Public-private partnerships (PPPs) in Kingdom of Saudi Arabia’s residential sector face hurdles in completion as certain sections of the private investor market remain hesitant to commit to housing projects unless assured of the projects’ feasibility, while contractors are unable to find workforce at low costs, an official from the kingdom’s Ministry of Housing said.
Acting manager of Makkah region’s housing department, Husain Al-Zahrani said lack of information and guarantees, as well as the distance of proposed project sites from the city, lead to an unwillingness by the private sector to collaborate with its public counterpart. Furthermore, the absence of strategies by the ministry also compounds the private sector’s reluctance.
“The risk factors are which the private sector uses to make decisions on participation in these projects,” Al-Zahrani said at a meeting organised by the real estate committee of Jeddah Chamber of Commerce and Industry (JCCI).
Al-Zahrani noted, in his presentation, that the private sector is capable of providing liquidity and employing the financial factor to increase profit and provide more job opportunities for the Saudi youth.
He added that the private sector is capable of implementing projects as long as there is no bureaucracy, which he said is an obstacle to implementation of projects and to their creative freedom as well, as per local daily The Saudi Gazette.
The public sector, he added, has the capital and is hoping for the development of the real estate sector and therefore further channels of cooperation are there for the two sectors to cooperate.
Legislations, Al-Zahrani claimed, “are the main obstacle facing the development of cooperation between the two sectors”, calling for the implementation of new guidelines and laws which are “flexible”, and “based on high standards”.
