Kingdom: Transport projects going ahead as scheduled

Updated 25 October 2015
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Kingdom: Transport projects going ahead as scheduled

ALKHOBAR: Saudi Arabia is proceeding with public transport projects as scheduled and companies may face penalties if there are delays, Transport Minister Abdullah Al-Muqbil was quoted as saying by a leading local newspaper.

With low oil prices slashing the government’s export revenues and forcing it deep into deficit, the finance ministry has said it is trimming expenses, and there has been speculation that the budget for public transport infrastructure could be one victim.
Spanish train maker Talgo Tsaid in July that Saudi Arabia had canceled a $201 million contract for six high-speed trains; neither the company nor the government gave a reason.
Some construction industry executives have reported delays in obtaining payment from Saudi government bodies, though others have experienced no problems and it is unclear if any delays are due to a tight budget rather than to the bureaucratic inefficiencies which are common in the region.
Speaking to the Al-Jazirah daily, Al-Muqbil indicated there would be no major cutbacks to transport projects, which the government considers important to limit growth in domestic energy consumption and create jobs.
He said the government had allocated SR200 billion ($53.3 billion) to be spent on public transport plans in cities with the highest population densities.
“Whether it is public transport projects or trains...the schedule of execution has been set by the Council of Ministers...Each project has a specific schedule and its execution is within an identified time frame with no delay,” Al-Muqbil said.
“Definitely, no delay is allowed on all the ministry’s projects, whether roads or public transport...Violations will be spotted and penalties will be imposed on companies in charge of these projects.”
Al-Muqbil said bids were under evaluation to procure and operate buses for a 10-year public transport project in Makkah.
Among the biggest projects is a $22.5 billion plan to build a metro system in Riyadh, to be completed in 2019; three foreign-led consortia were awarded contracts in July 2013.
Turki Al-Sudairy, project coordinator at one of the Riyadh metro contractors, told Reuters that the project had experienced no delays at all and it was now about 21 percent completed, with completion still likely in 2019.


Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

Updated 25 April 2019
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Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.
Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”
Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply. Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs. If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.
Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.