Article 13 of the Saudi Privatization Law
المادة 13 من نظام التخصيص
The executing entity may cancel the offering of a privatization project at any time before signing the contract, with the competent authority's approval, in the public interest. Competitors are not entitled to compensation unless the Center's board of directors decides otherwise.
Official text (Arabic)
This article has not been amended since the law was issued.
للجهة التنفيذية في أي وقت قبل توقيع العقد إلغاء طرح مشروع التخصيص، بعد موافقة الجهة المختصة متى رأت في ذلك تحقيقًا للمصلحة العامة. وفي هذه الحالة؛ لا يستحق أي من المتنافسين أي تعويض ما لم يقرر مجلس إدارة المركز غير ذلك بناءً على توصية من الجهة التنفيذية.
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 13 explained in plain English
This article deals with a situation investors fear: cancellation of the offering after they have put effort and costs into preparing their bids.
Conditions for cancellation:
- Timing: at any time before the contract is signed. After signing, this article does not apply.
- Approval: after the competent authority's approval.
- The reason: whenever the executing entity considers that doing so serves the public interest.
Compensation: the rule is that no competitor is entitled to any compensation. The exception is where the Center's board of directors decides otherwise, on the recommendation of the executing entity.
The practical effect is that the costs of preparing bids and feasibility studies are in principle borne by the competitor if the offering is canceled. An investor would do well to take this possibility into account when estimating the cost of participating.
The text ties compensation to a decision of the Center's board of directors, not to the competitor's request, so the competitor has no automatic right to it. It is preceded by Article 12 on offering methods, and followed by Article 14 on the project company. A person who considers that the cancellation did not meet its conditions should consult a lawyer who specializes in administrative matters.
Practical example
Three companies submitted bids for a project to operate public parking in Riyadh, and each spent money on studies for its bid. Before the contract was signed, the executing entity decided to cancel the offering with the competent authority's approval in the public interest, so the companies are not entitled to compensation unless the Center's board of directors decides so.
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 13 of the Saudi Privatization Law
Can the offering of a privatization project be canceled?
Yes. The executing entity may cancel it at any time before the contract is signed, with the competent authority's approval, whenever it considers this serves the public interest.
Are competitors compensated if the offering is canceled?
They are not entitled to any compensation unless the Center's board of directors decides otherwise, on the recommendation of the executing entity.
More articles on Tendering and Awarding Privatization Projects
- Article 5
The article leaves it to the Implementing Regulations to specify the privatization methods available for public-private partnerships or asset ownership transfers, and the conditions and controls for each method.
تحدد اللائحة التنفيذية أساليب التخصيص الممكن اتباعها والمتعلقة بالشراكة بين القطاعين العام والخاص، أو بنقل ملكية الأصول، والشروط والضوابط اللازمة لكل أسلوب من ه
- Article 12
Privatization projects are generally offered through public competition, and may be offered through limited competition, direct contracting or other means suited to the project; the regulations set the rules for each means.
1- يتم طرح مشروع التخصيص من خلال منافسة عامة، ويمكن طرحه عن طريق منافسة محدودة، أو بالتعاقد المباشر، أو غير ذلك من وسائل الطرح المناسبة بحسب طبيعة المشروع. 2- ي
- Article 32
The Center's Board sets the rules for tenders and procurement in privatization contracts and for State leasing and vacating of real estate in coordination with the State Properties Authority, and the general laws apply where there is no special provision.
1- يضع مجلس إدارة المركز الأحكام المنظمة للمنافسات والمشتريات لجميع التعاقدات اللازمة لتنفيذ عمليات التخصيص. 2- يضع مجلس إدارة المركز -بالتنسيق مع الهيئة العامة
- Article 35
Arabic is the language of privatization tender documents and of concluding contracts and subsidiary contracts, and another language may be used after the competent authority's approval.
تكون اللغة العربية هي اللغة التي تصدر بها وثائق الطرح ويُبرم بها العقد -أو العقد التابع- ويجوز إصدار وثائق الطرح وإبرام العقد -أو العقد التابع- بلغة أخرى بعد مو
- Article 36
This article applies to foreign investors the same criteria and procedures as local ones in tendering and awarding privatization projects, and gives them the same treatment in everything arising from the Law or the contract.
دون الإخلال بأحكام الأنظمة، وبأي التزام للمملكة بموجب الاتفاقيات الدولية أو الإقليمية التي تكون المملكة طرفًا فيها، تُطبَّق على المستثمر الأجنبي المعايير والضوا
- Article 40
The Implementing Regulations set the rules for implementing the Privatization Law, including the project document, project priorities, selecting consultants, monitoring contracts, the effect of emergencies, and criteria for treating a project as privatization.
1- تحدد اللائحة التنفيذية الأحكام اللازمة لتنفيذ النظام بما في ذلك ما يأتي: أ- الأحكام المتعلقة بوثيقة مشروع التخصيص، وآلية التواصل بالقطاع الخاص. ب- الأسس اللا
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.