Saturday, Apr 10, 2010
RIYADH (Zawya Dow Jones)--Investors are questioning the viability of the 6 billion Saudi riyals ($1.6 billion) privatization scheme for a new airport in Madinah, Islam's second holiest city, raising concerns over their ability to collect fees from the government-owned carrier which has racked up billions in bills, the Abha-based daily Alwatan reports Saturday.
The General Authority for Civil Aviation, or GACA, which regulates the industry and owns the kingdom's airports, was on a roadshow in Dubai recently to test investor interests. The paper said, citing anonymous sources, that firms like HSBC, the Australian bank Macquarie Capital, and the local contractors Saudi Oger and Saudi Binladin Group attended the meetings in Dubai last week and all were concerned about the Saudi Arabian Airlines' outstanding bills. The government-owned carrier, owes SAR11 billion to GACA, the paper reports. The airline is the main operator in Madinah.
The report said the unpaid bills and the money the kingdom spends on its airline in the form of an allocation of SAR19.6 billion in the 2010 budget and large discounts for fuel has weakened the sector and hurt the upstart private carriers.
Both Saudi Arabian Airlines and GACA have decided to privatize their assets in the coming years, the report adds.
Newspaper web site: www.alwatan.com.sa
-By Riyadh Bureau, Dow Jones Newswires; +966 55 622 1334; mohammed.sergie@dowjones.com
Copyright (c) 2010 Dow Jones & Co.
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10-04-10 0931GMT
