Understanding investment in education

A three-day conference on “Investment and Finance in Educational Buildings” concluded at the headquarters of the Ministry of Education in Riyadh on Thursday.

The conference, organized by the Ministry of Education and Tatweer Building Company, included panel discussions and an exhibition to explain the role and functions of Tatweer companies in the education sector.

Architect Eyad Nazmi, general manager for studies and designs at the Ministry of Education, spoke about the main objectives of the conference. “This conference was meant to provide investors with a thorough understanding of the significance of investment in education and encourage them to invest more. At this conference, we clarified incentives and simplified regulations under the new system. The aim was to attract all types of investors, whether with tight or big budgets. Furthermore, we want to cover the whole of Saudi Arabia and work closely with the investors to ensure the best environment for growth. We updated our regulations to facilitate investment,” Nazmi said.

When asked about how the student will benefit from this new system, he said: “According to a government decision, all owners were required to shift schools operating in rented residential buildings or villas to proper schools. They were given sufficient time to get land and construct standard school buildings. All these procedures were taken to ensure good atmosphere for better delivery of education, which certainly will have a positive impact on students and their grasp of knowledge. Residential buildings cannot be used for educational purposes.”

Regarding the differences between residential and educational buildings, he said: “There is no comparison. The only requirements of a residential building are kitchens, toilets and rooms for people to sleep in. However, the educational process is completely different. To enhance the educational environment, we need facilities such as laboratories, libraries, playgrounds and rooms for recess, in addition to space to conduct extracurricular activities and safeguards to protect the students and staff.”

Speaking about complaints by some investors about the deadline given to investors to close schools operating in residential buildings and transfer students to proper schools was too short to get permits, finish paperwork and construct, he said: “This decision was announced five years ago. We were surprised that some investors did not know about it. Then, we gave two more years. Two years are more than enough to acquire land and construct a school building with all facilities under the current simplified regulations. If an investor has a tight budget and does not have sufficient liquidity to purchase land, he should go to the ministry’s branch in the province and explain his case. The ministry then will give him land on free lease for 15 to 25 years. The investor can construct on the land a school that meets the ministry’s standards and criteria. The investor can take the income from the school during the lease period, after which the land will return to the ministry along with the building.”

Baar Alfughom, vice president for commercial projects in Tatweer Buildings Company, said: “We started the first session introducing the companies of Tatweer, starting with the Tatweer Holding Company and its role and function. We then talked about how the other Tatweer companies branched out from King Abdullah Program for Education Development. The companies are Tatweer for Education, which is involved in improving and enhancing education; Tatweer for Transportation, which is responsible for students’ transportation from and to schools; and Tatweer Building Company, organizer of the event.”

Tatweer for Technology was established a couple of months ago and is still under development, he said. “I will speak on behalf of Tatweer Building Co. The company secures land and project management offices. In line with the Vision 2030 and the National Transformation Plan 2020, we have taken the initiative to support the Ministry of Education’s plan to increase the number of students in private schools. In the Kingdom, there are 5.6 million students but only 12 percent of them receive their education from private schools. The plan is to increase this rate to 25 percent by 2020.”

He said Tatweer Building is only responsible for providing the land and then the investor has two options: either to build themselves according to the ministry’s criteria or assign the company with the task of construction, design, supervision and the facility management.

When asked about the duration of the contracts, he said: “We are already awarded contracts worth SR4 billion to build schools. We have sufficient expertise to build schools across Kingdom. The average time depends on the size, location and capacity of the school but it is approximately 15 months.”

In response to complaints by some investors that 15 months is too short to construct schools, he said: “They can even build faster if the investor has an operator and financing ready. We have built schools of medium size with a capacity for about 750 students in 12 months. So, we can build it if the investor is ready with all the constituent factors.”