Holland Gulf Chamber of Commerce » Construction

Construction market to hit SAR1.12 trn by 2015

jochemgeheniau — Thu, 09 Jan 2014 08:43:56 +0000

The volume of Saudi Arabia’s booming construction and contracting market is expected to hit $300 billion (SR1.12 trillion) by 2015, said Fahd bin Mohammed Al-Hammadi, chairman of the National Contractors Committee at the Council of Saudi Chambers.
“Construction is the Kingdom’s second largest economic sector after oil,” he said. In 2012, the sector contributed 16.5 percent of the gross domestic product compared to the private sector growth of 11.5 percent and GDP growth of 8.6 percent in current prices, he explained.
The construction sector’s total assets are valued at SR200 billion while the value of government contracts awarded in 2013 amounted to nearly SR157 billion. “We don’t have the correct figure of disrupted government projects,” he said. “We have to differentiate between delayed and disrupted projects,” he pointed out.
From the beginning of 2013 to its third quarter, the Finance Ministry sanctioned 1,855 contracts worth SR120.24 billion. “They included 627 contracts for operation, maintenance and cleaning with a total value of SR24.45 billion.”
Al-Hammadi said government contracts account for 65 percent of the sector’s activities. The number of registered contractors in the Kingdom reached about 115,000 by the end of 2013, which is 41 percent less than the figure of 2010 when it was 280,000. Among them 3,052 are classified contractors.
Firms licensed to provide contracting and maintenance services reached 3,487, which account for 77 percent of investment licenses in the Kingdom.
“The contracting sector is one of the important economic sectors in the country,” Al-Hammadi said. He expected the private sector’s contribution to nonoil GDP at 58.75 in 2013 while estimating actual growth in the sector at 8.11 percent.
About 34 percent of firms registered with the General Organization for Social Insurance are from the contracting sector with total participants reaching more than 2.17 million (40.1 percent of the total). The number of Saudis working in the sector has increased to 193,785. “There are about 300 job titles in the sector,” Al-Hammadi said.
Fawaz Al-Khodary, deputy chairman of the committee, said the construction sector was facing a lot of problems and emphasized the need for an authority to strengthen the sector. “We also need specialized centers to train workers required for the sector and a research center to conduct studies on better implementation of projects.”
Saleh Al-Habdan, chairman of the contractors committee at the Riyadh Chamber of Commerce and Industry, said they have 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.

UAE rail to link to GCC network

jochemgeheniau — Mon, 06 Jan 2014 10:10:26 +0000

Abu Dhabi: Completion of the UAE railway by 2018 can only bring more prosperity not only to the UAE but also the country’s five GCC neighbours as rail lines are constructed across the region, said Etihad Rail .

The UAE railway will connect with the sources of raw materials, industrial areas, ports and major population centres, says Etihad Rail , and will be built in three phases, the first of which will be a 266km-long western stretch between Al Ruwais and Shah. The Shah-Habshan-Ruwais freight line is being built in collaboration with Abu Dhabi National Oil Company (Adnoc).

The 2,177-km-long GCC rail network, which will link all six Gulf states by rail for the first time — providing an alternative to air or sea travel for both goods and passengers in the region — will be fully operational in 2018, said Dr Ramiz Al Assar, World Bank resident adviser of the GCC Secretariat General in Riyadh, in October.

“The designs of the nearly $200 billion (Dh734 billion) network, which will run down the Gulf coast from Kuwait, through Saudi Arabia, to the UAE and Oman, with branches linking Bahrain and Qatar, will be completed by the end of this year or in the first quarter of next year. Construction on the network is to start in 2014-15 and it will be fully operational in 2018,” Dr Al Assar told the Mena Rail and Metro Summit, being held in Abu Dhabi.

Abu Dhabi is leading the GCC rail network with its Dh40 billion Etihad Rail project. The 1,200-km line, planned to be completed in 2018, will link major industrial zones, cities and ports in the UAE, and will eventually connect with the GCC railway.

In October 2011, Etihad Rail signed an agreement with Adnoc to transport about seven million tonnes of granulated sulphur a year from Habshan and Shah to Al Ruwais in Abu Dhabi for export.

The second phase will connect Abu Dhabi with Dubai. It will also provide links to Jebel Ali port, Mussaffah and Khalifa port. The third phase will be the extension to link the northern emirates. The second phase is expected to be completed by 2016 and the third phase by 2017.

The Etihad Rail network will also connect with the GCC network and this — once fully established — will cover Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

Cement industry in KSA, Kuwait set to flourish

jochemgeheniau — Wed, 27 Nov 2013 12:44:58 +0000

The cement industry in Saudi Arabia and Kuwait is expected to flourish due to the current construction boom in GCC region where the total value of projects planned or underway is estimated at $2.3 trillion, according to Kuwait Finance House ( KFH ).
The weekly economic report of KFH , also known as Baitak, said government support has been a key factor driving growth in regional construction and cement sectors.
Most GCC countries have allocated large portions of their respective budgets for construction activities.
For the 2013-14 fiscal period, GCC’s aggregate budget expenditure stood over $400 billion.
Of this, substantial allocations have been made to the education, health and infrastructure segments. Saudi Arabia has allocated almost a quarter of its total budget on education and increased spending on Infrastructure and transportation by around 16 percent year-on-year, the report cited by the Kuwait News Agency said.
It said Kuwait cement accounts for roughly 10 percent of GCC construction materials distribution market. In previous years, demand had slowed down as a result of postponement or delay in major infrastructure projects.
In addition, weak business environment further slowed down the industrial expansion, it said.
Kuwait, however, is also in line to join the current construction boom in the GCC, with projects worth of $188 billion already underway.
The Kuwaiti government has been showing adequate support for infrastructural development.
Some major projects underway in the nation include Kuwait City’s $7 billion on going metro project, which is expected to be completed by 2020 and the $3.3 billion Kuwait International Airport (KIA) terminal which is expected to open in September 2016, the KFH report stated.
Kuwait also plans to invest around $6.2 billion in a series of motorway construction projects with an approximate length of 550km by 2015.
At the same time, the other major developments include $2.6 billion Subiya causeway, a 37.5km bridge crossing Kuwait Bay, linking Kuwait City, Subiya peninsula and Boubyan Island.
Also, Kuwait has over $5 billion university building projects either in planning stage or under construction.
With such robust infrastructure spending plans, demand for cement is expected to pick up in near future, it said.
The Saudi cement industry is one of the established sectors in the Kingdom.
The industry is benefiting from massive investments currently underway in the Kingdom as the country bids to channel its oil revenues to build its infrastructure and strengthen the nonoil sector.
As a consequence, the government has initiated plans to execute projects, worth around $700 billion, across the Kingdom over the next 20 years.
Nearly half of the government investments are set aside for real estate and housing schemes in order to facilitate improved living standards for its citizens, the report said.

KSA construction valued USD495bn

jochemgeheniau — Wed, 20 Nov 2013 09:32:38 +0000

The Saudi construction market, the most valuable market in the GCC at present, is valued at $495 billion, including projects currently under way and those confirmed and in pre-execution stage.
Local companies, including Saudi Basic Industries Corporation (SABIC), Saudi Pipes Company and Saudi Export Development Authority, will be taking advantage of the opportunity to showcase the latest innovations and technologies to the regional and international audience at the Big 5 2013.
“The construction industry in Saudi Arabia has been one of increasing significance for several years,” said Andy White, group event director of the Big 5. “We see interest from Saudi companies looking to highlight local market expertise and experience, as well as interest in Saudi market opportunities and expanding business in the Kingdom. This has been a country whose presence has grown year-on-year at the event, and as the highest recipient of FDI in the region over the past 20 years, and with six economic cities, transport, power and oil and gas facilities currently under construction, we expect this trend will continue.”
The Big 5 will take place from Nov. 25-28 at the Dubai World Trade Centre, Dubai, with Middle East Concrete and PMV Live, showcasing the latest from the concrete, plant, machinery and vehicle industries.

Saudi construction sector poised for growth

jochemgeheniau — Fri, 15 Nov 2013 09:04:41 +0000

RIYADH – With the recent announcement of the Saudi government to allocate a social benefit package of SR 487.5 billion for the development of housing, infrastructure and transport in the Kingdom, the construction sector is set to see a surge driven by increasing private and public investments. The government has earmarked a total of SR 247.5 billion for housing development and SR 61.875 billion for transport expansion while an estimated SR 7.5 billion has been allocated to road projects under construction. Moreover, the General Authority of the Civil Aviation of Saudi Arabia has set aside a fund of SR2497.5 million for construction of 34 airports across the Kingdom in the next five years and a budget of SR101.25 billion has been approved for the rail projects that are either underway or at the bidding phase.
Celebrating its silver jubilee as the region’s premier construction show, Saudi Build 2013 – the 25th international construction technology and building materials trade exhibition – will be a perfect gateway to explore the lucrative Saudi construction sector as the exhibitors display latest technologies, machineries and equipment as well as offer complete business solutions to real estate agents, contractors and developers. The 25th edition of Saudi Arabia’s largest business-to-business construction fair will run from Nov. 4-7, 2013, at the Riyadh International Convention and Exhibition Centre.
Zeyad Al Rukban, Deputy General Manager, Riyadh Exhibitions Company, the organizers of Saudi Build, said “since its inception a quarter of a century ago, Saudi Build has been the foremost construction show in the region offering a platform to both exhibitors and visitors to leverage business opportunities in the region. The 2013 edition will proudly mark 25 years of continuous success of the show along with the record growth achieved during the recent years. This year’s event promises to be a special celebration as Saudi Build continues to enjoy a strong local, regional and global following, attracting high-profile personalities, decision makers, trade missions and key government officials from all over the world.”
Saudi Build 2013 will witness strong local and foreign participation from 28 countries. It is the only construction trade show in Saudi Arabia accredited by UFI, the Global Association of the Exhibition Industry.
Supported by diamond sponsor Rajhi Steel, Saudi Build 2013 will showcase the latest products and services related to Building Materials and Equipment, Architectural Finishing Products, Stone, Marble and Granite Products, Construction Tools and Technology, Engineering Services, Infrastructure Materials, and Security and Safety Systems, among others.
Saudi Build 2013 will host two concurrent events: Saudi Build PMV 2013 – The 3rd International Exhibition for Construction Equipment, Plant, Machinery and Vehicle; and Saudi Stone-Tech – The 15th International Stone and Stone Technology & Machinery Exhibition.

Makkah-Riyadh link road to be ready in a year

jochemgeheniau — Thu, 14 Nov 2013 09:14:01 +0000

The contractor responsible for implementing the Taif-Makkah-Riyadh road link has said that the project would take a year to complete.
Ahmad Abdul Ghafoor, the engineer in charge of the project, said: “We are still in the early stages. The first part of the work involves laying down an 8-km section of the road. We have completed the surveying part of the work. Some technical matters need to be resolved, and we will then be able to move on to asphalting the section. This part of the road includes a number of culverts that need to be built, so we expect to complete the project within a year.”
“We were also given orders to construct a bridge at the intersection of Al-Urafa Road with Riyadh Road. We have completed the base and cement columns. The bridge work will be completed within five months at a cost of SR75 million,” he said.
Omar Al-Hussaini, director of the Taif Transport Department, said this road is considered “vital to the area.”
“Its completion will help reduce the distance for motorists driving along the Riyadh-Taif road leading to Makkah. This will be very helpful, especially for those who want to visit the Grand Mosque. It will also solve the problem of traffic jams in Taif. There are lanes marked for big trucks. The remaining section is 24 km long and there will be four lanes on each side,” he said.
“This project was not accounted for in earlier ministry budgets. We are now giving it top priority and it will be included in the next budget. The money needed for the project will be allocated and will be awarded to a specialized company for implementation,” he said.

SAR581bn for solar power projects

jochemgeheniau — Wed, 13 Nov 2013 08:59:48 +0000

The Gulf Cooperation Council (GCC) countries are set to invest $155 billion (SR581.25 billion) for the construction of energy generating plants from non-traditional sources, notably solar energy, local media reported quoting a specialized energy report.
However, the drive of energy firms from the private sector to renewable energy projects is still under the required level while the government-owned companies have big capitals to invest in this type of activity, which sometimes falls within “sovereign decisions,” the report, released by Abu Dhabi-based Crescent Petroleum, said.
Availability of funding ways to develop energy sources is among the major challenges facing both public and private sector companies in this regard, the report said.
In particular, the private sector firms bear the brunt of challenges to get the required funding and, if attained, could give them the ability to participate in energy decision-making processes and acquire an increasing share of investments, the report said.
The report said both the public and private sector companies had to jointly consider the possibility of going into joint stock companies, which would bring positive results at the level of companies, new stockholders, financial markets and the energy sector as well.
This tendency is hoped to provide financial flows at reduced costs with a view to boosting long-term investment activities, the report said. Accordingly, the step will allow (GCC) governments direct spending to activate and promote other productive sectors at the least costs with high efficiency, it added.
The report emphasized the growing tendency toward the IPO (initial public offering) for energy firms in light of inability of the current financial regulations and legislations to directly fund the expansion of energy projects, notably the establishment of a regional oil exchange market.
Experts say the six GCC countries have already envisioned solar installation projects which will generate more than 84 GW of power when complete in a three-year period.
Saudi Arabia, in particular, hopes to double its installed electricity capacity by building 54 GW of renewable energy by 2032, of which 41 GW will be obtained from the sun. Abu Dhabi also seeks to generate 7 percent of its electricity from renewable sources by 2020.

SR25b spent on holy sites in 16 years

jochemgeheniau — Tue, 10 Sep 2013 07:44:48 +0000

Over the past 16 years, the government has spent a total of SR25 billion on developing the holy sites, Dr. Habib Zain Al-Abideen, undersecretary in the Ministry of Municipal and Rural Affairs, has said. The implementation of all projects was smooth, he said. Mina has not seen any fire accidents for 16 years while the Jamarat Bridge has not witnessed any stampede for eight years thanks to the strong infrastructure, he said.