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28 March 2024

Saudi construction boom boosts prospects for regional contractors

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By Staff

Saudi Arabian construction industry is poised to achieve a 4 per cent growth to reach a value of SAR87b this year, where the sector’s annual growth is expected to be maintained between 2011 and 2015 with the same rate, according to the Saudi Arabia Infrastructure Report for the second quarter of 2011.

Recent reports recorded over SAR375b of social and economic infrastructure projects under way and in the pipeline in Saudi Arabia, which illustrates high levels of current activity and future growth potential for this sector.

“Saudi Arabia has maintained a strong and sustainable demand for infrastructure projects, which is due to the growing Saudi national population with strong demographics, as 66 per cent of the population is under 25, in addition to the expanding economy,” said Khaldoun Tabari, CEO, Drake & Scull International (DSI).

“The significant number of contracts in the tendering phase has also peaked investor interest in Saudi Arabia, with many regional construction companies focusing on the country for opportunities. Additionally, the SR580b national budget, which is the largest state expenditure to date, the SR290b homebuilding fund and the latest mortgage law represent a strategic incentive for our company to further expand and seek growth in the kingdom’s attractive market.”

DSI is present in Saudi Arabia through its wholly owned subsidiaries Drake and Scull Construction (DSC) and Drake and Scull Water and Power (DSWP).

The company recently secured the King Abdullah Petroleum Studies and Research Centre (KAPSARC) project in Riyadh for a total value of SR2b. “DSC has deployed around 1,200 people on the KAPSARC site and the number is expected to grow to around 3,500 in a few months’ time,” said DSC’s Executive Director, Saleh Muradweij.

Earlier this month, the company reported revenues of Dh645m in Q1 – a 67 per cent year-on-year revenue growth. Saudi Arabia remains the biggest market for DSI and constitutes 50 per cent percent of its Dh7.5b backlog as of March 31, 2011.