01 May 2016

Saudi Arabia’s construction sector is likely to spend $29.9 billion on development projects in 2016 with similar projections for the next year, according to a report by Faithful+Gould, a leading integrated project and programme management consultancy.

The forecasted spend is 20 per cent less than the previous year’s budget. However, it reflects a new and cautious attitude towards spending amid the oil slump, while reaffirming the kingdom’s commitment to its growth and development, stated Faithful+Gould in its report released at a seminar jointly hosted with Saudi Council of Engineers in Jeddah.

The revised budget of $22.9 billion will lead to a large number of projects either being scaled down and revised or put on hold indefinitely, it added.

The seminar is part of an extended series of professional development events designed to encourage and educate project managers and industry professionals on the importance of early engagement of project and programme management and best practices by furthering knowledge and sharing the tools necessary for overall delivery of a project within budget and on time, said Faithful+Gould.

The consultancy pointed out that measures such as establishing project management offices across the kingdom and implementing improved planning processes are supported by a careful strategy in the upcoming years to maintain a wide range of diversification initiatives and investment programmes to boost the government’s ongoing efforts to fortify itself through long-term non-oil development.

As such, the focus will now shift to education, healthcare, science, technology, and e-governance projects which will all continue to be priority sectors for the foreseeable future, it added.

Concurrently, Saudi Arabia has initiated efforts to develop different funding models that go beyond the country’s historical reliance on oil revenues such as PPP (public-private partnership) to supplement its still considerable spend with PPP financing having funded the completion of Madinah Airport last year and Taif Airport, which is in the tendering stage.

David Clifton, the regional business development director of Faithful+Gould, said: “Offering professional development seminars in this economic climate equips project managers with the tools necessary to deliver projects under budget.”

“With the newly released PMO (project management offices) laws and the budget revisions on many projects, it is now more important than ever to explore the benefits of early programme and project management and the critical role PMO processes play in delivering projects on time and under budget,” he added.

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