Saudi airport PPPs – government plans USD1 billion programme for two small airports, more to come

After several years somnambulating, the Saudi Arabian privatisation show is back on the road.

The show being originally intended to cover 200 projects across 17 sectors, airports have been included – mainly small ones, but a notable one being at Medina, the Kingdom's fourth busiest. However, there have been casualties along the way as well, for a variety of reasons, both air transport and politically related.

There is the impression that while the country's huge city and vacation resort projects are under way and attracting global attention, the Saudi government is treading cautiously in this domain, sounding out those investors who will commit to smaller airport projects now, with the bigger fish in mind for later.

Hence, just two of a projected four concessions will now be tendered this quarter. One for a revamp of an airport and the other a new-build greenfield one (Abha and Taif airports), but both with ambitious growth and passenger targets that the contractors will probably be held to – although recent changes in Saudi law will protect them from issues that have thwarted previous deals.

If they are successful, two others will likely follow.

Saudi Arabia, even at this low level of activity, is relatively a hotbed for airport privatisation in the region, and the rest of that region will be watching for encouraging signs of foreign interest and co-operation that might prompt their own belated action.