Saudi Arabia to award $ 50 bn in new projects

Saudi Arabia to award $ 50 bn in new projects
Updated 19 September 2012

Saudi Arabia to award $ 50 bn in new projects

Saudi Arabia to award $ 50 bn in new projects

Participants at the Saudi Mega Infrastructure Projects (MIP-2012) summit acknowledged that the Saudi project market is now the largest in the region following the collapse of activity in the United Arab Emirates.
In 2011 the KSA market was double the other GCC states combined, Edward James, CEO of Meed Insight told Arab News.
He said rapid growth in the region with the negative growth in Europe and difficult times in North America attracted foreign companies to the Kingdom. Saudi Arabia is expected to award more than $ 50 billion in projects, equivalent to an additional $ 10 billion a year. Monday’s session was presided over by Edmund O’ Sullivan, chairperson of MEED and chairperson of the summit.
In a separate interview, Chief Executive Officer of the gC. Company, Faisal Alfadi, said Saudi Arabia’s Ninth Development Plan 2010-14, approved by King Abdullah in 2010, estimates public spending of $ 385 billion on construction and infrastructure.
Consultant engineer Alfadl, founder of FA partners and director of the organization committee said Saudi Arabia is 100 percent open for investors and the Kingdom expects $ 80 billion in investments next year. The two-day event will address the challenges in Saudi Arabia, he added.
He said the Saudi bin Ladin Group and Saudi Oger were by far the biggest enterprises with an estimated $ 40 billion worth of contracts in hand.
In his presentation he said, “We are here because we are inspired by the words of the Custodian of the Two Holy Mosques King Abdullah who maintains commitment of the Saudi government to promote the 9th five-year economic plan, which is about Infrastructure development in all aspects and support knowledge-based economy necessary for the completion of mega projects in the Kingdom.”
Alfadl said, “I would like to emphasize the significant effort of the Saudi government in stimulating economic growth for businesses locally, as extended to neighboring countries by not only meeting the demands of expertise but also seeking goods and services,” he said, adding the event is the public to private sector relationship that permitted b2b conferences to discuss ideas, new strategies and ways to find new partners or recommend business policies.
He said they are here to exchange ideas, access information, create networks and find partners. Their whole objective is to expand the value for each one of their partners and increase business and reduce risk in the extremely challenging mega project market. They also want to find answers to “how we can meet the demands of quality, time and cost but also become environmentally sensitive, highly efficient and green in our approach. It is our duty to preserve our ecosystem for generations to come in every way we can.”
He expressed his gratitude to the Ministry of Commerce and Industry for endorsing this valuable contribution to stimulate b2b intelligence exchange by making it possible for them to invite delegates and share knowledge. “We have taken the first little step toward the mega initiative.” Alfaid said, “Our Saudi MIP summit aim is to promote economic prosperity and discuss urbanization and construction infrastructure markets and to advocate sustainable development. We are here to answer all questions and leave no stone unturned to achieve our objectives and goals.”
He noted the summit would also address issues of global warming and CO2 emissions, noting the first step is to reduce the Carbon ecological footprint in GCC countries at seven hectares per person; a reason to worry in view of the world average of two hectares per person.
“As we host world green building week and as prospective Saudi member of World Green Building Council, I want to encourage you to look at more energy efficient projects which can reduce the ecological footprint and look for ways to improve our bio capacity,” he said.
In his presentation, Edward James said, in contrast to some of its neighbors, the Kingdom’s project market is far more diversified, with no single sector dominating, and generally, the scale of projects is far larger.
Outlining the key drivers of demand, James said the Kingdom project market is driven by the same factors as its neighbors; a fast-growing economy – average real annual GDP growth rates in GCC at five percent and four to six percent in the wider MENA region. By 2016, MENA GDP will be $3.6 trillion compared with $2.4 trillion in 2010.
He referred to a new generation of leadership committed to diversification, the relative failure of previous oil booms and the growing need for greater utility and housing, as well as the Arab Spring.
He said there is an obvious correlation between the price of oil and project market growth, although this correlation does not extend to the oil and gas sector. The Kingdom has the perfect project market configuration – a need and the financial ability to meet the need.
Going forward, the proportion of private sector schemes is likely to increase as the government encourages greater private-sector participation in project development. This will take the form of an increased focus on private power, water and wastewater projects as well as greater private-sector activity in real estate.
Abdullah Al Fassam, senior project manager of Saudi Industrial Property Authority said, “The summit is a great opportunity to meet contractors, consultants and clients and form networks.
This can enhance our position in the Kingdom, as we are a major player and the first choice of local and foreign investors. Delegates with different experiences are here to help understand government policies to find solutions to industry problems and find workable solutions.”