Saudi Arabia has announced it will be privatising its airports to allow foreign companies to invest in them without the need for a local partner. Furthermore, local investments in several airports will be capped at 25% to give foreign investors a majority holding in operating contracts, the country’s General Authority of Civil Aviation (GACA) said.
“All international companies and operators that are qualified can participate. There is no requirement for a local partner – that is up to the companies,” Faisal Al-Sugair, vice-chairman of GACA, told press during the announcement. As a first step, several airports are currently moving into a corporate structure before being privatised. Meanwhile, certain parts of airports are initially running as concessions – the new terminal five in Riyadh’s King Khalid will be run as a concession by Dublin Airport Authority, and the King Abdulaziz International Airport in Jeddah will soon be open to concessions bidding by international operators.
This move follows a series of decisions by the Saudi government to open up more sectors of its economy to foreign investment. The country recently announced plans to allow 100% foreign ownership in wholesale and retail businesses, currently a maximum of 75% foreign ownership is allowed, with a requirement for a local partner. While these laws have yet to be implemented, they are evidence of the country’s attempts to diversify its petroleum-based economy through the liberalisation of FDI regulations.
The government plans to privatise all its domestic and international airports by 2020, GACA said.