April 18, 2018 / 8:18 AM / a month ago

Saudi's Riyadh airport privatization plans on hold: sources

DUBAI/RIYADH (Reuters) - Saudi Arabia has put on hold privatization plans for King Khaled International Airport in Riyadh, the kingdom’s second biggest airport, sources familiar with the matter said.

FILE PHOTO: Saudis rest at Riyadh airport March 10, 2009. REUTERS/Fahad Shadeed/File Photo

The Gulf Arab state is launching a privatization drive as part of wider economic reforms aimed at boosting efficiency, easing pressure on state finances and diversifying the oil dependent economy.

In July, sources told Reuters that Goldman Sachs (GS.N) was hired by the government to manage Saudi Civil Aviation Holding Company’s (SAVC) plans to sell a minority stake in Riyadh airport.

“Right now they are looking at the plan again because it is starting to look more like a concession rather than privatization,” said one source familiar with the matter, who spoke on condition of anonymity because it is not yet public.

Another source familiar with the deal said the privatization is on hold, without elaborating. Neither source gave a timeline.

Goldman Sachs declined to comment on the issue when contacted by Reuters. A Saudi aviation authority spokesman was not immediately available for comment.

SAVC Chairman Faisal Hamad al-Sugair had said in December that the goal was for airports in the kingdom to be “corporatized”, or turned into private companies, in 2018 and that privatization would follow later.

Officials have highlighted transport as a priority sector for privatization, however the process has taken time to get underway. The kingdom had said in November 2015 it expected to begin privatizing airports in the first quarter of 2016.

The airport privatization plan is expected to move faster than those for more complex sectors such as healthcare and electricity, one of the sources said.

The Saudi government has said that it planned to raise about $200 billion through its privatization program in coming years, in addition to some $100 billion through the planned sale of a stake in national oil giant Saudi Aramco (IPO-ARMO.SE).

    Additional reporting by Saeed Azhar in Dubai and Stephen Kalin in Riyadh; Editing by Ghaida Ghantous and Louise Heavens

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