructural investments list
  • Feasibilities

When a company attempts hight investments it has to turn around and ask itself the following questions:

  1. Can I develop this investment together with the private sector?
  2. When I succeed what will I gain?
  3. What might be the results impact on the upcoming investment plans?

First of all I would like to congratulate all managers who are part of this project. They asked the right questions at the right spots. Can PPP be an option? If yes, how and with what procedures? At the moment these are the questions that circulate in their minds.

We were the ones who triggered a brainstorming during the pre-presentation meeting with the top management in order to get answers to these questions. Important steps were taken. I hope that more works will be realized soon.

In addition to these, Aramco has an engineering and international view with an intellectual build-up. The main benefit of this build is that they can face the main problem of PPPs which is the public authorities view and the traditional approach and overcome them easily. This is the most pleasant part of this work.

They don’t approach the procedure in an interrogative, investigative, negative point of view but with a positive view, not only from one perspective but from many perspectives. I was thrilled by this approach, which is also a big advantage.

During the question which PPP model to choose for an energy project it was nice to observe that the Managers were thinking of how to combine their experience and know-how in designing the operational and infrastructural investment with the PPP model. This shows that an important milestone was crossed.

Many projects will be realized one after another in which many international project development companies, financial providers, private investors, facility management companies and PPP experts will be able to work together.

Every time I visit Saudi Arabia I am becoming more certain that no matter how much the petro/dollar prices rise the public authority is determined to develop a sinergy together with the private sector.

Doesn’t matter from which perspective we look:

  • Financial sources
  • Technology transfers
  • Management flexibility
  • Richness of point of views,

All of these points rise the level of awareness in an equal way. The year 2018 will pass in an hectic way for Saudi Arabia in the matter of PPPs.

I wish all the authorities the best.


Eyüp Vural Aydın, Ph.D