Abdullah Ridwan, chairman of the National Committee for Contractors at the Council of Saudi Chambers of Commerce and Industry, said a number of ministries and government agencies had completed their studies on the scheme.

Contractors pin their hopes on the scheme solving a number of problems faced by them due to the absence of a unified contract.

“The scheme will serve as a big guarantee for the group of contractors in the second major group, in terms of volume after the oil sector.

The Ministry of Finance has collected the opinion of contractors about the mechanism suitable for its effective implementation, after following the example of a number of foreign countries,” Al-Riyadh newspaper reported Ridwan as saying.

Ridwan said that implementation of the unified contract would solve nearly 80 percent of the problems faced by contractors in the Kingdom.

“It would also protect the rights of all parties concerned, including local contractors and the concerned agencies. Moreover, the system would be a guide to work in accordance with international rules and regulations. It would virtually act as an arbitrator in most cases of dispute concerning the contract,” he said.

According to him, most problems faced by contractors with regard to adequate manpower supply would be solved soon with the launch of two companies for the recruitment of foreign labors.

The companies are expected to start operating before the end of 2011, pursuant to the decision of the Council of Ministers. This decision stressed the need to establish companies for hiring labors for the contracting companies, as was prevalent in other GCC states.

The chairman also drew attention to another major problem faced by Saudi local contractors. “The absence of a specialized fund to give loans to contractors and the subsequent lack of funding resulted in delaying projects. Contractors are struggling hard to implement several government projects in the wake of a big increase in the number of projects announced in the general budget,” he said, adding that setting up the special fund would boost the productive capacity of the Saudi contracting sector, a major pillar of the local economy.

Ridwan played down the apprehensions about rising prices of construction material in the local market.