The first Law Update of 2024 is here, and our first focus of the year spotlights Healthcare and Lifesciences, a sector that is undergoing significant growth and development across the MENA region.
Our focus provides an insight into some of the most important regulatory updates across the region, such as the UAE’s groundbreaking law on the use of human genome, Kuwait’s resolution on nuclear and radioactive materials, the new regulations for healthcare services in Qatar, Egypt’s healthcare regulatory framework, and the impact of the Saudi Civil Transactions Law on the healthcare and life sciences sector … and there is so much more!
Beyond the healthcare pages our lawyers share with you multi-sector insights where you will discover articles on Dubai’s DIFC regulatory framework for startups, Bahrain’s commercial agencies law, and we also shed light on Kuwaiti civil code and the advantages of setting up a joint stock company in Saudi Arabia.Read the full edition
The Saudi Ministry of Health (“MOH“) published the Expression of Interest (“EOI“) for three Public Private Partnership (“PPP“) projects in each of Riyadh (Central Region) and Dammam (Eastern Region). The final date to submit the EOIs is on 13 April 2023, by 3:00 PM KSA time.
These projects will be the first across the Second Health Cluster (Riyadh), in the Central Region, and in the First Health Cluster (Dammam), in the Eastern Region. The projects aim to contribute to a key objective of Vision 2030, by increasing private sector participation in the healthcare sector. The Vision 2030 strategic objectives include a number that are dedicated to healthcare, including targeting the privatisation of 290 hospitals and 2,300 primary health centres by 2030 and other Private Sector Participation arrangements opportunities.
Saudi’s estimated population of approximately 36 million makes it the largest country in the Gulf Cooperation Council (“GCC“). Consequently, KSA is the largest spender on healthcare across the MENA region; it accounts for 60 per cent of the GCC countries’ healthcare expenditure. The 2022 budget allocated more than USD 36.8 Bn for Health and Social Development, 14.4% of Saudi Arabia’s budget expenditure, making the sector the Kingdom’s third largest recipient of government funding.
Saudi has a growing elderly population (3.4% are 65 yrs + in 2019, with a forecast of 17% in 2050). With a growing and ageing Saudi population and increased life expectancy of both females and males, there is an increased need for post-acute rehabilitation by 2030, for example. Such needs are related to increasing lifestyle disease and secondary disease, leading to strokes and heart attacks. Further, 7% of the total Saudi population is classified as disabled and it is expected to grow by 1.3% p.a. between 2020-30, which will also drive the need for post-acute rehabilitation facilities.
The MOH identified a demand-supply gap in the extended care services across KSA. In order to address this gap and to further the privatization agenda under the Vision 2030, MOH has decided to procure a variety of extended healthcare services under a Public Private Partnership (“PPP”) model by deploying three projects across each of Riyadh (cluster R2) in the central region of KSA and Dammam (cluster E1) in the eastern region of KSA (“Projects”).
The projects are as follows:
Interested parties with a track-record of extensive and relevant experience in designing, building, operating, financing, implementing and maintaining healthcare facilities and services or projects similar to the Project(s) are invited to submit an EOI. While interested participants may wish to form a consortium to bid for a Project, at this stage of the process, interested companies and firms should respond individually to the EOI and demonstrate their individual expertise across the key areas; however, they can indicate their likely consortium partners. At the Request for Qualification stage, parties will be expected to provide full details of the consortium partners (if applicable). MOH is expected to publish the list of the respondents to this EOI, in order to facilitate the formation of consortia among the interested parties. Interested private parties can opt to express their interest in one or more of the projects, in either of the two locations (Riyadh and Dammam).
In very recent years, we have also seen a shift towards PPPs. An array of regulatory and legal reforms have been made in recent years to accommodate more foreign investment and PPPs. Of particular highlight is the Private Health Institutions Law, which in 2019 newly permitted foreign investors to own, operate, and manage hospitals and health centres in the Kingdom through PPPs and build-operate-transfer models, for example. While private sector contribution to publicly funded projects is not new within Saudi, it had traditionally been largely restricted to certain sectors, and not permitted in healthcare.
Additionally, in March 2021 the National Center for Privatization & PPP (“NCP”) issued the regulatory base for private sector participation and PPPs in KSA – the Private Sector Participation Law and its implementing regulations (“PSP Law”). The PSP Law aims to increase private sector participation in infrastructure projects and in the provision of public services to citizens and residents, through PPPs and the privatization of public sector assets. All contractual relationships between the public and private sector that relate to infrastructure or the delivery of public services are covered by the PSP Law, if certain parameters are met.
PPP’s are one of the main pillars for driving reform in the Kingdom. The MOH has issued a number of opportunities through its PPP program, charged with increasing private sector involvement in eight strategic areas: primary care; hospital commissioning; the construction of medical cities; rehabilitation; radiology; long-term care; home care; and laboratories.
As the region’s largest law firm and having the largest dedicated Healthcare & Life Sciences practice group, we can assist with a wide variety of projects in KSA. Please let us know should you require more information about these or other opportunities in the Kingdom.
For more information, please contact our Healthcare & Life Sciences sector group, which operates across the region, including in our three Saudi Arabia offices, advising a wide range of healthcare and life sciences clients on entering or operating in the Kingdom.