Postal system privatization may begin early next year

Arabnews 11 June 2016

JEDDAH: The Ministry of Telecommunication and IT would provide 120,000 job opportunities under the NTP 2020.

It was revealed by Minister Mohammed Al-Suwaiyel on Thursday.
He was addressing a joint press conference with Commerce and Industry Minister Majid Al-Qassabi and Municipal and Rural Affairs Minister Abdul Lateef Al-Asheikh.
It was the fourth consecutive press conference conducted by senior government officials of the government to talk about the NTP 2020 program since its launch.
He also said that the Kingdom is likely to start privatizing its postal system by early next year, in a test case for a series of state asset sales.
Saudi Postal Corp, with over 10,000 staff, will be one of the first to be offered to investors. Al-Suwaiyel said that in preparation, the government was looking at a plan to create a postal holding company which would own subsidiaries operating services such as mail, courier delivery, e-commerce and financial remittances.
Authorities are studying issues such as how much of Saudi Postal would be sold and whether the stake would be offered to the public in an initial public offer of shares or to local or foreign strategic investors, he said.

“I cannot set a time frame but I expect by the start of 2017 the picture will be clear and execution starts.”

The government hopes privatization will allow the state to cease financial support for Saudi Postal — annual government subsidies to it are projected to fall to zero by 2020 from SR2 billion ($533 million) now — while boosting its performance, so that its revenues rise to SR2.75 billion in 2020 from SR1.02 billion in the latest year.

“Currently Saudi Postal depends on subsidies from the state. Privatization will empower it.”

He said the main challenges in the sector include the development of infrastructure.
“The human capital in this sector has to be increased from 20 to 25 percent to foster the inclusion of more locals,” the minister said, insisting that college graduates should be trained to choose the right vocations in the telecommunications sector. He also said that the private sector should give the opportunity for university graduates to become trained in the field.
Al-Suwaiyel pointed out that the Kingdom is marching toward a digital world and more than 63 percent of the government sectors are implementing the e-Government services program, which is convenient and quick in delivering products and services to the people.
He said the ministry’s current focus is now on its five recent initiatives, which include the launch of stimulating broadband to cover the whole country, on-the-job training program for college graduates and the development of IT industry information to cover the main areas of information technology to embrace small and medium-sized businesses.

Minister Al-Qassabi said that his ministry has embarked on 34 initiatives to protect consumer rights, look after traders’ interests and maintain an investor friendly climate in the Kingdom.
He said that the projects are coordinated through affiliated bodies such as the Saudi Arabian General Investment Authority (SAGIA), the Saudi Standards, Quality and Metrology Organization (SASO), the Saudi Organization for Certified Public Accountants (SOCPA), the Small and Medium Enterprises Authority and others serving the commercial system and investment initiatives.
He pointed out that the Kingdom has several key resources, most notably it’s geographical location and it’s human capital wealth. “The Kingdom of Saudi Arabia is an important part of the world, and it needs to compete with other countries. The Kingdom must leave a clear footprint as a leading and pioneering investment opportunity,” he said, disclosing that the number of workers in small and medium enterprises in the Kingdom is about 1,740,000.
Al-Qassabi stressed the importance of updating regulations and laws, pointing that there are 24 new systems and regulations. The minister also confirmed the importance of the e-commerce system for fuelling the Kingdom’s competition globally, pointing out that such systems can measure performance and enhance the contribution of small enterprises in the national economy.
Minister Al-Sheikh said the increasing population in the Kingdom force the ministry to chalk out programs to cater for the growing needs of the citizens as well as of residents.
“In view of the 2030 program, the ministry wants to achieve sustainable urban development and balance it in all cities and regions of the Kingdom, making the citizens and residents, visitors, and foreign investors to the Kingdom able to enjoy a decent life that could create the right climate for investment,” he said.
Because of the rapid economic development, he said that there are dramatic developments in all cities throughout the Kingdom. He disclosed that the Saudi cities are expanding rapidly, with the number reaching 285 cities, which translates into 285 principalities and municipalities. He stressed that the ministry’s biggest goal is to raise the level of city planning in the Kingdom and level of maintenance, public facilities and infrastructure.
The minister also emphasized the importance of raising the level of integrity in the municipal sector and fighting against corruption and violations – whether financial or administrative violations – as well as raising the level of employees in the municipal sector and expanding privatization as much as possible to transform the ministries and municipalities into organizing, planning and monitoring bodies.
Al-Sheikh added that the ministry also seeks to raise financial the self-sufficiency of the municipal sector which today supplies 10 percent of the financial needs of the Kingdom, whereas 90 percent is provided by the national government to meet the requirements of this sector.
Overall, he highlighted the ministry’s interest in establishing a healthy and safe environment in the cities of the Kingdom, as well as enhancing the role of health monitoring.


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