Riyadh needs to award contracts

21 June 2012

Despite bids going in for several projects in Saudi Arabia, progress in awarding contracts remains slow

The submission of bids for the Saudi Health Ministry’s project to expand the King Fahad Medical City in Riyadh is the latest in several major hospital schemes that have been tendered in the kingdom in the past year.
As the kingdom’s population continues to grow at more than 2 per cent a year, building social infrastructure such as hospitals and schools is a vital aspect of Riyadh’s development plan. Despite tenders for more than $7.5bn-worth of major medical projects closing in the last 10 months, there has been very little work awarded.
In August 2011, the Interior Ministry received bids for the contract to build two medical cities, worth an estimated total of $6.7bn in Riyadh and Jeddah. Although frontrunners for the deals emerged the following month, contractors have still not been given an indication when the contracts will be signed.
In January, contractors submitted bids for the Health Ministry’s proposed $354m expansion of the King Faisal Specialist Hospital and Research Centre in Jeddah. Like the Interior Ministry scheme, contractors have been given no indication of when the contract will be awarded and work will start.
The death of Prince Nayef bin Abdulaziz al-Saud may further delay progress. The slowdown is mirrored in other areas of the kingdom’s construction sector.
Despite Saudi Arabia’s projects market growing this year, the value of construction and infrastructure contracts awarded in the first quarter was down almost 64 per cent on the same period in 2011. It is important for Saudi Arabia’s growing population and the region’s construction sector that the government is able to award contracts and ensure that planned projects reach execution.

Low bidder emerges for Riyadh medical city

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