Thirteen ministries and government agencies have announced the launch of programs to privatize certain services by outsourcing them to the private sector or establishing affiliated companies to operate according to private-sector principles, Employees in these entities will be handled according to specific arrangements, including retirement, transfer to another government agency, or transfer to various companies and institutions.

Several ministries and agencies have already announced the programs covered by the privatization initiative. Among the most prominent of these entities are: the Ministry of Justice, Health, Housing, Education, Municipal and Rural Affairs, Communications and Information Technology, Education, Agriculture, Environment, and Water, Transportation, Energy, Culture and Media, and the Tourism Authority.
The following are the most notable projects that the ministries and agencies intend to privatize:
Ministry of Justice
Involving the private sector in notary services.

Involving the private sector in support services for the enforcement judiciary.

Establishing centers for the enforcement of custody, visitation, and access orders in cooperation with the third sector.
Ministry of Health
Public-private partnerships.

Privatization of one of the medical cities.

Localization of the pharmaceutical industry.

Privatization of some hospitals.

Procurement of health services. Privatization of dialysis and home care.
Ministry of Communications and Information Technology

Full privatization of Saudi Post.

Establishment of an independent body responsible for developing the information technology industry in the Kingdom
and formulating and implementing the vision.
Ministry of Municipal and Rural Affairs
Privatization of several services, most notably sanitation and waste recycling.

Study the privatization of public oversight.

Issuing various permits.
Ministry of Culture and Information

Al-Ikhbariya Company

Ministry of Agriculture and Environment

Establishment of a company to develop and manage markets for agricultural products (vegetables, fruits, livestock
and fish). Establishment and development of fishing ports in coastal areas to serve fishermen and create tourist centers in partnership with the private sector.

Rehabilitation, development, investment, and sustainable management of national parks.

Increase the use of treated wastewater in the agricultural sector.

Center for the development and production of veterinary vaccines for local pathogens.

Establish marketing service centers for small farmers and producers.
Ministry of Education
Encouraging private sector participation in investment in private education, including kindergartens.
Develop a new model for operating public schools known as «independent schools.»
Convert 2,000 public schools to be operated by small-scale economic entities.

Ministry of Labor and Social Development
Outsource the inspection sector to the private sector.

Ministry of Housing
Convert the Real Estate Development Fund into a financial institution to fill the gap in the real estate finance sector.
The fund will become the executive arm of the Ministry of Housing.
Ministry of Energy
Build a production center for medium and light industries in Hawtat Bani Tamim to capitalize on the hydrocarbon and mineral resources available in the region that are not being fully utilized.
Construction of a production center for medium and light industries in Daba.

Utilization of the hydrocarbon and mineral resources available in the region that are not being optimally exploited.

Ministry of Transportation

General Authority for Ports

General Organization for Railways

General Authority for Tourism

Establishment of the Saudi Company for Crafts and Handicrafts.

Civil Aviation Authority

Various projects and services in accordance with the Authority’s plan.

These ministries and authorities have established a mechanism setting forth the rules and arrangements governing the treatment of Saudi employees and workers in the sectors targeted for privatization when these sectors are transferred to the “private sector,” as follows:
First: Secondment of Employees

If it becomes necessary to second any employees in a sector targeted for privatization, such secondment shall be in accordance with the following:

Employees in the sector targeted for privatization shall be seconded to the company that will take over that sector or its subsidiaries, in accordance with the privatization phases determined by the authority overseeing that sector.
The secondment shall be by decision of the Minister or the head of the authority overseeing that sector, provided that its duration does not exceed two years.

The company shall bear the salaries, wages, allowances, and contributions of the seconded employees, as well as any other costs incurred pursuant to the company’s decisions.

The company shall provide training and qualification to those seconded to it whom it deems important and necessary to train and qualify, such that the company shall determine the necessary training programs (whether theoretical or practical) and their duration, provided that the training period for each seconded employee does not exceed 18 months.
A joint committee shall be formed comprising representatives from the ministry or the authority overseeing that sector, the Ministry of Labor, and the company. This committee shall oversee the training and qualification programs, as well as performance evaluation tests.

Second: Absorption and Termination of Services

If the trainee does not wish to transfer to work at the company, or is unable to pass this test, he or she shall be absorbed into any of the Ministry’s work locations or those of the authority overseeing the sector targeted for privatization, or shall be permitted to transfer his or her employment to any other government entity; If he is unable to transfer his employment, his case will be referred to the competent committee for a decision, which may include termination of his employment and the settlement of his retirement benefits in accordance with regulations and instructions.

Third: Performance Evaluation

If an employee subject to the civil service system—who has passed the performance evaluation test or for whom the company has determined that taking this test is unnecessary—wishes to transfer to work at the company in accordance with the Labor Law and the Social Insurance Law, the following shall apply:
If the employee has less than twenty years of service, his employment shall be terminated, and he shall be treated—at his discretion—in one of the following two ways:
A – Settlement of his retirement benefits—upon his request—and his reappointment at the company, in accordance with the wages and benefits approved by the company’s board of directors, provided that they are not less than what he was receiving at the ministry or the authority overseeing the sector targeted for privatization.
B – Reappointment to the company in accordance with the wages and benefits approved by the company’s board of directors, provided that they are not less than what he was receiving at the ministry or the authority overseeing the sector targeted for privatization, and, at his request, to have his service under the Civil Pension System combined with his new service under the Social Insurance System, in accordance with the system for the exchange of benefits between the Civil and Military Pension Systems and the Social Insurance System.

Retirement and Termination of Service
Any employee whose service credited toward retirement totals 20 years or more shall have his service terminated and shall be treated—according to his preference—under one of the following alternatives:
A. Early retirement—upon his request—and reappointment to the company, in accordance with the wages and benefits approved by the company’s board of directors, provided that they are not less than what he was receiving at the ministry or the authority overseeing the sector targeted for privatization.
b – Reappointment to the company, in accordance with the wages and benefits approved by the company’s board of directors, provided that they are not less than what he was receiving at the ministry or the authority overseeing the sector targeted for privatization, and the consolidation of his service —at his request—in the Civil Pension System to his new service under the Social Insurance System, in accordance with the system for the exchange of benefits between the Civil and Military Pension Systems and the Social Insurance System.
Social Insurance System
Fourth: If an employee subject to the Labor Law and the Social Insurance System, or an employee hired on a wage basis—who has passed a performance evaluation or whom the company deems does not need to undergo such an evaluation—wishes to transfer to work at the company, he shall be treated as follows:
The company is obligated to enter into an employment contract with him in accordance with the Labor Law, based on the wages and benefits approved by the company’s board of directors, provided that they are not less than what he was receiving at the ministry or the authority overseeing the sector targeted for privatization.
His social insurance coverage shall be considered continuous.

His service shall be considered continuous with regard to end-of-service benefits and leave entitlements.

The Ministry or the authority overseeing the sector targeted for privatization and the company shall bear the resulting financial costs.