Changing tactics in Saudi

Saudi Arabia may be the largest construction market in the GCC, but it is a place where few companies have so far ventured.

COMMENT, Business

Saudi Arabia may be the largest construction market in the GCC, with a building programme reaching an estimated US $300 billion, but it is a place where few companies have so far ventured.

When talking to contractors in the UAE about expansion across the region, they all allude to the opportunities currently available or in the pipeline in Saudi Arabia.

They know it's a market that cannot be ignored, but it is also one that will need a fair amount of detailed study before entering.

This is partly because of the difficulty in accessing sufficient information at a distance as well as in capturing a market of such scale without a local partner.

But probably the most significant hurdle is one that is widespread across the region: finding the skilled personnel to deliver the projects.

The situation is slightly more unique for Saudi Arabia, in that companies may struggle to persuade the skilled staff they do have on board to make the move to the country.

One contractor said it would only take on work in the country with access to the local labour market, as it needed to keep its key staff for jobs in the UAE.

But the problem with the local labour market is that it is largely untrained, which has led to some dire consequences when it comes to health and safety.

One of the reasons why little is invested in training is because construction firms in Saudi Arabia are faced with the conflicting pressures of complying with government inspections and safety regulations, while being quick and cost efficient for clients.

Once again, this has promoted the trade-off in protecting workers to keeping the cost of building affordable.

The opportunities in Saudi Arabia for contractors at all levels are endless: six economic cities are to be built, along with new schools, affordable housing, power and desalination plants, airports, roads and seaports.

Price seems to be doing the talking in project tenders right now, with build quality and safety being shunted down the priority list.

But such tactics will have to change if Saudi Arabia wants development to be the panacea for its future demographic and economic needs.

Angela Giuffrida is the editor of Construction Week.

RELATED LINK: Building Saudi

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