Contractors welcome initiative to curb project monopolization

Contractors welcome initiative to curb project monopolization
Updated 27 September 2013

Contractors welcome initiative to curb project monopolization

Contractors welcome initiative to curb project monopolization

The National Committee for Contractors at the Saudi Council of Chambers of Commerce has decided to bring together major medium and small-sized business enterprises in the Kingdom to form business alliances and consortiums to bag giant projects.
The efforts come in a bid to curb the phenomenon of monopolization of major government projects by certain companies.
Fahd Al-Hamadi, head of the committee, said they were in the process of working out a mechanism to ensure that these business groups would be able to competitively bid for giant projects and by providing the expertise required for such projects.
“The decision taken by the Royal Court to break the monopolization of government projects has been welcomed warmly by the other contractors,” Al-Hamadi said, adding: “We would like officials to give the decision serious attention to serve the contracting sector in the Kingdom.”
He assured contractors that the decision would not cause damage to giant projects if there was strong competition in the sector. “I strongly hope that government bodies take into consideration the positive competitive side so that contracts are granted to the best bid in terms of quality of performance regardless of the prices offered,” he said.
Al-Hamadi pointed out that some government bodies specifically “rehabilitate certain contractors in its projects.” “The best thing to do is to open the doors for all contractors to bid, and then study these bids thoroughly,” he added.
He said that small and medium enterprises should be given the chance to participate in the process by way of subcontracting. “In this regard, a mechanism between the Ministry of Labor and the government bodies should exist so that SMEs can enter the process of implementing these projects in a regulated and organized manner,” he said.
“The national committee agreed with the Saudi Council for Engineers to establish a higher committee for construction and building. The committee will have engineers and contractors as members and will work to overcome any obstacle that consultants face in implementing the projects and resolve any differences that emerge between the parties,” he explained.
He said that several meetings will be held to discuss the modalities of forming alliances between SMEs to help them win giant projects. “There are different categories that may involve the implementation of projects, including water and sewage, roads and electricity projects,” he pointed out, citing the example of the trains project.
“The committee meets on a regular basis in every region throughout the Kingdom to discuss the problems and find solutions to overcome them. The meeting in Madinah discussed the conditions and circumstances of contractors in the city and tried to work out mechanisms for cooperation between the sector and the committee.”
He said the committee would submit a letter to Madinah Governor Prince Faisal bin Salman listing the problems faced by contractors and seeking his help in resolving them.