Asset management as a pillar of financial sustainability in Saudi Arabia

Executive summary

The challenge

As Saudi Arabia transitions to accrual-based accounting, many public sector entities struggle to build and maintain complete, reliable fixed asset registers (FARs). While the initial hurdle is establishing these registers – often from fragmented or non-financial records – the greater long-term difficulty is maintaining them in a way that continuously supports sound decision-making. Traditionally treated as a compliance exercise, asset management in the public sector risks remaining disconnected from core financial planning, budgeting and service delivery processes.

This disconnect threatens to undermine long-term fiscal sustainability. Without lifecycle-based investment planning and cost optimisation, public entities may face rising operating costs, underutilised or poorly maintained assets and growing fiscal risks. In short, accrual accounting on its own is insufficient – it must be embedded in a broader, integrated asset and financial management system. Financial management and asset management must be mutually reinforcing: without long-term planning, asset performance will stall and without asset visibility, financial plans lack credibility.

The opportunity

Saudi Arabia is proactively addressing this challenge through a dual-track reform agenda. At the entity level, finance departments are evolving their operating models to include dedicated asset management (AM) units, designed not just to meet accounting standards, but to actively drive value from assets across their lifecycle. This includes redefining roles, strengthening data flows and embedding AM into budgeting, capital planning and performance monitoring.

At the national level, institutions such as the Ministry of Finance (MoF), Expenditure and Project Efficiency Authority (EXPRO) and State Properties General Authority (SPGA) are issuing structured guidance, launching enabling frameworks and aligning capital planning with long-term performance and fiscal discipline. 

While the current national guidance is well suited to achieving immediate transition objectives such as the shift from cash to accrual accounting, it must now evolve to support the longer-term sustainability of asset management. This includes formalising AM units within entities, clearly defining roles and responsibilities and embedding asset lifecycle management (ALM) practices that align with international standards and leading practices. Critically, guidance must go hand in hand with structured adoption, supported by clear implementation roadmaps, maturity models and continuous improvement plans tailored to each entity’s operational context. 

The government is also deepening engagement with the private sector through improved procurement models, long-term maintenance contracts and public-private partnerships (PPPs) to deliver and maintain assets more effectively.

Oversight bodies such as the General Court of Audit (GCA) are expanding their remit beyond compliance to include performance audits and value-for-money assessments, reinforcing accountability and continuous improvement.

While these national frameworks have been instrumental in guiding the shift to accrual accounting, there is now a clear opportunity to lift the maturity of asset management systems by adopting internationally recognised standards and proven global practices. Standards like the ISO 55000 series provide a roadmap to integrate lifecycle planning, risk management and performance tracking into day-to-day operations. Countries such as Australia and the United Kingdom (UK) illustrate that when asset management is elevated to a strategic function, it yields measurable gains in cost control, service quality and financial resilience. Saudi Arabia’s rapidly growing and diverse public asset base offers a unique opportunity to replicate and adapt these successes as part of Vision 2030’s fiscal and service delivery transformation. This will be further illustrated in section 3 of this paper.

The way forward

To unlock this value, Saudi public entities must empower their AM units to go beyond compliance and assume a central role in public financial management. This requires capability building, role clarity and strategic alignment between financial and operational functions. Asset data must inform long-term financial plans, investment prioritisation and performance-based budgeting.

The next phase of reform should focus on:

• Embedding ISO-compliant Asset Management Systems (AMS) across entities

• Integrating asset lifecycle costing with medium-term fiscal planning

• Leveraging digital tools for predictive maintenance and asset optimisation

• Aligning national guidance with international benchmarks and case studies

• Establishing key performance indicators (KPIs) and governance structures that track both financial and non-financial asset performance

With the right institutional support, AM units can serve as the connective tissue between technical operations and financial decision-making, driving evidence-based investments, improving service delivery and strengthening the long-term fiscal health of the Kingdom.

This paper outlines a roadmap to build these capabilities, align with national public financial management (PFM) initiatives, enhance existing guidance for long-term AM sustainability and accelerate maturity through structured adoption of global standards and practices.