Private Sector Participation Law (PSP Law) of 2021.

This Law consisting of 45 articles regulates the environment in which PPP and privatization projects are undertaken in Saudi Arabia and covers any relationship between the public and private sector arising out of a contractual arrangement, which relates to infrastructure or the delivery of public services. The Government seeks, through PSP projects, to achieve the following objectives (i) support achieving the strategic objectives of Government entities, rationalize public expenditure, increase Government revenues, raise the efficiency of the national economy, and increase its competitiveness; (ii) enhance the coverage and the quality of services, and the availability of services at the appropriate time and cost; (iii) encourage local and foreign private sectors to invest and actively participate in the national economy, and increase the private sector’s share of the Gross Domestic Product (GDP) resulting in economic growth; (iv) increase the participation of citizens in the ownership of Government Assets, increasing employment opportunities, and the optimal utilization of the national workforce.
The Law provides the Saudi government with financial and regulatory support for privatization schemes, including land ownership rights, financial guarantees, tariff subsidies, tax benefits, custom duty preferences, foreign exchange, and interest rate protections, as well as help in obtaining the required permits and approvals. The Law deals also with (i) the protections for private investors (article 36) by establishing that foreign investors shall be entitled to the same treatment as national investors concerning any standards, conditions, and procedures, and the right to non‑interference by the government; (ii) expropriation of the private party’s property (art.38) if necessary for the execution of the PSP projects; (iii) the right to freedom of ownership; and the right to recover losses incurred as a result of any subsequent changes to the law (art.29). Penalties for non‑performance are also addressed.