Emirates Business quoted UAE contracting companies making inroads into Saudi Arabia as saying that the country holds the potential to become the biggest market for construction in the GCC in the next 3 years to 4 years.
The firms said that though both civil and infrastructure projects are important because of the size of the country, infrastructure holds a bigger potential. However, it is important to understand that setting up business in Saudi Arabia takes longer than in the UAE.
Mr Ziad Makhzoumi CFO of Arabtec Holding said that "Saudi Arabia is building for its own people and not to attract foreign investment. Hence, it is investing in infrastructure. We are targeting both sectors."
Mr Makhzoumi said that "Saudi Arabia has very attractive economic dynamics because of its size and our partnership in the market. We also had a more investment oriented approach towards our resources, equipment and assets which were becoming idle when projects in Dubai were completed, reduced or put on hold post crisis. We did move some of our resources to Abu Dhabi and then to Qatar.”
He said that "The next logical decision was to move to Saudi Arabia. The Saudi construction market will be in billions of dollars. In 3 years to 4 years' time, Saudi Arabia will be the biggest market for Arabtec in the GCC countries."
According to Mr Saleh Muradweij EDof Civil, Drake and Scull International, the value of current ongoing jobs in the country is about USD 100 billion. The company is actively increasing its presence in Saudi Arabia.
Mr Muradweij said that "The budget for the construction industry was set before the crisis. It was King Abdullah's commitment to go ahead with the planned construction, without letting the crisis affect the progress. Earlier when the oil prices hit bottom, there was fear that certain projects could be affected. But now that oil is gaining currency, they are keen on releasing what has been scheduled for this time of the year."
He said that "Infrastructure projects comprise about 60% to 70% of the total budget allocated. In Saudi Arabia, we have grown dramatically over the past one and a half year. Today, we are geared to take up multi billion riyals worth of projects in the industrial, water and power fields. Drake and Scull, GTCC and IWP together are working on projects valued at about SAR 2 billion."
He added that project types include district cooling facilities, power stations and water treatment plants. These projects require more engineering rather than resourcing. So we are capable of taking up huge jobs wherein procurement and engineering can be done out of the Dubai office. Then we sub contract most of the operational part of the job to the local market.
(Sourced from Emirates Business)
