The following terms and phrases - wherever they appear in these regulations - shall have the meanings specified next to each, unless the context requires otherwise:
The Kingdom: The Kingdom of Saudi Arabia.
The Regulations: The regulations governing income participation.
The Law: The Law on Competitions and Government Procurement.
The Regulations: The implementing regulation of the law, and the regulatory regulations issued under it.
The Ministry: The Ministry of Finance.
The Minister: The Minister of Finance.
The Government Agency: Any ministry, governmental body, authority, interest, public institution, or entity with independent public legal personality in the Kingdom.
The Head of the Government Agency: The Minister, President, Governor, or the highest official in the government agency.
The Portal: The unified electronic portal for government procurement in accordance with the law.
The Private Partner: A person with a private legal personality contracted to provide goods and services according to the income participation method in accordance with the regulations.
The Beneficiary: Any natural or legal person who pays a financial consideration in exchange for benefiting from the public services provided by the private partner under the contract.
The Income: The total amount of revenues generated from the provision of goods and services.
The Asset: Any asset, whether permanent or temporary, fixed or movable, tangible or intangible, including rights.
The Moral Right: An exclusive (non-material) right that can be granted to others, such as intellectual property rights, or similar rights.
Income Participation: A type of contract - under the provisions of the law and regulations - between a government agency and a private partner to provide goods and services for the benefit of the beneficiaries, based on the division and distribution of income between the parties to the contract, whereby the private partner assumes risks and administrative responsibilities throughout the duration of the contract.
The Goods and Services: Any goods or services provided to the government agency for the purpose of delivering public services to the beneficiaries.
The Public Service: Any service provided by a government agency directly or indirectly for the purpose of providing goods or services to the beneficiaries.
The Contract: The income participation contract for the provision of goods and services.
Value for Money: The private partner achieving an economic return for the state (either directly or indirectly) throughout the stages of the contract.
The Net Present Value of the Contract: The net income expected throughout the duration of the contract, minus the value of the direct financial obligations incurred by the state based on the contract (if any).
Pre-qualification: The government agency's verification of the availability of the necessary qualifications and capabilities to provide goods and services among competitors before they submit their bids.
Post-qualification: The government agency's verification - after selecting the best bid - of the availability of the necessary qualifications and capabilities of the bidder to provide goods and services before awarding the contract to them.
The Comparative Study of Project Tendering Options: Estimating costs, income, and risks throughout the project duration from the state's perspective, in case the project will be implemented through any contracting method in accordance with the provisions of the law and regulations, excluding the income participation method, taking into account any public revenues that may arise from that.
The Income Participation Equation: The equation that determines the expected income and the distribution ratios.
The Allocation: The partnership between the public and private sectors and/or the transfer of ownership of assets in accordance with the definition provided in the Privatization Law issued by Royal Decree No. (M/63) dated 5/8/1442 AH.

The aim of securing goods and services through the income-sharing method is as follows:
1- To raise the quality of goods and services, rationalize public spending, increase state revenues, and improve value for money for the public treasury of the state by allowing government entities to secure their purchases of goods and services from the private partner through the income-sharing method.
2- To encourage the private sector to invest and benefit from its financial, administrative, organizational, technical, and technological capabilities and expertise, thereby enhancing the economic and social development of the Kingdom and obtaining the best goods and services at the lowest costs.

1- The rules apply to all government entities that wish to contract for the provision of goods and services through a revenue-sharing method.
2- No government entity may enter into a contract except in accordance with the provisions of the rules, and any contract entered into in violation of this shall be null and void.
3- The rules do not apply to privatization projects and contracts.

In accordance with the provisions of the Law and the relevant regulations, rules, and systems in the Kingdom:
1- Government entities shall engage in securing goods and services through a revenue-sharing method with a licensed private partner to provide the goods and services subject to the Contract in accordance with the applicable laws and regulations.
2- The procurement of goods and services from the private partner through the revenue-sharing method is subject to the principles of publicness, transparency, integrity, and equal opportunities.

• The Government Agency - in accordance with the provisions of the regulations - may contract to secure goods and services through a revenue-sharing model - either wholly or partially - with the private partner, in accordance with the following limits and criteria:

• 1- The duration of the Contract shall not exceed (five) years, and it may be extended in contracts where the nature requires it; after the approval of the Ministry, without prejudice to the provisions of paragraph (3) of Article (three) of the regulations.

• 2- The contracting process to secure goods and services shall include any of the following:

  • A- Granting the right of usufruct, leasing, or licensing of government assets to the private partner for the purpose of enabling them to provide the goods and services secured for the Government Agency, in accordance with the relevant legal provisions.

  • B- Granting the private partner certain moral rights related to the state and associated with the provision of public services in accordance with the relevant legal provisions.

• 3- The source of income resulting from the Contract shall not be primarily funded by the state.

• 4- The Contract shall not include the state providing the private partner with any form of guarantee or credit support related to a specific level for securing goods and services, except for guarantees of minimum usage related only to the use of the Government Agency (if any), without prejudice to the provisions of paragraph (3) of this Article.

• 1- Without prejudice to the provisions of the Law and regulations, the competition documents must include - at a minimum - the following:

  • A- Information and data related to the goods and services offered in accordance with the provisions of the Law and regulations.

  • B- A statement of the information and data required to be submitted in the technical and financial proposals, and the criteria for evaluating the proposals.

  • C- A statement indicating whether competitors are required to provide any form of guarantee, and the mechanism for calculating it.

  • D- A statement indicating whether a final round of negotiations will be conducted with the competitors, specifying the negotiation elements, and the feasibility of applying a final best offer round.

  • E- A draft of the Contract, in line with the requirements of the feasibility study and competition documents.

• 2- The competition documents must include instructions and conditions for the competition, a statement of its stages and procedures, and information about the minimum percentage of the Government Agency's share in the income (if any).

• 3- The Government Agency may include in the competition documents a requirement for the private partner to establish a company to execute the Contract, and the competition documents may specify the provisions related to the establishment of the company, including the timeline for its establishment and the minimum capital without prejudice to the provisions of the Companies Law.

• 4- The Government Agency shall present the feasibility study and competition documents - before starting to issue them - to the Ministry for approval of the initial proposal for the income-sharing equation.

1- The Government Agency shall initiate the competition for securing the procurement of goods and services from the private partner through the income-sharing method after obtaining the approval of the head of the Government Agency (or their delegate), in accordance with the provisions of the Law and regulations.
2- The competition for securing the procurement of goods and services from the private partner through the income-sharing method shall be conducted using one of the available bidding methods in accordance with the provisions of the Law and regulations.
3- The Government Agency shall conduct a pre-qualification or post-qualification process to secure the goods and services from the private partner through the income-sharing method in accordance with the provisions of the Law and regulations.

1- The technical proposal must include the technical, administrative, and financial capabilities, as well as the practical experiences of the bidders that reflect their ability to fulfill the contractual obligations in accordance with the nature and size of the contract.
2- The financial proposal must include the income-sharing formula in accordance with the provisions of Article (Twelve) of the regulations.