Article 11 of the Saudi Privatization Law
المادة 11 من نظام التخصيص
Where a license or permit needed for a privatization project cannot be issued or is delayed by the competent government entity, the Council of Economic and Development Affairs issues its direction to it on the basis of a report prepared by the executing entity.
Official text (Arabic)
This article has not been amended since the law was issued.
دون الإخلال بأحكام العقد المتعلقة بتوزيع المخاطر بين أطراف العقد، عند تعذر إصدار رخصة، أو ترخيص، أو تصريح لازم لأي مشروع تخصيص، أو تأخر إصداره من قبل الجهة الحكومية المعنية نظامًا بإصداره، يُصدر المجلس توجيهه لها بما يراه مناسبًا، بناءً على تقرير تُعده الجهة التنفيذية بالتنسيق مع الجهة الحكومية المعنية؛ متضمنًا وصفًا للحالة، وأسباب التعذر أو التأخر في الإصدار، والتكاليف الناجمة عن ذلك والحلول المقترحة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 11 explained in plain English
One of the things that most holds up projects is the delay of licenses and permits from other government entities. This article sets a solution:
- The case: it is not possible to issue, or issuance is delayed of, a license, authorization or permit needed for a privatization project by the government entity statutorily responsible.
- The report: the executing entity, in coordination with the government entity concerned, prepares a report including: a description of the situation, the reasons for the inability or delay, the resulting costs, and the proposed solutions.
- The decision: the Council of Economic and Development Affairs issues its direction to the entity concerned as it considers appropriate.
The article begins with the phrase "without prejudice to the contract's provisions on the allocation of risks". This means the Council's intervention does not change what the parties agreed in the contract about who bears the risks of license delays. If the contract places these risks on a particular party, that remains in place.
Under the text, the private party does not refer the matter to the Council directly; the executing entity prepares the report. It would therefore help the private party to document the delay and its costs and submit them to the executing entity, and to consult a lawyer who specializes in administrative or commercial matters to assess its rights under the contract.
Practical example
A company is carrying out a partnership project to build a water treatment plant in Qassim, and an environmental permit it needs from the competent entity has been delayed. The executing entity prepares a report in coordination with that entity setting out the reasons, costs and solutions, and then the Council issues its direction as it sees fit.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 11 of the Saudi Privatization Law
What happens if a license needed for a privatization project is delayed?
The Council of Economic and Development Affairs issues its direction to the entity concerned on the basis of a report prepared by the executing entity.
What does the delayed-license report contain?
A description of the situation, the reasons for the inability or delay, the resulting costs, and the proposed solutions.
Does the Council's intervention change the allocation of risks in the contract?
No. The article applies without prejudice to the contract's provisions on the allocation of risks.
More articles on Authorities Responsible for Privatization Projects
- Article 2
The article leaves it to the regulatory rules issued by the Council of Ministers to identify the competent authority for approvals, the executing entity that studies, offers and awards projects and concludes contracts, and the related entities.
1- تحدد القواعد المنظمة -بحسب مشروع التخصيص- الجهة (الجهات) التي لها صلاحية إصدار الموافقات اللازمة لمشاريع التخصيص بما في ذلك الموافقة على طرح المشاريع، وترسيت
- Article 6
The executing entity must carry out a comprehensive analysis and study when requesting approval from the Ministry or the competent authority, and the competent authority issues its approval only after the Ministry of Finance approves.
1- يتعيّن على الجهة التنفيذية عند طلب موافقة الوزارة أو الجهة المختصة على أي من المهمات الموكولة إليها بموجب أحكام النظام؛ إجراء تحليل ودراسة شاملة لموضوع الطلب
- Article 7
A government infrastructure or public service project whose estimated value exceeds a limit set by the Council of Ministers, or whose contract lasts five years or more, is referred to the Center for a preliminary study within 60 working days.
1- في حال صدور موافقة من الجهة المعنية نظامًا على مشروع بنية تحتيّة أو خدمة عامة لجهة حكومية، وكانت القيمة المقدرة للمشروع تتجاوز الحد الذي يُعيّنه مجلس الوزراء
- Article 44
The Board of Directors of the National Center for Privatization issues the Implementing Regulations, tender templates and documents, contract templates, and templates of mandatory and guidance contract clauses for privatization projects.
يصدر مجلس إدارة المركز ما يأتي: 1- اللائحة التنفيذية. 2- نماذج المنافسة، ونماذج وثائق المنافسة، ونماذج العقود المتعلقة بمشاريع التخصيص. 3- نماذج البنود التعاقدي
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.