(MENAFN - Arab News) The construction sector is a driving force behind the Kingdom's economic development with 159 billion committed to various projects in 2012, according to a report released during Riyadh Economic Forum 2013.
The report entitled "Saudi Arabia 2013" prepared by Oxford Business Group in cooperation with Saudi authorities stated: "Some 742 new schools and 40 colleges are under construction, while 17 new hospitals are being built and 130 redeveloped."
In addition, a total of 4,000 km of new roads are being laid, whereas new rail projects will cover the area of 7,000 km, it added.
Saudi Railways Organization (SRO) has signed a 67 million contract with the US-based Freight Car America Inc. to supply 500 wagons for transportation of cement, cereals, limestone and ballast. The transport projects could lower future material costs.
The report added that several development plans focus on infrastructure and four new economic cities are currently in the works.
Moreover, a national housing initiative will further modernize urban areas in the Kingdom, it added.
The annual report asserted that demographic and economic growth drive demand for development and when the construction sector in many countries may still be in the doldrums, it is proving to be the driving force behind economic growth in the Kingdom.
"Indeed, the Kingdom is the envy of the region, eyed covetously by contractors elsewhere," it underlined.
Many experts attending the forum also agreed to the development story in the sector stating that the Kingdom's geography and demography will continue to demand the development of infrastructure, social facilities and housing, indicating plenty of works for the contractors.
Furthermore, with the Central Department of Statistics and Information (CDSI) pegging population growth at an annual rate of 2.9 percent, the need for further transport, power infrastructure, residential buildings and social amenities, is unlikely to abate any time soon, instead it will be supported by a robust and growing economy.
According to CDSI, the GDP growth rate reached 6.77 percent in 2011 and despite the slowdown seen in many Western economies, the Kingdom's forecasted GDP growth rate of 6.8 percent during last fiscal is more than double the regional and global figures.
One of the participants on the closing day of the forum on Wednesday stated that the Kingdom is the standout market in a rapidly developing region.
Echoing the assertion a study by Merill Lynch, one of the world's leading financial management and advisory companies, said 4.3 trillion will be invested in construction projects across the MENA region by 2020, an increase of nearly 80 percent on levels in 2012, which explain the success story of construction sector.