(Adds value of projects, legal advisor, partnership models)
By Katie Paul
RIYADH Jan 10 Saudi Arabia has hired HSBC
as financial advisor for its plans to privatise
construction and management of school buildings, as it seeks to
cut state spending in an era of low oil prices, a Saudi
executive told Reuters on Tuesday.
Tatweer Buildings Co, a state-owned firm affiliated with the
Ministry of Education, aims to begin offering public-private
partnerships for educational buildings this year, said Fahad
al-Hammad, the company's chief executive.
The projects will be worth more than 45 billion riyals ($12
billion), he added. International law firm King & Spalding will
be legal advisor.
"We aim to boost private sector participation in providing
educational buildings, which is a model implemented worldwide,"
Hammad said on the sidelines of an investment conference at the
"This will minimise government burdens, as the private
sector will take over building, maintenance and operation."
Tatweer will propose five models for the partnerships,
including 20- to 30-year build-maintain-transfer arrangements
for public school construction, and 15- to 20-year
lease-leaseback contracts for buildings.
It will also make unused public education buildings
available for private schools, transform urban facilities into
mixed-use spaces, and provide incentives for private school
development in planned communities.
In economic reform plans announced last year, Saudi Arabia
said it would seek ways for investors to deliver services
currently provided by the government, listing education and
health care as sectors ripe for investment.
The plan budgeted 11 million riyals to encourage the private
sector to invest in public education and 240 million riyals to
attract private investment to finance school construction.
Authorities also said they hoped to increase the percentage
of students in non-government higher education to 15 percent
from 6 percent by 2020, a major cost-cutting initiative in a
country where public education is provided free of cost.
(Editing by Andrew Torchia)