Driven by Vision 2030, a variety of Saudi government institutions are privatizing their businesses with the main objective of diversifying revenue streams apart from a dependency on oil. Privatization, in a step that would further strengthen the Kingdom for generations to come, will let the nation develop exponentially through income creation from fresh sources.

Creating a road map for the future of privatization

Privatization is no easy process; it necessitates a wide variety of tasks to be performed to guarantee that these companies' operations are lucrative, making them appealing to international investors and driving development.

As with any transaction, the business seeking to privatize and attract foreign investment first has to be an attractive proposition, allowing potential investors to do due diligence and feel sure that their investment is appropriately put.

Asset management is a critical component of this, and the following describes the different procedures that must be taken:

Establishing a clear linkage among your assets and your bottom line —each government agency seeking to privatize should have a clear and comprehensive understanding of the assets under its control, including their condition, cost of maintenance, and projected lifetime. Having a clear connection between the performance of your assets and the bottom line gives potential investors a clearer picture of the investment they are willing to make, with their confidence boosted by a transparent view of the risk related to the operations, maintenance, and long-term dependability of the assets in question.

Applying the most recent asset management concepts — while these businesses' assets have had operations and maintenance deals in place, it is doubtful that the most recent asset management principles have been applied. The risk factor is significant, as the running costs of assets may impede the entity's future profit production. The smaller the cost connected with asset maintenance and lifespan, as with any area of business, the less the firm needs to take from its revenue to pay it, thereby enhancing the profit margin. A business with poorly maintained assets and an erroneous assessment of its health, lifespan, and future operational costs is a dangerous and rare investment prospect.

Obtaining the required expertise —From an investor's standpoint, it is critical that government entities that wish to privatize seek the expertise of an asset management company to make sure that asset registration, asset condition, and potential operating costs are accurately recorded, monitored, maintained, and improved, and that a clear picture of potential operating expenses is obtainable. By continuing to invest in this process early, entities seeking privatization can establish both short and long-term significance in their organizations. In addition to dealing with threats for investors related to the purchase of assets with unidentified circumstances and potential lifespan, this procedure would help clients add value to smart city strategies, decrease their carbon footprint, and understanding a variety of opportunities to minimize energy consumption. The faster this is done, the better because the historical perspective offered by periodic audit will decrease the risk associated with the investment; measurable and verifiable data concerning asset status will instill confidence that the predicted lifetime and operations expenses are appropriate.

Compliance to international standards – in addition to the production of auditable asset data, adherence to international standards and compliance will offer government organizations an additional feather in their cap while seeking foreign investment to assist privatization efforts. By integrating asset management policies, processes, and operations with recognized international standards, government organizations may more readily communicate to investors their dedication to quality and compliance, even while lending credibility to the information that they have acquired. Foreign investors may readily identify attribution to the most recent advances in asset management and financial business practices, giving them far more confidence that their due diligence before investing will yield an even lower level of risk.

Supporting in the privatization movement

· Foreign investment is important to the Kingdom of Saudi Arabia's privatization efforts. As a result, diversifying revenue streams inside the Kingdom will reduce the Kingdom's dependency on oil, which will eventually become a considerably smaller source of revenue than it is currently.

· Making sure that assets are properly classified and maintained in a way that increases their worthwhile decreasing operating expenses is critical in boosting the value of a firm pursuing privatization. Early implementation of the most recent asset management concepts will speed the privatization process, instilling trust in international investors and efficiently accomplishing the Saudi government's privatization goals.

· Serco is well-positioned to assist these goals, allowing government institutions pursuing privatization to enhance their value and income potential when entering the private sector. Serco's experience in asset management and asset lifecycle management may be found all over the world and in the area.

· Serco was appointed in 2019 to provide management consultancy services in partnership with the Mashroat program in the Kingdom of Saudi Arabia. Serco is contracted to produce various stages of the Kingdom-wide asset and facility management transformation program and to develop a new asset and facility management national standard.

· Serco's end-to-end asset management service solution encompasses all stages of the asset management journey, from asset condition survey, tagging, and verification through operations and maintenance. The ability to help businesses throughout their journey, rather than just at the beginning, guarantees that maintenance lifecycles are built on truth, are deliverable, and cost-efficient.