2004 News Story
 

10/21/2004
Privatization plans for insurance, mining, desalination, and hotels

Minister of Finance Dr Ibrahim Al-Assaf, addressing the Consultative Council (Majlis Al-Shura) in Jeddah today, reported the progress the Kingdom has made towards privatization of the 20 major sectors designated two years ago by the Council of Ministers, a list including air and rail transport, telecommunications, agricultural services, and health facilities, as well as insurance, mining, desalination, and hotels. In May this year, the decision was made to partially privatize the National Company for Cooperative Insurance (NCCI) and the Saudi Arabian Mining Company, ‘Ma’aden’. Plans are now underway to privatize all the Kingdom’s desalination plants, and to sell five-star hotels owned by the government.


The Public Investment Fund’s shares in NCCI, valued at SR250 million [U.S. $ 66.8 million], will be sold, but the General Organization for Social Insurance (GOSI) and the Pension Fund are both expected to maintain their 25 percent stake in the company. NCCI, the Kingdom's only official insurance company, has five million shares, each with a nominal value of SR100.

Ma’aden, which is fully owned by the government, is expected to sell 40 to 50 percent of its stake in the precious metals sector in which the company has invested SR600 million [$160.2 million]. Ma’aden was established in 1997 with a capital of SR4billion [$1.07 billion] for the purpose of exploiting the Kingdom's rich mineral resources.

Efforts are under way to privatize the Kingdom's desalination plants, established at a total cost of SR54 billion [$14.4 billion]. Once the feasibility studies are completed, all the desalination plants will be presented to the private sector, which will also deal with any future projects.

Meanwhile, in an article published today in the Arabic daily Al-Eqtisadiah, Dr Al-Assaf reported the progress Saudi Arabia has made in its efforts to privatize the country’s state-owned five-star hotels. Their assets, he said, have been determined, and ideas on the privatization process will be presented to the Supreme Economic Council. In due course, shares will be floated for investment.

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