INTERVIEW | Saudi contractors eye lion's share of sport stadiums contracts
Saudi contractors could secure a significant number of contracts under a project to build 11 new sport stadiums in the kingdom if Saudi Aramco offers them in smaller parcels, said Fahd Al-Hammadi, chairman of the National Committee for Contractors at the Council of Saudi Chambers.
Oil-giant Saudi Aramco, which is managing the project, has not disclosed costs of the 11 stadiums but has said they would have a seating capacity of 45,000 people each and must be completed within two years after they are launched in early 2015.
Hammadi told Zawya in an interview that he expected the cost to reach more than
SAR 20 billion (USD 5.33 billion) and that the projects would boost demand for construction material by around 30%.
He also reiterated calls for the establishment of a government authority to tackle problems facing the local contracting sector, which has been impacted by new labor regulations and delayed government projects.
Following are excerpts of the interview.
Q: What is the estimated cost of the planned 11 sport stadiums and do you think national firms will win some of these contracts?
Hammadi: The Saudi contracting sector has the resources and ability to execute the 11 stadiums ordered by King Abdullah, given its solid experience which has grown over time by working with international firms on many projects in the kingdom..
For this reason, we expect Saudi contractors to grab the lion's share of these projects, which we estimate to cost more than SAR 20 billion (USD5.33 billion).
These are very large and strategic projects that will give a strong push to the domestic economy and boost the construction materials, infrastructure and industries markets by more than 30%.
Q: Are there any problems facing the Saudi contracting sector that could pose obstacles to implementation of the stadium projects?
Hammadi: Despite challenges such as faltering and stalled projects, the Saudi contracting sector managed to grow by nearly 8% last year. The problems were due to funding reasons in the absence of a specialized entity looking after the sector.
I am optimistic that Saudi companies will grab the lion's share of the projects pie. We now have to work to ensure as many Saudi companies as possible are awarded parts of those contracts.
Q: How would you describe the recent meeting held between Saudi contractors and Saudi Aramco, which oversees the stadium projects?
Hammadi: I was a successful meeting and we are optimistic about the results...and it is important to grant parts of the contracts to the biggest possible number of (Saudi players) in the sector.
We expect a good outcome from the participation of contractors, engineering consultancies and services companies to successfully deliver these projects.
Q: What is your assessment of the construction sector in Saudi Arabia?
Hammadi: Saudi Arabia is witnessing an infrastructure boom, which is reflected in the massive projects being executed, including universities, colleges, roads, rail and other projects.
These projects have largely stimulated the market for building materials such as cement, steel and others...but the contracting sector is still facing the problem of delayed and stalled project.
Our statistics show that around 20 % of the projects carried out by local contractors have stalled, while 30% have been delayed.
For this reason, we reiterate our calls for the creation of a supreme council for contractors to tackle such issues and believe that without such a council, the contracting sector will not play the role required from it.
But I can say that there is no danger facing Saudi contracting firms, mainly the large ones, as nearly 80% of them do not have financial liabilities.
We also believe there is a need for the local banks to better support the contracting sector through extending loans and other measures.
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