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Saudi airports to be privatised

Saudi Arabia's 27 airports and related services will be privatised in 2016, as the government attempt to cut costs, Arabian Business has reported24 Nov 2015

"The privatisation programme comes in line with the kingdom's plan to improve the productive efficiency of airport systems and ease the financial burden on (the) state budget," Sulaiman AlHamdan, chairman of the General Authority for Civil Aviation, said in a statement, Arabian Business said.

King Khaled International Airport in Saudi Arabia's capital, Riyadh, is the country's main airport and will be first to be privatised.  The airport itself will be privatised in the first quarter of 2016, followed by its air traffic control and IT units in the second and third quarters, Arabian Business said.

A schedule for the privatisation of three other international and 23 regional airports has been put together up to 2020, the report said.

The Saudi Arabian government is also believed to be considering significant cuts to its capital spending plans for 2016, as it reacts to the impact of low oil prices.

Saudi Arabia is likely to post a budget deficit of almost 20% of gross domestic product this year, according to the International Monetary Fund (IMF).

The fiscal and current account balances in the Gulf Cooperation Council region are "deteriorating sharply, with the fiscal balance projected by the IMF to be in a deficit of 12.7% of GDP in 2015," IMF managing director Christine Lagarde said recently.

GCC countries "face the challenge of lower oil prices from a position of strength", Lagarde said.

"Prudent policies over the past decade have enabled them to build up financial buffers which avoid the need for a sudden or disruptive adjustment in fiscal policy. Nevertheless, with low oil prices expected to persist for a number of years, all GCC countries need to undertake some degree of fiscal adjustment, although the size and urgency of this adjustment varies across countries," she said.