Holland Gulf Chamber of Commerce » infrastructuur

Kingdom implements mega projects worth SAR288bn

jochemgeheniau — Tue, 08 Oct 2013 13:39:47 +0000

Saudi Arabia is implementing mega infrastructure projects, including roads, bridges and rail projects worth $77 billion (SR288.75 billion), local media said quoting a report.
The projects currently implemented to develop roads and bridges in the GCC countries are estimated at $109 billion (SR408.75 billion), the report released by Ventures Middle East said.
Saudi Arabia captured the five biggest construction projects (contracts) in the Middle East region during August 2013.
The Saudi Electricity Company (SEC) recently awarded a $3.3 billion contract to South Korea’s Hyundai Heavy Industries to build Shaqiq power plant at the capacity of 2,640 megawatt (MW), located 580 km south of Jeddah, the report added.
Last month, the Ministry of Housing approved eight contracts worth $1 billion (SR375 billion) for the construction of housing projects in a number of cities, including Madinah, Jeddah, Dammam, Qatif, and Kharj, the report said.
Likewise, the Higher Commission for Riyadh Development (HCRD) also signed contracts valued at more than $22 billion for a Riyadh metro project, which is the biggest in the region. Contractors plan to build a 176 km long metro line in a five-year period, it said.
Plans are under way to build new petrochemical projects with their values touching $70 billion. Saudi Arabian Oil Company (Saudi Aramco), Saudi Basic Industries Corporation (SABIC) and Farabi Petrochemical Company (Farabi) will lead investments in these projects, the report said quoting petrochemical sources.
The petrochemical projects will be constructed near the oil refineries to get their required feedstock. They will be located in Jazan, Yanbu and Ras Tanura, the report said.
The Kingdom also recently kicked off major industrial and petrochemical projects in Jubail and Yanbu industrial cities with costs reaching SR327 billion.
The projects are supposed to raise the Kingdom’s share to global petrochemical market to more than 12 percent and its petrochemical products to nearly 100 million tons annually, the report said.

Feasibility studies for GCC railway project under way

jochemgeheniau — Wed, 02 Oct 2013 09:05:45 +0000

Two international firms will conduct feasibility studies for the proposed multibillion-riyal railway project that would link the six-member countries of the Gulf Cooperation Council (GCC), it was revealed at a recent meeting here of the GCC transport ministers.
Bahraini Minister of Transport Kamal bin Ahmad said the two companies would conduct technical, consultative and engineering studies. He did not specify a timetable for the start of the project.
Bin Ahmad said that Saudi Arabia and Bahrain’s ministries of finance and transport agreed to appoint the General Organization of the King Fahd Causeway as the body to choose the company that would oversee the project.
The Bahraini minister said the technical specifications for the project have been drawn up. In addition, the six Gulf states have been asked to double check the coordinates for the railway lines, junctions and stations, to ensure paying the minimum cost possible and adherence to environmental safety standards.
He said it was unlikely the project would cost $11 billion as estimated by the World Bank. “The costs are much less than what the initial studies indicated.”
Saudi Transport Minister Jabara Al-Seraisry said the six nations were focusing much attention on the project. “There is a big movement and lobbying to implement the decision of the higher council of GCC states to complete the project by 2018,” he said.
Meanwhile, Abdullah bin Jumah Al-Shalabi, assistant secretary general for economic affairs, said in a press release that the meeting also discussed marine transport issues including the safety of small and cargo ships not covered by international naval treaties, and piracy problems off the Somali coast and in the Gulf of Aden.
Meanwhile, construction is progressing on the Bridge of Love (Jisser Al-Mahabah) announced in 1999 between Bahrain and Qatar, the Bahraini minister said.

Kingdom becoming key champion of free trade and investment

jochemgeheniau — Fri, 27 Sep 2013 11:48:42 +0000

Saudi Arabia’s inclusion in the G20 reflects its growing stature as a leading global hydrocarbons producer as well as a heavyweight in the strategically important Middle East-North Africa economy.
The dual underpinnings of the Kingdom’s stature are likely to remain in place for a long time.
At the same time, rapid population growth and massive focused investments in economic diversification will further boost the size and significance of the Saudi economy.
Saudi Arabia is a highly open economy given its dependence on oil exports and a wide range of imports. It is therefore a key advocate of free trade and investment in a globalized world.
Talking about the Saudi role in G20, Jarmo T. Kotilaine, a regional analyst, said: “Saudi Arabia can raise issues of importance for the Middle East region. It will continue to play an important role in supplying and stabilizing the global oil markets.”
He said: “Saudi Arabia is heavily integrated in global trade due to its oil exports and heavy reliance on imports. This will make it a key champion of free trade and investment. Its economic resources allow Saudi Arabia to play a role in anti-cyclical stabilization as happened in the post-Lehman Brothers days.”
Most G20 members saw growth pick up momentum in the first half of this year. Kotilaine said: “The situation in Saudi Arabia has been somewhat different due to oil output cuts in the spring. This meant that the oil sector made a negative contribution to growth in the first half of the year. However, the nonoil economy has remained robust throughout at around 4.5 percent.”
Kotilaine said Saudi Arabia is somewhat unusual because of the heavy importance of the oil sector. Also, in population terms, it is a relatively small G20 country, only ahead of Australia.
Saudi Arabia is one of the best performing rapid-growth economies in the G20 Entrepreneurship Barometer 2013, thanks to laudable efforts to reform its overall business environment in recent years.
However, the favorable overall performance masks significant variation across some of the different entrepreneurship pillars.
The country’s strongest performance is within tax and regulation. There’s no doubt that Saudi Arabia provides businesses with an accommodating and streamlined tax regime.
This has been a major selling point in recent years. A number of related schemes have been set up to further help support the growth of new small businesses.
Nevertheless, other aspects of the business environment have made it difficult for a vibrant innovation-led small business sector to emerge. Saudi Arabia’s oil-focused industry has influenced how its economy has evolved. Almost half of GDP is accounted for by oil, which has reduced the impetus to push for high productivity in the nonoil economy.
The government is now working to diversify away from oil.
This will be a gradual process, but in time it should provide the underpinnings for a strengthened culture of entrepreneurship.
After a significantly strong growth in 2012 as a result of high government and consumer spending and pickup in oil output, Saudi Arabia’s GDP is expected to be 4.4 percent in 2013 due to a decline in oil output.
“The nonoil sector is forecasted to grow at a strong rate, supported by buoyant private nonoil activity, high oil revenues and corollary state spending as well as strong consumer spending growth,” Said A. Al Shaikh, group chief economist at the National Commercial Bank, commented.
He said the government is continuing to invest in the infrastructure of the economy as well as education and health care.
The International Monetary Fund (IMF) confirmed that the Kingdom has been one of the best performing G20 economies in recent years and has supported the global economy through its stabilizing role in the global oil market.
The IMF also pointed out the positive outlook of the Saudi economy which grew by 5.1 percent in 2013, benefiting from high oil prices and output, strong private sector growth, and government spending, according to a statement issued by the IMF executive board after it concluded 2013 Article IV Consultation with Saudi Arabia.
Credit growth has remained strong and the banking system is well-capitalized and profitable, with (Basle III Capital Standards) implemented in January 2013. Following an expansionary fiscal stance in 2011, government expenditure growth slowed in 2012 and the nonoil deficit began to narrow.
Consistent with the exchange rate peg, monetary policy settings have remained unchanged.
Inflation has risen over the past year to 3.8 percent in May 2013, driven by higher food prices and housing costs. High oil prices and production led to large fiscal and current account surpluses, and international reserves rose further. Looking ahead, growth is projected to slow down to 4 percent in 2013. Private sector growth is expected to be strong, but oil production is likely to be below 2012 levels while government spending growth may slow.
Inflation is expected to ease toward year-end in line with declining international food prices. With oil prices and production expected to be lower, fiscal and external surpluses, while remaining large, are projected to narrow this year.
Fahad Alturki, head of research, Jadwa Investment, said: “Very high government spending remains the main stimulus to the real economy. Also, we expect oil revenues to remain sufficiently high to maintain and support business and investor confidence.”
While recent push to raise Saudi employment in the private sector will also contribute to higher disposable income leading to demand-pull type of inflation, it is also likely to result in cost-push inflation, though there is little evidence it has done so yet, he said.
“The expected revision to Nitaqat (Saudization initiative) to take into account wages for Saudi nationals working in the private sector will also contribute to the upside risk to domestic prices,” Alturki added.

GCC traffic infrastructure projects at USD109b

jochemgeheniau — Thu, 26 Sep 2013 08:01:20 +0000

DUBAI – Ongoing roads and bridges developments across the GCC are currently valued at $109 billion according to the most recent figures from business advisory and research firm, Ventures Middle East.
The UAE, second worldwide for roads quality in the latest Travel and Tourism Competitiveness Report, has investments worth $58 billion in the pipeline for roads and bridges alone, while neighbor Saudi Arabia is undertaking infrastructural improvement projects valued at $77 billion that includes roads, bridges and rail.
As the host of the 2022 Football World Cup, Qatar leads the 2013 boom with an allocation of $20 billion for roads and highways, in addition to a $35 billion rail network. The combined share of roads and bridges projects in the UAE, Qatar, and Saudi Arabia meanwhile represents more than 75 percent of the total $109 billion pot.
Oman is securing $14.8 billion on roads, rail and bridges infrastructure in the coming few years, while the Kuwaiti budget for infrastructure works is estimated at $13 billion. Bahrain meanwhile also declared earlier in 2013 that it will spend more than $2.5 billion on major road, bridge, and tunnel networks. The figures signify good news for the hundreds of transport infrastructure service providers participating at the Gulf Traffic exhibition and conference, taking place on Dec. 9 to 11, 2013 at the Dubai International Convention and Exhibition Centre. Supported by Abu Dhabi Police and SAEED, the three-day event will bring together more than 100 exhibitors from 20 countries involved in the design, build, and maintenance of the region’s road, rail, parking and public transport projects.
Richard Pavitt, Exhibition Director for Gulf Traffic, said: “The Gulf region has been at the forefront of transport infrastructure developments for several years now, and 2013 marks another big year, where dozens of new projects have been announced across the six Gulf states.”
“Gulf Traffic will bring together industry leaders from across the globe involved in road, rail, public transport and parking industries. Suppliers will be able to showcase new trends and technologies offering cutting edge insights and industry solutions.”
Now in its tenth edition, Gulf Traffic focuses on the four key transport industry sectors including traffic infrastructure, parking, road safety, and Intelligent Transport Systems (ITS).
Organized by Informa Exhibitions, the region’s foremost transport infrastructure event is also supported by ITS Arab, with the Transport Research Laboratory (TRL) signing on as Knowledge Partner.
The show returns this year with the Gulf Traffic Conference, bringing together senior-level professionals and government officials presenting the latest on road and safety management trends and global implementations of ITS.

Saudi ports’ revenues exceed SAR4 bn

jochemgeheniau — Wed, 25 Sep 2013 07:40:25 +0000

Profits for the General Organization for Ports in the past fiscal year 1433/1434H exceeded SR4 billion, representing an increase of SR800 million from the previous fiscal year. Meanwhile, the container sector has witnessed an increase in the capacity of ports, from 5 million TEUs in 2008 to 12 million TEUs in 2012.
A report of the General Organization for Ports stated that the absorptive capacity of the Saudi ports increased significantly during the year 2012 to 470 million tons, representing an increase of 60 million tons from 2011. The number of sea docks also increased to 208, while the quantities of handled goods amounted to more than 171 million tons. This represents an increase of 4 percent from the 165 tons in 2011. The number of handling containers at the ports increased by 7 percent, amounting to an increase of more than 1.8 containers to a current capacity of 6.1 million TEUs.
The report pointed out that the value of the financial investment spent on the implementation of projects in the ports during the last fiscal year exceeded SR2 billion, with the completion of the implementation of 25 projects at a total cost of more than SR2.7 billion.
The report estimated the budget of the foundation for the fiscal year 1434-1435H at about SR1.89 billion.
Funding will be spent on the implementation of projects valued at more than SR4 billion. A sum of SR1.80 billion has been allocated for the implementation of new projects in 9 ports.
The new projects include the construction of new piers, expansion and deepening of the basin, and paving of yards in Ras Al-Khair port. About SR70 million will be allocated for the establishment of a power plant and the development of infrastructure at the Yanbu Commercial Port.
New projects also include securing new equipment, the development of the sewerage network, and the establishment of parks and development facilities in the King Fahd Industrial Port in Yanbu. Emphasis will be on developing the sidewalks and the sewage network in Jubail Commercial Port, in addition to the implementation of projects to renovate sidewalks and upgrading the facilities at Jeddah Islamic Port.
A new security system and improved services will also take effect at King Fahd industrial complex. These projects are in addition to a number of other projects to be implemented in many other ports. According to the report, the private sector pumped SR28 billion worth of investments in Saudi ports.
The Saudi ports are considered leading ports, regionally internationally, thanks to the support and strength of the national economy, which enjoys a wide international confidence. As Saudi ports extend along the coastline of the Red Sea and the Arabian Gulf, they enjoy the advantage of an attractive environment for investments, both national and foreign.

Call for linking of industrial cities with rail networks, gas pipelines

jochemgeheniau — Thu, 19 Sep 2013 08:13:51 +0000

The Council of Saudi Chambers of Commerce and Industry (CSCCI) has urged the Ministry of Commerce and Industry to link industrial cities with gas lines and rail networks in the Kingdom.
Members of the CSC made their request during a meeting with Walid Abu-Khalid, undersecretary to the Ministry of Commerce and Industry , in Riyadh last week.
Saad Al-Moajil, chairman of the national industrial committee at the Council of Saudi Chambers, led the CSC team of businessmen.
Al-Moajil said that such a link would boost the production rate of industrial cities. He added that such a move could promote the sector and offer affordable energy substitutes. In addition, he said it could reduce costs, support national factories and further ensure local products’ access to foreign markets.
Al-Moajil commenced the meeting by highlighting the positive cooperation maintained by the CSC and the ministry to promote trade and commerce in the Kingdom. He said fruitful cooperation would boost investor confidence and stimulate trade in the Kingdom.
Some of the other concerns raised by industrialists included issues such as the continued increase in land rent, as well as abrupt fines enforced on them by the Saudi Industrial Property Authority (MODON) with no prior notice. They also requested a fair representation of industrialists within MODON’s board of directors for a better understanding in matters concerning the sector.
Abu Khalid assured the ministry’s readiness to assist with industrial affairs. He emphasized that the ministry would continue supporting the council’s government procurement department in its efforts to activate the decision concerning granting priority to national products in projects implemented by the government.

‘Public spend drive to lead Qatar construction boom’

jochemgeheniau — Sat, 14 Sep 2013 07:59:17 +0000

Despite concerns about long lead-times for many of the planned projects across the country and the potential for rising construction costs, Business Monitor International (BMI) has maintained an “overall bullish” outlook for Qatar’s construction sector.
“A strong commitment to public spending coupled with the most attractive and stable business environment in the region will help Qatar in achieving its ambitious infrastructure development targets to facilitate the 2022 FIFA World Cup and its own 2030 Vision,” BMI said in a recent report.
BMI’s country risk team believes that “Qatar’s economic growth will remain underpinned by the non-hydrocarbons sector over the coming quarters, with robust household consumption and construction activity making up for an ongoing stabilisation in hydrocarbons production.”
The country’s fiscal policy is set to remain strongly supportive of the economy: the government has signalled its intention to ratchet up both current spending and investment expenditure over 2013-14 fiscal.
BMI expects Qatar’s overall real GDP to grow by 5% in 2013 and 4.8% in 2014. In light of this outlook and as progress on many of the major projects is finally being made, it has revised upwards its forecast for the years leading up to the 2022 World Cup.
Average real growth for Qatar over BMI’s 2013-22 forecast period now stands at 8% a year.
Ahead of the 2022 World Cup, and in line with the country’s 2030 development plan, Qatar’s spending on infrastructure is expected to reach around $150bn over the next decade, the report said.
A series of infrastructure projects are in the pipeline, including a $1bn transport corridor project in Doha; a $20bn investment in roads; $40bn plan for railways; $15.5bn new airport project; $4bn for stadiums; $8bn to be spent on a deep-water seaport; tens of thousands of hotel rooms to be built; and even a new city.
For 2013, the Qatari government has initiated a major infrastructure upgrade of the road network in the country, which as BMI said, has begun to result in a sharp increase in contracts being awarded.
For example, it said construction supervision contracts for the $4.1bn Doha Expressway were awarded in April and for the $5bn Doha Bay Crossing in May. The country is believed to have one of the busiest road markets in GCC to date, with contacts awarded so far being valued in excess of $1.8bn.
This year, the government will be inviting bids from firms for the construction of a solar power plant in the country. The plant whose construction may commence in 2014, may cost $10bn-$20bn, and will have a generation capacity of 1,800 MW. It is likely to be completed by 2018. Meanwhile, plans are also underway for the launch of a tender for a 220 MW solar energy project this year.
Supporting BMI’s long-held view about increase in tourism-related investment, the Qatar Tourism Authority, in March 2013 indicated plans to invest $20bn on the country’s tourism infrastructure. Qatar is looking to build as many as 22 new hotels (before 2017), with a total capacity of 45,000 rooms. It is expected that as many as 60,000 rooms will be required during the world cup.

Over 1,300-kms of major new road projects under study

jochemgeheniau — Thu, 12 Sep 2013 14:17:04 +0000

Muscat: The Sultanate’s Ministry of Transport and Communications is conducting studies to build major roads as well as dualisation work of existing roads with a total length of over 1,300 kilometres in different parts of the country.
These roads include a 200km-long new road between Al Mazyunah and Sheit, 150-km-Metan-Al Hashman-Al Shasr road, 715-km-long dualisation programme for Nizwa-Thumrait road, upgradation of 40km-long Sohar-Wadi Hibi road, 76km-long Al Buraimy-Safwan-Al Rawdah road, 39km-long-dualisation of Nizwa-Bahla road as well as dualisation of 33km-long-Ibri-Yankul road. Tenders for selecting contractors for building these roads are expected to be floated in the coming months.
Delivering the keynote address at the Oman Land Transport Infrastructure Summit here yesterday, Eng Muhammed Aref Abu Zaki, Road Design Expert at the Ministry of Transport and Communications, said that dualisation of Nizwa-Bahla road is a continuation work from Muscat. He also noted that the dualisation work of Nizwa-Thumrait road will have challenges as it requires a lot of interchanges.
Further, studies for building major road projects with a total length of 424 kms have been completed by the end of June 2013. These include part one and two of 186-km-long Batinah Expressway, part three of Batinah Expressway for 86 kms, dualisation of 87-km-long Bidbid-Sur road and the 65-km-long Diba-Lima Khasab road, said Eng Abu Zaki.
Oman is set to build its first design-build-operate road project -Diba-Lima-Khasab road in Musandam. A study for the 65 kilometre-long road, which will be developed on a 20 year concession with a private operator, has already been completed and a tender for pre-qualification of companies has been floated.
“It is a strategic route, once it is completed. Lima, which is a coastal town, is a tourist attraction,” added Abu Zaki.
He said ten major new roads or dualisation/rehabilitation works are currently under construction, which has a combined length of 647 kilometres. These include 133-km-long Nizwa-Thumrait road (phase four, part 2), 90-km-long Jabreen-Ibri road, and 50-km-long Izz-Adam road.

Muscat pushes on transport upgrade

jochemgeheniau — Mon, 09 Sep 2013 10:58:46 +0000

Despite a new wave of transport infrastructure schemes, Oman still lags behind neighbouring GCC states

Oman has taken significant steps towards developing its transport network, which will include a national railway and the country’s first dual four-lane motorway. But Muscat still has some catching up to do compared with the more advanced transport projects in the rest of the GCC.

The UAE is close to finishing its first phase of a national railway, while Saudi Arabia and Qatar have awarded billions of dollars-worth of construction contracts in recent months.

In contrast, Oman’s plans to build a national railway stalled midway through last year after it was decided the project would be retendered. The scheme is now gathering pace again. Consultants submitted bids for the project management contract on 26 August and earlier in the month Italy’s Italferr won the $37.3m contract for the preliminary design work.

There has also been a spate of road contracts awarded in recent weeks. In August, packages five and six of the $2.6bn, 260-kilometre Batinah Expressway scheme were both awarded. The four-lane road will connect Sohar, Muscat and the UAE and help speed up the transportation of goods from Oman’s expanding ports and airports around the region.

The Muscat government also announced plans to build a new logistics centre in the Batinah South region, designed to help support the growing traffic at Sohar Port.

The new impetus driving Oman’s transport projects will help the country realise its ambitions of becoming a major trade and transport hub for both interregional and Asia-Africa trade. However, Muscat will need to maintain, if not increase, this level of momentum to compete with the rest of the GCC effectively.

Saudi Arabia’s economic growth in overdrive

jochemgeheniau — Wed, 28 Aug 2013 10:40:16 +0000

JEDDAH – As a significant volume of new prime office space starts to enter the Riyadh market, particularly at King Abdullah Financial District (KAFD), and the overall occupancy rate starts to rise, rental rates in general have started to edge downwards and incentives have started to become more widespread, according to the latest Saudi Arabia MarketView by CBRE, the global real estate consultancy firm.

“Headline rents offered at KAFD are high in comparison to existing market norms, but terms are flexible and there is room for negotiation on incentives. In the existing prime office areas in the southern central areas, office rental rates are starting to come under downward pressure and new supply in these areas is forcing both lower headline rents and more generous incentive packages,” said Mike Williams, Head of Research & Consultancy, CBRE Middle East.

In contrast to both these areas a number of business park projects that have recently emerged in northern Riyadh such as Granada Business Park, ITCC and Riyadh Business Gate have proved extremely popular, notes the CBRE report.

“All three of these projects are either fully occupied or nearing full occupancy at strong rates and without significant support from incentive packages. These projects have successfully met market requirements by providing good access, parking and quality as well as being located in the northern parts of Riyadh that are attracting increasing interest,” added Williams.
The CBRE report said the supply of prime office space in Jeddah looks set to jump with the completion of The Headquarters Business Park in the second half of 2013, but growth in demand largely driven by government expenditure on infrastructure will likely moderate the threat of oversupply. Rental rates in Jeddah remained static in the first half of 2013 despite a slight drop in vacancy rates during the same period
“International firms engaged in implementing government infrastructure projects will likely absorb much of the new and existing space, and there is likely to be a relatively balanced environment where neither supply or demand move significantly out of line,” commented Williams.

Moreover, the report said overall levels of economic activity in Al-Khobar have historically been driven largely by Saudi Aramco, augmented by family firms and small branches of international or regional consultancies. Saudi Aramco has embarked on a transformation program to become the world’s leading integrated energy and chemical company by 2020.
In addition, the growth of the industrial city of Jubail has also driven the office market in Al-Khobar as engineering firms enter the market in order to serve the three main drivers for economic growth in Eastern Province which are Saudi Aramco, Jubail Industrial City and Saudi government infrastructure initiatives.

“As it relates to office space, supply, demand, quality and rental rates have all risen consistently since 2000 and there have been no reverses in any of these categories for over a decade. Rental rates in existing properties have remained virtually static since 2008, however, rental rates for local Class A space have risen, due largely to improvement in the quality of local Class A space entering the market,” added Williams.
“Rental rates for space that would be considered local Class A space now lie in quite a broad range from around SR800/m²/pa to SR1,300/m²/pa with the most recently completed buildings commanding the highest rents,” Williams noted.