Industry too focused on price, say KSA watchers

Experts have called for the contract system in Saudi Arabia to be overhauled. They have said that many construction contracts are currently awarded to the lowest bidder, and not the most competent company.

The habit of awarding contracts to the lowest bidder is undermining safety and quality
The habit of awarding contracts to the lowest bidder is undermining safety and quality

Experts have called for the contract system in Saudi Arabia to be overhauled. They have said that many construction contracts are currently awarded to the lowest bidder, and not the most competent company.

The nation's construction industry is booming, with an estimated US $300 billion (SAR1.1 trillion) worth of projects being undertaken.

But many feel that the present contract system must be changed as it is leading to poor quality of work and a lapse in health and safety standards.

One project manager, who asked not to be named, told CW: "The situation here is that the lowest bidder is given the contract and then people wonder why so many people are killed on sites.

"We need to be in the situation, which is starting to happen in other parts of the GCC, where the most competent firms with the best safety records are given the contracts.

"I have been here quite a few years and it is slowly starting to change. We are leaning on the pyramid and making some headway, but it is slow progress.

John Gibbs, health and safety manager, Saudi Arabian Bechtel Company, agreed that cost should not be the most important factor in deciding tenders.

"We need a process that will ensure that contracts are awarded on technical competency and not on lowest price," said Gibbs.

Worker safety was another important issue which needed addressing, the experts claimed. The project manager said: "Currently, injuries and deaths on roads must be among the highest in the world, and the same could probably be said for construction sites.

Many construction accidents are not reported, recorded or given enough credence.

"The general lack of internationally-recognised company standards does harm the reputation of the country as a whole and I hope this can be changed. The industry needs to modernise and modernise quickly.

Elfatih Idris is general sales manager for crane provider Saudi Liebherr. "The big companies are very interested in [health and safety], but the smaller crane operators are not so interested," he said.

Small companies are into an economically cheap solution, which means they're less interested in training and some of them allow untrained people to operate cranes."

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