The value of construction projects deals in Saudi Arabia is expected to jump to about SAR322bn (US$85.86bn) next year from SAR260bn in the current year, Jeddah-based Okaz daily reports Saturday citing an executive.
The Saudi contracting sector suffers from financing and supervisory challenges in addition to other problems relating to the prerequisites of government contracts, Fahd Al Hammadi, head of the contracting division at the Riyadh Chamber of Commerce and IndustryRiyadh Chamber of Commerce and Industrysaid according to the paper.
Government contracts should be modernized and the Saudi finance ministry is expected to adopt soon a new contract formula that will benefit both the private sector and the state and will put contractors at ease, he added.
Local construction projects are facing major financing problems as the banks are hesitant about funding such huge number of contractors and "we are seeking to tackle this problem with the banks," the daily reports citing Hammadi who proposed the creation of a fund to finance contractors that will be similar to other funds such as the [Saudi] Industrial Development Fund and the Real Estate Development Fund.
"We need a supervisory body that will keep wrongdoers out and that will be made up of the contractors themselves and that will include successful contractors as members," he said adding: "We are in talks with the Shoura Council and the ministry of finance, so that this body will be headed by a minister in the same manner as the [Saudi Arabian] General Investment Authority."