The new executive regulations of the privatization law went into effect on Friday following their publication in the National Gazette. The changes apply to companies earmarked for privatization in which the state holds a stake of 50% or more. You can find the full set of regulations here.
The two big changes: New valuation requirements and rules on direct awards.
Valuation requirements: Projects earmarked for privatization must have a minimum valuation of SAR 50 mn, while projects offered under a public-private partnership model must have a minimum valuation of SAR 200 mn, according to the regulations. The government entity taking the projects to market has the option to package similar projects together to meet the minimum valuation requirements.
Direct contracting: Projects can be awarded to the private sector through direct contracting only in the following cases:
- In emergency situations involving a confirmed and unexpected threat to public safety and security, or / and public health, with potential risks to life, property, or the disruption of public services where general or limited competition procedures would be inadequate;
- If the procurer can’t reach an agreement with any of the bidders, or if there is no bidders for the project, or if the bidders fall short of required qualifications;
- In cases where only one qualified company has the necessary technology or technical requirements;
- If the project requires the use of intellectual property rights, such as patents, owned by a single company.