The Saudi Arabian Interior Ministry’s recent tender for a $6bn contract to build 41 security compounds across the kingdom marks a departure from the norm for construction contracts, and a big opportunity for contractors.
After years of planning and building residential complexes and high-rise towers, Riyadh is beginning to understand that its growing population will also need safety and emergency services. Moreover, if thousands of new civil servants are expected to provide high levels of service, they are going to need state-of-the-art facilities.
Military barracks and training facilities might not be the most glamorous of construction projects, but if contractors in Saudi Arabia are following the government’s plans, they will see that civil service facilities follow homes as part of a natural progression.
Further evidence of the kingdom’s commitment to keeping its growing population safe is seen in the national budget. Riyadh announced its largest-ever budget for 2010 – $144bn compared to $126bn in 2009 – with maximum spending allocations earmarked for defence and security. In fact, 36 per cent of the 2010 budget – almost $52bn – has been set aside for security. In contrast, some of the sectors that once enjoyed significant federal investment, namely transport, communications and infrastructure, make up little more than five per cent of the current budget.
The latest initiative from the Interior Ministry could not have come at a better time for contractors in the kingdom.
If post-census population forecasts are correct and economic cities in Rabigh, Hail, Madinah and Jazan continue to grow, the kingdom is facing a desperate shortage of civil service support.
Civil infrastructure and housing represented the highest priorities in Saudi Arabia’s construction plans over the past decade, and contractors have reaped the benefit. Now is the time to shift focus and follow the trend.