Council of Ministers Approves PSP Law

Riyadh, March 2021.the Private Sector Participation (PSP) Law was approved by the Council of the Ministers during its virtual session which took place yesterday. The PSP Law aims to increase private sector participation in infrastructure projects and in the provision of public services to citizens and residents, by supporting Public-Private-Partnerships (PPP) and the privatization of public sector assets.​

The CEO of the National Center for Privatization & PPP (NCP), Eng. Rayyan Nagadi, expressed his gratitude and appreciation to the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud and His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, the Crown Prince, the Deputy Prime Minster and the Minister of Defense, on the approval of the PSP Law by the Council of Ministers. Eng. Nagadi noted that the PSP Law aims at a leveled distribution of risk between government and private sector, reducing the government's capital budget, organizing, supervising and developing all procedures related to PPP and Privatization (PPP&P) projects. The PSP Law will also raise the level of transparency, fairness and integrity of procedures for tendering PPP&P contracts.   

Executive Vice President for Legal & Regulatory Affairs at NCP, Sultan Al Qahtani, stated that the drafting of the PSP Law benefited from considering international experience in PPP&P and best practices adopted elsewhere, as well as drawing on the experiences gained through the implementation of PPP&P projects in the Kingdom. In particular, the PSP Law will create a governance structure for PPP&P projects that contributes to the implementation of more efficient and effective projects in general, while focusing on high economic impact projects. Thus the PSP Law will support Government's Vision 2030 strategy, contributing to improving spending efficiency, economic diversification, sustainable development and increasing regional and international competitiveness.


The PSP Law includes a number of legislative enablers that will enhance investor confidence in the PPP&P process, strengthen the enforcement of PPP&P contracts and ensure that the State will meet financial obligations arising from PPP&P contracts. In addition, the PSP Law addresses a number of specific challenges that PPP&P projects face in the Kingdom. It provides a framework for the public sector to participate directly in a project company while protecting the rights of the private partners. On the social front, the Law will contribute to improving public services to citizens and residents and ensures that the social impacts of PPP&P projects are understood before proceeding with the implementation.

NCP is supporting 16 sectors targeted for privatization in developing and launching a pipeline of PPP&P opportunities and initiatives that will contribute to un-locking state-owned assets and privatize selected government services to the local and international private sector. The achievement of these objectives will be contributing factors to realizing the Kingdom's Vision 2030, improving the balance of payments and increasing private sector's contribution to GDP from 40% to 65%. It is worth noting that the National Development Fund is progressing the establishment of a new National Infrastructure Fund. This fund will accelerate delivery of KSA's critical infrastructure projects by facilitating increased levels of private sector participation. The fund's role will complement NCP's by providing financing support to crowd-in private sector capital.