January 17, 2018 / 10:53 AM / 8 months ago

UPDATE 1-Saudi government announces tender to build 60 schools, ease burden on state

(Adds details of tender, context)

By Andrew Torchia

DUBAI, Jan 17 (Reuters) - Saudi Arabia’s education ministry announced on Wednesday a tender for private companies to build and maintain 60 schools, as part of economic reforms designed to ease pressure on the state’s finances.

Tatweer Buildings Co (TBC), a state-owned corporation that manages projects, said the winning bidder would be awarded a long-term concession to design, build, finance and maintain facilities for 60 schools in Jeddah and Mecca, from kindergartens to secondary schools.

In the past, the government built such infrastructure solely out of its own funds. But low oil prices have severely strained its finances, prompting authorities to seek the participation of private investors.

The upcoming tender, the first in a series, is for a public-private partnership (PPP) in which a private firm or consortium would be paid to build and then operate facilities over a period, before they were eventually transferred to the state.

Potential bidders are requested to express interest by Feb. 7, TBC said, adding that it would soon hold a conference in Riyadh for property developers, investors and financial institutions, as well as legal and technical professionals.

Under reforms announced in 2016, Saudi Arabia plans to use PPPs to give responsibility for building and operating much of its infrastructure, including school and hospital buildings and airports, to local and foreign companies, creating tens of billions of dollars of business opportunities.

As one of the very first Saudi PPPs, the TBC project could help to determine this strategy’s success or failure in coming years, and the level of foreign investor interest.

Officials have said they will permit foreign investors to take 100 percent ownership of companies and facilities in the health and education sectors, with ministries becoming pure regulators rather than service providers. (Editing by Toby Chopra and Hugh Lawson)

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