Construction entity will be set up with local and international partners; PIF will be part of the newly created company – report
Saudi Aramco, the Kingdom’s national oil firm, plans to set up a construction company with local and international partners to build non-oil infrastructure in Saudi Arabia, sources have said.
According to a Reuters report, industry sources familiar with the plan have revealed that the Public Investment Fund (PIF) will be a part of the newly created company, which will eventually have thousands of employees.
Saudi and foreign companies have expressed an interest in the project, and will launch consortiums which will apply to take part at a later date, one of the sources added. Local companies like Nesma & Partners, Al Rashid Trading & Contracting Company, Azmeel Contracting and El Seif Engineering have welcomed the plan, the report added.
International firms like Turkey’s Tekfen and South Korea’s Posco, Daewoo and Samsung C&T have also expressed interest in the new construction venture.
The report added that the plan illustrates how the state-owned giant is involving itself in sectors beyond oil as it plays a key role in the Kingdom’s plans to diversify the economy. It is also creating a multi-billion-dollar shipbuilding complex and plans are in place to develop an industry city for energy-related businesses.
In May 2017, Saudi Aramco had signed a deal with the US-based Jacob Engineering to set up a management company for strategic construction projects in the Kingdom. The PIF is part of that deal, the report said.
Big government construction projects in Saudi Arabia have traditionally been handled by the few family-owned conglomerates such as Saudi Binladin and Saudi Oger. However, the severe slump in the industry due to the low oil prices has seen these companies downsize in recent years, the report concluded.