The contracting sector in Saudi Arabia is facing big challenges because of the Labor Ministry’s recent decisions such as the imposition of a levy of SR 2,400 per expatriate worker for companies not meeting the stipulated Saudization quota, which may hinder business projects in the Kingdom.
This was stated by Saleh Abdullah Alsayd, chairperson of the Contracting Committee and a member of the board, while addressing a press conference with Abdulrahaman Al-Rashid, chairperson of the Alshariqa chamber.
They said that the next event, which will be held under the patronage of Minister of Municipality Mansour bin Mutaib, in Dammam, on Tuesday, will deal with industrial contracting.
Al-Rashid said that the contracting sector needs to be organized and paid more attention to by the government. "Aramco succeeded in developing many contacting companies years ago and consequently they grew effectively and became successful companies,” he said.
According to them, the FIDIC contracts guide can provide solutions to the contracting sector in Saudi Arabia, however, the ministry of finance had changed some of its terms and transferred it to the expert commission.
With regard to the upcoming event, there will be nine scientific papers which will review all problems and discuss solutions benefiting the contracting sector in the Kingdom.
To a question on the economic performance of the contracting sector, Alsayd said, “the contracting sector growth increased from 2.2 percent by the end of 2008 to 4 percent by the end of 2011. The total GDP was SR 90 billion. However, SR 285 billion was set to be spent on contracting projects for this fiscal year.
According to 2011 statistics, the contracting sector is considered to be one of the biggest economic sectors in the Kingdom which absorbs more than 3.5 million workers, estimated to be 45.1 percent out of the total number of workers in all major private businesses. “These numbers show the importance of this sector in creating jobs,” he said.
"As per 2011 statistics, Saudiziation in the constructing sector was 252,000 workers, and the upcoming conference would discuss how to increase it, and create a national employment program," Alsayd said.
He said that according to the contractor rating system in 2012, there were 2,769 contractors of which 43.1 percent were in Riyadh, 16.8 percent in Makkah, and 13.8 percent in the Eastern Province.
He said the total current investment in the contracting sector in the Kingdom reached SR 300 billion. He expected the upcoming conference to come up with solutions to the obstacles that face contracting sector.
Both of them stressed that even though there are more than 280,000 contractors in the Kingdom still there is no contracting commission for these companies and constructions. “If the government does not create a contracting commission, we will have problems,” he added.
Contracting sector faces big challenges
