| 4. In which ways is the initiative creative and innovative?
The implementation of three out of four strategic initiatives discussed so far is ongoing and important milestones are being achieved:
1) The implementation of IT application platform including eligibility and prioritization mechanisms was done through the following steps:
■ By July.2013: Translation of the eligibility and prioritization mechanism into a draft policy and submission to higher authority for approval
■ By Sep.2013: Establishment of data collection mechanism in collaboration with all governmental and non-governmental parties representing data sources
■ By April.2014: Implementation of the online application platform, integrating different data sources, and launch of the online application platform to the public
■ By Oct.2014: Run of the first eligibility check on the received applications and announcement of eligibility outcome, and priority rank for eligible applicants
■ By Oct.2014: Receiving and addressing appeal requests and adjusting eligibility status accordingly in the online platform
2) The implementation and launch of PPP program for development on Ministry owned land was achieved through the following steps:
■ By Nov.2013: Establishment of an internal PPP unit to drive implementation of the program
■ By Jan.2014: Development of minimum technical standards
■ By Feb.2014: Translation of the defined operating model into a contractual framework
■ By Mar.2014: Development of an evaluation framework for potential partners taking into account organizational and financial capabilities as well as previous experience and track record
■ By April.2014: Drafting a Request for Proposals describing the scope of partnership and all project details
■ By Jun.2014: Launch and management of RFP process and shortlist a set of developers
■ By Sep.2014: Assessment and approval of developer designs and their marketing material based on consistency and compliance with minimum standards
■ By Dec.2014: Launch and management of marketing, where developers market designed products to beneficiaries released by the Ministry based on priority ranks to create sufficient demand at each point in time for developers to achieve their objective
■ By Jan.2015: Identification of successful developers and management of non-successful ones –successful developers are provided with initial funding, based on number of sold units, and granted permission to start building. Non-successful developers will be disqualified and replaced.
■ By Feb.2015: Monitoring of construction through a technical consultant supporting the Ministry on technical validation of progress made by developers, identifying potential quality gaps or delays and managing developers accordingly
■ By April.2015: Start delivery of housing units to beneficiaries and start of loan payback
3) The implementation of the policy to unlock land supply is being planned and involved the following steps:
■ By Aug.2014: Drafting the policy and submission to higher authority for approval
■ Large scale public announcement of the approved policy
■ Signing a memorandum of understanding with relevant stakeholders, e.g. other ministries to facilitate implementation
■ Definition of roll out approach
■ Design of organizational requirements for implementation
■ Detailed approach design (e.g. use of GIS data to identify white land areas) and partnership with technical providers
■ Concept design of an IT system and partnership with IT providers
■ Creation of a land registry and definition of land use and properties for the registered parcels based on municipality and urban planning data
■ Determining ownership for registered land parcels
■ Determining the value of registered parcels, defining land zones and determining the fee levels applicable by land zone
■ Announcement of the proposed system to public and collection of public feedback
■ Definition and implementation of deferral, exception and appeal process
■ Definition and implementation of collection and enforcement mechanisms
■ Launch of the system and monitoring in order to perform changes where required (e.g. refining zoning, adjusting fee levels)
| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
Several stakeholders were involved in design and implementation.
Other Ministries and public entities:
■ Ministry of Justice for land ownership data
■ Ministry of Finance for refining the approach to the land-fee policy, in particular the fee collection
■ Ministry of Water and Electricity for data used in the eligibility and prioritization platform, as well as for the implementation of the land-fee policy
■ Ministry of Municipalities and Rural Affairs for provision of data for the implementation of the land-fee policy
■ Ministry of Interior for provision of civil status data and validation of applicant data for eligibility and prioritization
■ The Real Estate Development fund for the loan payback mechanism for the PPP program
■ The General Organization for Social Insurance (GOSI), the Public Pension Agency (PPA), the Saudi Arabian Monetary Agency (SAMA) for salary income data
■ The Ministry of Higher Education for students scholarships data to exempt from residential stipulation as an eligibility criterion
■ The Ministry of Social Affairs for special needs group data
■ The Ministry of Commerce & Industry for business records
■ The Ministry of Civil Service: for public sector employee data
■ The Saudi Post for post data
■ The National Water Company for water meters data
■ The Saudi Telecom Company for telephone lines data
■ Real Estate developers: validation of the approach for the PPP program
■ IT system providers and integration experts: implementation of the application, eligibility and prioritization platform as well as implementation of the land registry and related mechanisms for the land-fee
■ Strategy consultants: analysis of international experience and design of approach and strategies for the eligibility and prioritization approach, the PPP operating model, as well as the policy design and implementation approaches
■ Technical consultants: on the implementation of the PPP program
| 6. How was the strategy implemented and what resources were mobilized?
Being made a priority for the Kingdom, the housing program is funded by the Government and seeded with USD ~70 billion which have been ring-fenced for the program. Given the PPP construct, however, the private developers find themselves also involved in funding of housing units and bearing the risk of non-recovering their funds if they do not manage to sell-off the totality of the units that they build to beneficiaries.
The program with its various initiatives is driven by the department of planning and strategic studies of the Ministry, e.g. through the recently formed PPP unit for the PPP program, and leveraging multiple internal and external resources on demand and as required. Internal resources include other Ministry departments (e.g. legal department, procurement department, technical department). External resources leveraged so far include technical consulting teams, IT consulting and system integration teams, strategy consulting teams as well as legal teams. For the implementation of the land-fee policy further specialized teams and resources will be required such as Geographic Information System (GIS) providers.
| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
The program is still under implementation, yet it has delivered a set of successes so far:
1) Eligibility and prioritization platform:
■ ~960,000 households have submitted applications to the housing program within two months from the launch of the online application platform Eskan
■ The eligibility mechanism has found over ~620,000 applicants across the Kingdom to be eligible and informed applicants accordingly
■ 49,165 applicants appealed against their non-eligibility and the appeal process found 40,983 out of these to be eligible.
■ 33,935 women (25,600 widows and 8,335 divorced) applied for the housing program as household heads, and were granted eligibility
■ 4000 housing units have been delivered and distributed to eligible applicants in Jazan based on the allocated priorities.
2) Public private partnerships for delivery of housing:
■ Launch of a national RfP to develop the pilot site involving ~1,200 residential apartments (housing ~7000 Saudi citizens) on a Ministry-owned site in Riyadh
■ 6 developers have been shortlisted and qualified and publicly announced to participate in the PPP process
3) Unlocking land supply:
■ Suggested land-fee policy drafted, submitted and in last rounds of discussion by higher authorities potentially leading to approval
| 8. What were the most successful outputs and why was the initiative effective?
The Ministry established a project governance structure consisting of a steering committee headed by H.E. the Minster of Housing and different initiative teams leading the implementation of the strategic initiatives discussed here.
The reporting takes place on a weekly basis, where the initiative teams report to the steering committee on achieved progress, but also on potential issues to seek resolution. Progress is not only assessed against predefined implementation milestones (e.g. planned RfP launch date for the PPP program), but also evaluated against quantifiable KPIs (e.g. number of appeal requests processed for the eligibility and prioritization platform).
Given the long-term perspective of the PPP program, the Ministry established a dedicated unit as part of its organization, the PPP unit. This unit has been mandated to manage the program delivery and oversee the works of the private partners reporting directly into the head of planning and strategic studies, who in turn reports directly to H.E. the Minister of Housing.
| 9. What were the main obstacles encountered and how were they overcome?
Several obstacles were encountered and needed to be addressed during design and implementation of the strategic initiatives:
1) Eligibility and prioritization platform:
Data quality issues and availability of digitized data were the main issues in the implementation, given high reliance on data to build an automated approach. To solve this issue, the Ministry used available proxies to cross check data (e.g. use of asset data to cross check income data) and adopted a conservative eligibility approach combined with an appeal process. In addition, digitization of paper-based data (e.g. ownership deeds) has been launched.
2) Public Private Partnerships:
High reluctance was expected initially from the private sector given the PPP construct implied a higher allocation of risk to the private sector. In order to manage this issue, the Ministry organized workshops, inviting private developers to openly discuss the approach in order to collect their feedback early on in the process.
3) Policy for unlocking land supply:
Once issued, the land fee policy is expected to apply to all qualifying land parcels across the Kingdom. However, the implementation of such a policy will be complex and difficult to manage in all cities simultaneously, which could put at risk its success. Therefore, the Ministry decided to define a gradual roll out strategy starting with a pilot in a high-impact location (e.g. Riyadh), where the supply gap is particularly important. This pilot enables the Ministry to test the approach effectiveness and take corrective measures for the roll out.
Another challenge faced in the policy implementation is the limited transaction data for land parcels, which makes their valuation difficult. Therefore, the Ministry is planning on applying the Computer Assisted Mass Appraisal methodology which relies on available transaction data and builds characteristics-based analogies between land parcels to determine the value of parcels in scope.