KSA invests in its future

KAEC tops the list of ongoing projects by dollar value.

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With the Gulf remaining in an economic crisis that has led to numerous projects being frozen or cancelled, Saudi Arabia continues to push ahead with an expansionary fiscal policy, to spend its way out of trouble.

The kingdom’s 2010 budget dispelled any lingering doubts about its ambitions, by providing a major boost to the projects sector, with SR260 billion (US $69 billion) of investment in new and existing projects, an increase of 16% on the previous year.

Overall, the 2010 budget includes a 14% increase in spending compared to the 2009 budget, with total expenditure expected to exceed SR540 billion. This included greater funds for infrastructure and double-digit spending increases in key areas of the economy include health, transport, telecoms and water sectors.

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Of this figure, SR135 billion (US $36.7 billion) – a quarter of public funds, the largest proportion of the 2010 budget – is allocated to education and training, which represents an increase of 13% over 2009.

The figures only add credence to the view held by a number of contractors in the kingdom that, contrary to the market of the UAE, Saudi Arabia represents a very fertile market for firms.

Joseph Daher, executive vice-president with Jeddah-based Almabani General Contractor said: “This year we will see a continuation of the construction boom we have witnessed in the kingdom in 2008 and 2009.

“Supported by good oil prices and strategy of the Saudi government to expand its infrastructure, airports, universities and colleges, it continues to be a very good market. I do not see any interruption of this boom in 2010 and in fact can see it continuing in 2011 barring circumstances as yet unseen,” he said.

Manuel La Guardia – chief estimator with Jeddah-based Saudi Freyssinet echoed Daher’s view on the market – although the firm is not as heavily involved with public sector work – and said the market in general is looking better in 2010. “It is getting better certainly, I think it’s fair to say it’s quite good. We have a number of projects we are looking to submit bids for currently.”