JEDDAH, 3 December 2007 — With the real estate and construction sector booming throughout the GCC, it is no surprise to many that the latest trend sweeping the investment scene is the construction of gas stations throughout Saudi Arabia.
The ease in which a gas station can be established is the explanation, research showed.
“In the last couple of years I have built four gas stations and found it a very profitable and an easy business to establish,” said a Saudi businessman who requested anonymity. “All an investor has to do is buy a plot of land, build up the facility, provide necessary equipment such as gas pumps and then once the project is complete advertise it for rent,” he said.
Another reason for the growth in popularity is that rents have reportedly been fetching as much as SR150,000 to SR2 million annually, 14 percent higher compared to other residential projects. Seizing the opportunity, the banks see the strategic locations of the gas stations as the place for their automated teller machines (ATM).
“For us it is all about customer satisfaction and making our clients happy,” Suliman Al-Qubasi, marketing director at Al-Rajhi Bank told Arab News. When asked about the benefits earned by banks with ATM’s in gas stations, Al-Qubasi said, Al-Rajhi as well as other local banks don’t take special fees or other incentives from customers for using our ATM machines but we feel that a happy customer is a long standing customer and providing convenience by strategically placing our cash machines in gas stations, shopping centers and hypermarkets is one way of pleasing our client.”
However, despite the efforts of providing customers with a effortless experience at the pumps and a wealth of money to be made by both private companies and local investors, the trend has recently become the subject of scrutiny due to its negative impact on the Saudi government’s efforts to establish an improved infrastructure system while maintaining the Kingdom’s presentable image in the promotion of the country as a global tourism destination, many say.
And it’s not just the government’s efforts which are being dashed but a number of Saudi citizens are also up in arms saying that builders of gas stations simply aren’t taking into consideration the location of their construction projects and are only thinking about the extra profits to be made and not the inconvenience and unsafe effects the stations are having on neighboring schools and residential homes.
“ Since I built my home in the Mohammadia District in Jeddah three years ago, I have witnessed a number of businesses and other residential homes whose inhabitants have all become my welcomed neighbors but by far the building of a gas station which was constructed seven months ago only meters from my home has become a cause for concern due to the level of noise and pollution which has almost become too much to bear,” said Zuhar Muhammad, a Saudi homeowner.
Results of a study conducted by Basam Al-Tawalbini, a student at King Fahd University of Petroleum and Minerals, and Ali Al-Qatani, a member of the Saudi Fire Department, entitled “Environmental Criteria”, yielded proof of the residents’ frustration.
The study showed that while the number of gas stations has reached more than 70,000 Kingdom-wide, at least one fourth of the facilities were not built in compliance with the Ministry of Municipalities and Rural Affairs pre-construction regulations, have a negative impact on health and lifestyles on residents in neighboring areas and fail to comply with environmental and atmospheric criteria.
The study also revealed that despite catering to over 7 million vehicles per day, at least 20 percent of gas stations were not properly equipped with necessities such as oil dumpsters to handle the nearly 150 liters of grease and lubricant waste omitted from each station daily.
On the other hand, station owners don’t think that the increase in the number of gas stations is the dilemma, telling Arab News that the problem lies with the Ministry of Municipality and Rural Affairs officials who don’t give proper attention to inspection procedures. “I believe the complaints and inconvenience of the increase of gas stations is due to the failure of concerned officials to investigate the construction site before beginning with the project aside from rampant bribery prevailing among concerned officials and the building owners who want to get the necessary paperwork done fast,” said a gas station owner who requested to withhold his identity.
“If the gas stations are being built in inconvenient places or are in violation of safety or other regulations, I think that these facilities should be forced to shut down until they conform to proper standards,” he said.
