The tendering of the $4bn fourth phase of the Interior Ministry’s security networks programme is a fresh sign that Saudi Arabia is strengthening its position as the region’s construction hub.
With billions of dollars worth of construction and infrastructure schemes in the pipeline, the challenge for Riyadh will be delivering on what it has planned.
As much of the region’s construction activity came to a halt during the political unrest that has swept through the region, Saudi Arabia has continued to tender large construction schemes. Even during the normally quiet period of Ramadan, projects were being put out for tender and bids submitted.
The test for the state clients will be awarding contracts and delivering what is planned
The kingdom’s rapidly growing population is forcing Riyadh to keep investing in large construction schemes. The Interior Ministry, the client for the security compound schemes, has to date tendered more than $13bn worth of construction projects in 2011 and is becoming a major client in the kingdom.
With Saudi Arabia having increased its oil production to more than 9 million barrels a day to compensate for shortfalls elsewhere during the regional political unrest, the kingdom has plenty of money to invest into its ambitious infrastructure development programme.
The test for the state clients will be awarding contracts and delivering what is planned within the required timeline. This is something that the government has struggled with in the past. Out of the nearly $10bn-worth of construction projects that the Interior Ministry tendered earlier in the year, there have been no contract awards as yet.
The tendering of the government construction schemes is encouraging for the country’s development plans and the region’s construction firms, but the biggest challenge of delivery has yet to come.