Conference preview: Leaders in Construction KSA
From great challenges come great opportunities in Saudi Arabia
Saudi Arabia’s construction market is not without its challenges, but for those willing to make the effort it offers great opportunities.
Saudi Arabia remains the biggest of the region’s construction markets, and the one with the most potential. Figures recently published by Ventures Middle East show that the Kingdom has a 45% share of the GCC’s total construction market, way ahead of the UAE in second place with 31% and Qatar in third with 10%.
The total value of contracts awarded in the Kingdom is due to fall by around 12% in 2014 to $69.6bn, from $77.7bn in 2013, but last year’s figure was swelled by the award of around $23bn worth of deals to build the Riyadh Metro.
The Kingdom offers an array of opportunities for contractors in a broad spectrum of areas. The huge Riyadh Metro project – the biggest city transport network currently being built anywhere in the world – is set to be followed over the next couple of years by similar light rail and metro schemes in other major Saudi cities including Jeddah, Makkah and Dammam. A heavy rail network is also being built linking Jeddah in the east via Riyadh to Eastern Province cities like Dammam and Jubail.
Then there are the huge industrial projects aimed at diversifying the Kingdom’s economy. In Jubail alone, the $9.3bn Satorp refinery came on stream earlier this year at Jubail Industrial City, and directly behind it the $19.3bn Sadara complex – the biggest petrochemicals plant ever to be built in a single phase – is making good progress, with the CEO of majority shareholder Saudi Aramco declaring recently that it is now more than 70% complete and is on track for commissioning in 2015.
Yet building in the Kingdom is not without its challenges. A visa amnesty followed by a clampdown on expat workers without the correct paperwork last year is estimated to have caused delays at around 36% of sites and government targets have been set for contractors to train and employ at least 7% of Saudis within their workforces.
The impact that such measures have had on contractors working in the Kingdom is one of a number of subjects up for discussion at this year’s Leaders in Construction KSA Summit, which takes place at the Al Faisaliah Hotel in Riyadh on 29 October.
Other subjects which will be tackled by various panels of experts throughout the day include the challenges to workforce and materials capacity faced as a result of a growing project pipeline, how to garner more private sector investment to fund schemes, delivering social infrastructure projects and tackling the demand for affordable housing.
The conference is sponsored by Autodesk, Faithful+Gould, Bentley Systems, Hyder, Drake & Scull, Pinsent Masons, Trimble, Hill International, IHCC and Al Muhaidib Contracting.
For programme enquiries or details on attending the event, which is free for qualifying industry professionals, contact Anam Hilal on +971 4 444 3116.
LEADERS KSA - agenda
09.00am Welcome from conference chairman
09:05am Keynote Address
09:15am Panel Discussion: Saudi Arabia today and its next phase of developments
Significant amounts have been allocated towards projects in the infrastructure sector and resuming some of the Kingdom’s mega-projects. However, the biggest challenge the country is likely to face in its growth will be a heavy demand on labour and materials as it competes with nearby countries to build major schemes. This panel discussion will evaluate the current and future state of Saudi Arabia’s construction industry and the challenges to be faced over the coming 12-24 months.
09:45am Panel Discussion: Impact of Saudisation on the construction industry
Saudisation and a visa crackdown have had a major impact on the construction industry, resulting in a shortage of labour and project delays. This panel will address the challenges of Saudisation in the construction sector, and whether the Kingdom can develop a local workforce with the required skills to deliver major projects? Should the industry invest in more training programs to develop their Saudi staff, or is there a need to reduce the Saudisation?
10.15am Panel Discussion: Alternative investments in Saudi infrastructure?
The government has put together an ambitious plan for the upgrade and expansion of economic and social infrastructure with a special focus on the transportation, energy and water sectors. Within this context, the private sector is expected to provide some investment through privatisation and PPP schemes. This panel will explore how alternative investments in infrastructure projects are impacting the construction industry.
10:45am Morning Break & Refreshments
11.15am Panel Discussion: The residential real estate crisis
High urban land values and the steep capital costs of additional infrastructure are a significant challenge to the delivery of affordable housing. This, coupled with the low financial returns compared to other sectors of the residential market, limited access to finance among low income households, and a lack of economies of scale due to problems with the acceptance of system building techniques combine to make the provision of sufficient numbers of affordable homes impossible. This session will explore what needs to be done to overcome the obstacles facing affordable housing development.
11:45pm Panel Discussion: Developing Saudi Arabia’s social infrastructure
Saudi Arabia needs to build 121 new hospitals and medical complexes over the next four years, as part of the Kingdom’s new healthcare plan. There is also a requirement to construct 539 new schools and 15 universities. This panel will look at how contractors can win work in this area and how to partner with international education and healthcare providers.
12:15pm Panel Discussion: Standardised FIDIC contract structures and their implementation in Saudi Arabia
Saudi Arabia had announced plans to adopt a version of the standard form FIDIC contracts, which will alleviate concerns and provide parties with greater confidence when negotiating terms on infrastructure and other state-sponsored projects. This panel will evaluate the implications of international contract structures being implemented in Saudi Arabia.
13:45pm Panel Discussion: Joint ventures and partnerships
Most contractors that engage in procurement arrangements in Saudi Arabia are still the large local companies due to a preference to deal with Saudi firms. However, international firms have increasingly edged into the market and many consortium contractors are winning large projects. This panel will look at how companies are partnering to win work, the benefits of shared risk, and how JVs and partnerships are structured to ensure success.
14:15pm Panel Discussion: Crystal ball gazing – 12 month predictions
This panel will give an overview of the subjects discussed during the day and give a picture of how the industry will develop in the coming months.
14:45pm Closing remarks from conference chairman
15:00pm End of conference
Advisory Panelists and selected Speakers:
- Dr. Mohammed AlHaj, Honorary board member, Saudi Green Building Council
- Sameer Daoud, Managing director, transport and infrastructure, Hyder Consulting
- Abdulqader Othman Amir, Board member and managing director, Shamayel Development Company
- Dr. Mohsen Shuaib, Civil and structural engineering manager, Otaishan Consulting Engineers
- Martin Weallans, Country Director- KSA, Faithful+ Gould
- John Spitz, Senior vice-president- Saudi Arabia, Hill International
- Terry Smith Director of Construction, PanNesma Co.
- Ezzat Ragab, Chief executive officer, Harrison International
- Khaled Jame, Director - Utilities, Hyder Consulting Middle East
- Dr. Khaled Sherbini, Chief executive officer, KS Bureau Consultants
- Alan Masterton, Chief asset management officer, Dar Al Arkan