King Abdullah offers opportunity for region's contractors

01 September 2010

As King Abdullah announces plans to invest $385bn in helping to stimulate the economy and develop infrastructure, it will not just be Saudi nationals taking an interest in the progress of the Ninth five-year development plan. Many in the region’s construction sector will be paying close attention to the kingdom’s progress over the next five years.

The Saudi King is investing $385bn in an effort to increase growth and catch up on 30 years of underinvestment in infrastructure development. The kingdom is facing a number of looming social problems. A serious housing deficit, shortage of skilled labour and outdated social infrastructure are some of the main issues that the spending plan seeks to address.

Despite some reservations from economists about the growth figures projected in the plan, the world’s largest oil producer will not struggle to bankroll the scheme. The real crux of the Ninth Development Plan will be whether the kingdom’s public sector is capable of delivering the projects it has budgeted for. Previous spending programmes have often been hampered by bureaucratic administration and inefficient project management and implementation.

The success of the planned development programme will not only be of importance to the kingdom’s growing population, but also to the region’s construction sector. The implementation of the proposed plan will result in a raft of construction projects and much needed work for the region’s already hungry contractors.

Construction companies will be keen to see King Abdullah’s proposed infrastructure development plans come to fruition. But the bumper development plan does not signal a fast buck for international companies. Saudi Arabia is a notoriously difficult market for foreign companies to enter, and so far one that few major international contractors have been able to penetrate.

If King Abdullah is to proceed with what is planned, the state will require outside assistance. The success of the plan depends on the ability of the kingdom and international companies to work together.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications