Privatization projects, particularly greenfield projects which will require new construction, have the potential for significant social and environmental impacts. Social impacts are the impacts of developmental interventions on the human environment. Environmental impact refers to the effects of a project on the physical environment.
Social and environmental impacts can occur during either the construction or operational phases of a Privatization project, or both. To maintain the quality of life in the Kingdom, these impacts need to be identified and assessed to determine the:
a) nature of the potential impacts, positive or negative.
b) extent of the potential impacts.
c) mitigation measures, if any, which may need to be considered, and their costs and likely effectiveness.
d) nature and extent of any negative impacts which may not be mitigated.
While significant benefits may result from Privatization projects, and are the reason that such projects are pursued, there is also a need to identify and evaluate the negative externalities associated with these projects. Such impacts not only need to be identified and measured but, as with any developmental action, also need to be managed in such a way that the positive externalities of Privatization projects are maximized, and the negative externalities are minimized.
The Privatization Project Preparation process therefore needs to takes into account the social and environmental impacts of the potential projects. The conduct of Social Impact Assessments (SIA) and Environmental Impact Assessments (EIA), and Social Impact Assessment (SIA) are therefore key steps in the Privatization project planning and decision-making process. These impact assessments help in identifying the likely positive and negative impacts of proposed policy actions, likely trade-offs and synergies, and thus facilitate informed decision-making. Moreover, the need for impact assessment stems from the fact that:
a) Impact assessments enhance positive and sustainable outcomes associated with project implementation;
b) They support the integration of social and environmental aspects associated with the numerous subprojects into the decision-making process;
c) They enhance positive social and environmental outcomes;
d) They minimize social and environmental impacts as a result of either individual subprojects or their cumulative effects;
e) They protect human health and minimize impacts on cultural property.
The following paragraphs provide guidance on how to conduct of these assessments for potential Privatization projects.