The establishment of the National Center for Privatization and PPP (NCP) earlier this year and its empowerment to formulate regulations, create privatization frameworks and liaise with the government entities in addition to highlighting sectors and organizations and promoting those opportunities internationally will enhance the exiting environment and boost the quality of the processes to cover procurement, financing and development of PPP projects in Saudi Arabia.
Our key recommendations for engaging in PPP projects in the Kingdom of Saudi Arabia (outside the requirements to secure funding ) are:
1. Conduct an initial due diligence of the applicable legal framework in light of the activities to be performed and the particulars of the project to confirm that the that are no regulatory restriction at formation or during operations that will impede the success of the project.
2. Conduct a brief overview of the Procurement Law and become familiar with its expectations and its requirement to avoid any challenge on the same.
3. Draft a contract that is well-written and comprehensive but most importantly consistent with the Kingdom›s laws and regulations to avoid any enforceability issues.
4. Where a company is established as a special purposes vehicle for the PPP, implement supplementary measures in the company's constitutional documentation that will assist in providing the flexibility to exercise the required management and operations.