JEDDAH: Family owned construction companies in Saudi Arabia have been urged to merge and form joint stock companies.
The call has come from an official of the Council of Saudi Chambers of Commerce and Industry (CSCCI). Abdullah bin Bakr Radwan, member of CSCCI’s National Committee for Contractors, said on Wednesday that Saudi contractors should take advantage of the massive construction boom in the Kingdom as the government’s spending on infrastructure projects was exceeding SR60 billion a year.
Radwan also reminded the contractors of the recommendations of the first National Contractors Forum held in Jeddah last year. According to him, call for merger of contracting firms was one of the strongest recommendations which was further reinforced by another forum held in the Eastern Province.
He said during the construction boom of 1970s, most of the enterprises were family based who drove their strength from the founder of the business. Then after his death, the business would suffer.
Radwan said the Saudi contractors must not miss the opportunity to consolidate their position in the current phase of construction boom. Unlike the 70s when temporary alliances were formed for particular projects, merger of contracting companies was need of the hour. This would specially enable smaller companies to work under big banners and compete for huge projects as it is done in advanced countries, he maintained.
Radwan also welcomed the recent announcement of merger between eleven contracting companies and said that it needed support from all sides including the government.