Saudi authorities review SEC break up plan
The review, being conducted by consultants and advisors to the government, could result in the original plan being retained or a new restructuring scheme put in place
Saudi Arabia is reviewing its plan to break up Saudi Electricity Co ( SEC ) into four parts as part of a drive to further privatise the utility, according to sources aware of the matter.
The review, being conducted by consultants and advisors to the government, could result in the original plan being retained or a new restructuring scheme put in place, reported Reuters.
The move was instigated before Saturday's sweeping changes to the kingdom's government, including the Water and Electricity Ministry being broken up and power affairs placed within the new Energy, Industry and Mineral Resources Ministry headed by incoming energy minister Khalid al-Falih.
Saudi Electric did not immediately respond to a request for comment.
The review places doubt on a timetable to split the firm by the end of the year into four power generation companies, as announced in February by Abdullah al-Shehri, governor of the Electricity & Co-Generation Regulatory Authority.
At the time, he said the process would be open to competition and stakes in the new firms would be offered either to local citizens through offers on the stock market, or to local or international corporate partners.
Saudi Arabia has been considering reforms to SEC since at least 2009, but political pressure for such change has increased greatly since oil prices began to plunge in 2014, straining state finances.
The country's Vision 2030 plan, announced on April 25, unveiled a package of economic and social reforms aimed at ending the kingdom's "addiction" to oil and transforming it into a global investment power.
"There's a lot of changes which are happening in all areas of the economy so the government wants to bring in its advisors to look at the plans," said one of the sources of the move to review SEC's break-up.
The sources spoke on condition of anonymity as the information isn't public.