Pre‐requisites for infrastructure public‐private partnerships in oil‐exporting countries: The case of Saudi Arabia

Abstract

AbstractThe evolution of public‐private partnerships (PPPs) within oil‐exporting states has not attracted sufficient attention from PPP scholars. Particularly, the Gulf‐Cooperation Council (GCC) states such as Saudi Arabia which has had a prolonged history of state‐led economic development and public funding of infrastructure projects is an interesting empirical context to explore how PPPs can become an instrument for infrastructure delivery. Plummeting oil prices since 2014 have urged Saudi Arabia to identify new forms of project organizing such as PPPs. The underlying argument of this paper is that delivering projects through the PPP route necessitates major reforms to the existing legal and regulatory frameworks, establishing relevant institutional support in the form of a PPP unit and developing a friendly business environment that could attract foreign investors to the country. This field report outlines the key reforms enacted by the Saudi government, and highlights pressing challenges that need to be addressed to drastically enhance Saudi Arabia's investment climate and enable the private sector's financing of mega‐infrastructure projects.