Saudi Arabia’s General Authority for Civil Aviation’s (Gaca) airport projects have generated considerable interest among the region’s construction companies. On 3 June, 17 groups submitted bids for the contract to build Jizan airport in the southwest of the kingdom, close to the Yemeni border.
A local consortium of the Saudi Lebanese Modern Construction Company (Salmoc), Safari and Al-Subaie submitted the low bid of SR2.57bn ($685m), which was 7 per cent less than the SR2.76bn price submitted by the second-lowest bidder, Saudi Pan Kingdom Company. Another four prices were below SR3bn.
The Jizan tender was attractive to contractors for several reasons. The airport will be built on a greenfield site and involves significant volumes of concrete, which means a contractor should be able to get on site quickly and start work without the hassle of dealing with existing services and infrastructure.
The project is also being built in an area where, unlike the Eastern Province, contractors expect to find local Saudi nationals who are prepared to work. This is particularly advantageous because local firms can hit their Saudisation quotas while working on the job, allowing them to employ more expatriates on projects elsewhere in the kingdom.
Perhaps most importantly, the scheme is the first in a series of airport projects that Gaca will develop across the kingdom in locations such as Al-Baha, Qassim, Al-Jouf and Abha. This means that even if bidders are unsuccessful at Jizan, they will get another chance to use the valuable market and risk information gained during the pricing process to win work in the future.