Volume of KSA construction market to hit $300bn by 2015
Chairman of National Contractors Committee says sector is Kingdom’s second largest economic sector after oil
The volume of Saudi Arabia’s construction and contractor market is expected hit $300 billion by 2015, the chairman of the National Contractors Committee has said.
Fahd bin Mohammed Al-Hammadi told the Council of Saudi Chambers that construction was the Kingdom’s second largest economic sector after oil. In 2012, the sector contributed 16.5% of the gross domestic product compared to the private sector growth of 11.5% and GDP growth of 8.6% in current prices, he explained.
According to an Arab News report, the construction sector’s total assets are valued at $53.32 billion while the value of government contracts awarded in 2013 amounted to nearly $41.86 billion.
“We don’t have the correct figure of disrupted government projects,” Al-Hammadi said. “We have to differentiate between delayed and disrupted projects.”
Since the beginning of 2013 to its third quarter, the Finance Ministry sanctioned 1,855 contracts worth $32.06 billion, he added.
“They included 627 contracts for operation, maintenance and cleaning with a total value of $6.46 billion.”
Al-Hammadi pointed out that government contracts accounted for 65% of the sector’s activities. The number of registered contractors in the Kingdom reached 115,000 by the end of 2013, the report said. This figure is 41% less than the figure reached in 2010, when it was 280,000. Amongst them, 3,052 are classified contractors.
The firms licensed to provide contracting and maintenance services reached 3,487, which accounted for 77% of investment licenses in the Kingdom.
“The contracting sector is one of the important economic sectors in the country,” Al-Hammadi said. He said that he expected the private sector’s contribution to nonoil GDP to stand at 58.75% in 2013 while estimating actual growth in the sector at 8.11%.
Around 34% of firms registered with the General Organisation for Social Insurance are from the contracting sector, with total participants reaching more than 2.17 million, or 40.1% of the total.
Meanwhile, the number of Saudis working in the sector has increased to 193,785, he said.
“There are about 300 job titles in the sector,” he added.
However, Fawaz Al Khodary, deputy chairman of the committee, said that the construction sector was facing a lot of problems and that there was a need for a government authority to strengthen the sector.
“We also need specialised centres to train workers required fort the sector and a research centre to conduct studies on better implementation of projects,” he added.
Saleh Al-Habdan, chairman of the contractors committee at the Riyadh Chamber of Commerce and Industry, said that they had presented proposals to resolve the problems facing the sector.
This included setting up of a fund to finance contracting companies and sanctioning of more visas to recruit skilled foreign workers, he explained.
