The Kingdom has tasked the Council of Economic and Development Affairs (CEDA) with approving acquisition of shares in the capital of the Privatization Project Company following the government’s recent approval of the rules regulating privatization.
In order to apply provisions and help determine the competent authority according to the value of the public-private partnership project, the value of the project is calculated based on the value of the direct annual financial obligations incurred by the government based on the contract.
More so, a new Private Sector Participation Law (PSL) that came into force in July has granted a private sector entity powers to collect fees and taxes from service users and credit them directly to its own account. This is in return for the services it provides in accordance with the partnership contract signed between the public and private sectors, as determined by the Ministry of Finance.
As per PSL, which was approved by the Council of Ministers in March and came into force on July 24 this year, it covers a relationship between the public and private sectors, arising out of a contractual arrangement that relates to infrastructure or the delivery of public services.
The PSL enables the private sector entity to be granted the right to collect fees from service users directly; collect public revenue, including fees and taxes due to the state treasury; and collect public revenues directly. All this will be in accordance with the terms of the public and private partnership (PPP) contract. The private sector entity will not be entitled to impose additional charges on service users, unless expressly permitted by the PPP contract.
