Saudi contractors fight to keep up with bid deadlines

20 July 2010

Bid deadlines slip on Saudi projects as contractors struggle to keep up with booming market

When Saudi Arabia’s Interior Ministry launched the tender for its largest ever construction contract, it caused a flurry of activity among contractors in the kingdom.

The SR22bn ($6bn) contract had great potential for local contractors, with a government ministry that controls 31 per cent of the national budget as the client. Less reassuring was the timeline. The original deadline for tender submissions was 26 July – directly in the middle of the Saudi summer and a time when business across the kingdom slows down.

It also gave contractors little time to prepare submissions for the complex project, which even the ministry has not decided whether it will award as a single package or multiple smaller ones.

Contractors now have until 24 August to bid on the project. Several schemes are being forced to push out tender deadlines as contractors struggle to keep up with the volume of work planned and under way in the kingdom.

For example, two Jeddah-based private developers delayed until the end of the summer bid deadlines for the estimated $533m Al-Mada Towers and the $373m Ewaan al-Farida project.

The Saudi Education Ministry has also postponed until August a $150m award for a hospital at Najran University.

By delaying deadlines, sponsors hope they will get more bids and run a more competitive process. For contractors, the long hot summer offers little reprieve.

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