Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Saudi- Projects worth SR230bn to be completed by 2014  Join our daily free Newsletter

MENAFN - Arab News - 11/01/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Arab News) The increasingly accelerated government and private financing has been driving the fast pace of execution of Saudi Arabia's infrastructure projects

Even as this is in progress, there is intense pressure from the Kingdom's rapidly growing population to seek adequate physical and social infrastructure services



The National Commercial Bank, which underlines this in its new report, says approximately SR230 billion worth of infrastructure projects are expected to be completed by 2014. These were among the projects executed between 2008 and Q3, 2013

The high value of completed projects is mainly attributed to the value of contracts awarded in the infrastructure sector during 2011-2012. Contracts worth nearly SR288 billion were awarded during the period



Projects normally have an execution period anywhere from six months to three years but larger, more complex projects can go beyond that average time frame. Similar to 2011, 2013's contract awards in the infrastructure sector witnessed an impressive growth

The SR210 billion contract awards through the first three quarters of 2013 illustrate that expenditure in the infrastructure sector remains strong and is foreseen to continue over the medium term



John Sfakianakis, chief investment strategist at Masic in Saudi Arabia, said: "Without proper infrastructure it will be hard for any country to reach its full potential and compete. The level of expenditure in the infrastructure sector over the past couple of years has put the Kingdom in a position to provide its citizens with improved road networks, water distribution, power extensions and airport/rail services.

He said the use of public private partnerships (PPP) as a financing alternative had been extensively used in the United States and Europe with a wide degree of success. However PPPs are fairly new to the MENA region and are now in the beginning stages of implementation



"The government's control over all infrastructure entities places a heavy burden on itself to meet the needs of its citizens. PPPs are a favorable option for financing these entities as the private sector shares the benefits and risks of the project, while performing part of a government's function. When objectives have been met, private entities enjoy compensation by way of service tariffs and/or through governme budgets," Sfakianakis told Arab News




The Kingdom's ninth five-year development plan has placed a major emphasis on enhancing and growing its infrastructure capabilities. The SR1.4 trillion budget will be allocated across all sectors with a particular emphasis on advancing the standard of living, increasing employment and improving the development of all its sectors

Approximately SR400 billion will be spent on water, power, transportation and municipal and housing services



Paul Gamble, director: Sovereign Group at Fitch Ratings, said: "Improving infrastructure has both short and long-term gains to an economy. Over the short term it is a source of employment and revenue not just for construction companies, but for the suppliers of all raw materials and associated services. Over the long term, an improved infrastructure can enhance productive capacity throughout an economy. For example, better roads will allow goods and people to be transported quicker and at therefore at less cost, generating savings for all companies.



The level of construction spending plays a critical role in identifying the level of growth within the infrastructure sector. Construction spending represented 4.4 percent of nominal GDP during 2012 and has been fairly steady over the past five years reflecting that the global economic slowdown played a significant role in the declining growth of construction spending as a result of numerous project delays and cancellations. Hence, construction spending slipped from 9.2 percent of nonoil GDP in 2008 to 8.4 percent in 2010



"Infrastructure expansion is critical as the economy diversifies and the population expands. The growing demand for physical infrastructure in the coming years will necessitate new ways of funding it and important initiatives have already been launched in this regard. Sukuk funding has been used for airport projects and is an option for many other areas.," Jarmo T. Kotilaine, a regional analyst, said



He said: "Some of the economic cities are being built by listed companies. There are a growing number of initiatives toward public-private partnerships. Involving more private capital in infrastructure development will reduce the burden on the government budget but will also offer attractive long-term investment opportunities for institutions and individuals alike.

 


Arab News




  MENA News Headlines
 Sep 26 2016 - The Euromoney Kuwait Conference: Meeting the Challenge of Financial Innovation and ReformMENAFN Press
(MENAFN Press) Kuwait City - 27 September The 8th annual Euromoney Kuwait Conference takes place today on 27 September 2016, at the JW Marriott Hotel in Kuwait City. Co-hosted by the Ministry of ...

 Sep 26 2016 - Oil Industry Must Focus on Sustainability, Says Top Petroleum Development Oman ExecutiveMENAFN Press
(MENAFN Press) Ms Intisaar Al Kindi to Represent Innovative Oman Oil Producer at Middle East’s Largest Oil & Gas Event Industry Transition and Resilience Set the Agenda for ADIPEC 2016 Abu ...

 Sep 26 2016 - Moderate quakes rattle Japan no injuries or damage reportedSaudi Press Agency
(MENAFN - Saudi Press Agency) TOKYO, 25 Dhu-AlHijjah,1437 AH, 26 September,2016 , SPA -- A pair of moderate earthquakes rattled northern and southern Japan on Monday, but there were no immediate ...

 Sep 26 2016 - Pakistan launches polio vaccination drive amid tight securitySaudi Press Agency
(MENAFN - Saudi Press Agency) Islamabad, 25 Dhu-AlHijjah,1437 AH, 26 September,2016 , SPA -- Pakistan on Monday launched a three-day national anti-polio campaign to vaccinate around 37 million ...

 Sep 26 2016 - Israeli occupation forces open fire on Palestinian homes in GazaSaudi Press Agency
(MENAFN - Saudi Press Agency) Gaza city, 25 Dhu-AlHijjah, 1437,September 26, 2016, SPA -- Israeli occupation forces targeted and opened fire on Palestinian homes, east of Khan Yunis in the southern ...

 Sep 26 2016 - Kingdom of Saudi Arabia participates in International Conference on Atomic Energy in ViennaSaudi Press Agency
(MENAFN - Saudi Press Agency) Vienna, 25 Dhu-AlHijjah, 1437,September 26, 2016, SPA -- The International Conference on Atomic Energy today opened its 60th session in the Austrian capital Vienna. ...

 Sep 26 2016 - Governor of Jeddah receives US Consul General in JeddahSaudi Press Agency
(MENAFN - Saudi Press Agency) Jeddah, 25 Dhu-AlHijjah, 1437,September 26, 2016, SPA -- Prince Mishaal bin Majed bin Abdulaziz, Governor of Jeddah, received here today United States Consul General in ...

 Sep 26 2016 - Saudi- Prince Miteb bin Abdullah bin Abdulaziz Receives Poland's AmbassadorSaudi Press Agency
(MENAFN - Saudi Press Agency) Riyadh, 25 Dhu-AlHijjah, 1437,September 26, 2016, SPA -- Prince Miteb bin Abdullah bin Abdulaziz, Minister of the National Guard, received here today Ambassador of ...

 Sep 26 2016 - Chinese stocks close below 3,000-mark after period of stabilitySaudi Press Agency
(MENAFN - Saudi Press Agency) Beijing, Dhu-AlHijjah 25, 1437, September 26, 2016, SPA -- Chinese shares fell below the symbolic 3,000-point mark on Monday, following months of greater stability and ...

 Sep 26 2016 - Saudi Food and Drug Authority bans import of poultry meat and eggs from TogoSaudi Press Agency
(MENAFN - Saudi Press Agency) Riyadh, 25 Dhu-AlHijjah,1437 AH, 26 September,2016 , SPA -- Saudi Food and Drug Authority has imposed a temporary ban on the import of poultry meat, eggs and their ...

more...


 





Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help