Transportation of passengers by buses of eight passengers or more that operate at affordable fares on a regular basis within specified limits and along specific routes shall be deemed public utility.

Public transportation by bus shall operate on the public road network within or between cities pursuant to a concession contract and for a limited period, unless the State decides to operate the service on its own.

The obligation of public mass transport for passengers is granted by a royal decree, which specifies the duration of the obligation not to exceed fifteen years. It may be renewed or extended for a similar period by a decision of the Council of Ministers based on a proposal from the Minister of Transport and Logistics Services, taking into account the applicable regulations at the time of renewal or extension. The Minister of Transport and Logistics Services is authorized to choose the most appropriate procedures and means to evaluate the applicants and to issue a list of the conditions of the obligation contract, which must include the penalties imposed for violating any of its provisions, and to specify the insurance that the obligor must provide and retain until the end of the obligation.

It is required that the obligor be a Saudi national or a Saudi company, with the participation of Saudis in its establishment, provided that the share of Saudis in its capital does not fall below (51%) throughout the duration of the obligation. The state may, based on the proposal of the Minister of Transport and Logistics Services, contribute to the capital of public transport companies with the share it deems necessary to enable these companies to achieve their intended purpose.

The Minister of Transport and Logistics Services may, during the period prior to granting the obligation or while proceeding with the procedures for granting it, allow the operation of public transport on that line through a license. Additionally, if it becomes impossible to continue the obligation on a certain line or area, he may allow the operation of that line or area through a license until it becomes possible to revert to the method of obligation. The Minister of Transport shall determine the procedures and conditions for the license and its duration, which shall not exceed one year, and it may be renewed for another period or periods.

The Minister of Transport and Logistics Services may, by his decision, make changes to the routes and areas that are part of the public road network, by modifying their traffic lines, canceling some of them, or adding new traffic lines, whether this is before or after granting the obligation. In the case of adding new traffic lines after granting the obligation, the Minister of Transport and Logistics Services may, by his decision, add them to the obligated party for the remaining duration under the same terms of the obligation.

The Minister of Transport and Logistics Services shall form a Committee in each city, chaired by the Director of the Transport Department, with representatives from the municipality, traffic department, and the Ministries of Commerce and Industry, as well as the committed company. The Minister of Transport shall determine, by his decision, how the Committee shall convene, carry out its work, and issue its recommendations. This Committee shall supervise the implementation of the commitment contracts or licenses granted for passenger transport in the city, and apply their provisions in a manner that ensures the regularity of the facility and its performance of the required services. For this purpose, it may conduct financial, administrative, and technical inspections of the committed or licensed company, either by itself or by delegating others for this purpose, and document any violations that may arise from the inspection, propose appropriate penalties, and submit its recommendations in this regard to the Minister of Transport for the issuance of the necessary decisions.

The authority granting the concession may cancel the concession and confiscate the security provided under the concession contract if the concession holder:

• a) fails to operate buses within a part of a concession area or route;

• b) operates fewer buses than the number specified in the concession contract;

• c) changes the route specified in the concession contract;

• d) charges fares higher than the prescribed fares; or

• e) assigns the concession for operating all or certain routes covered by the concession contract, or some of the rights arising from the contract without prior consent.

The authority granting the concession may claim compensation for any damage sustained by the facility due to cancellation of the concession.

The Minister of Transport and Logistics Services shall issue a regulation to organize small taxi vehicles in a manner that ensures coordination between them and the operation of public transport buses, and achieves the interest of the transport facility.