Saudi sees no delays to major project investment

RIYAL DEAL: Saudi Arabia expects to attract overseas investors during the global credit crunch. (Getty Images)

Saudi Arabia is on track to implement its investment programme this year as planned as falling raw material prices helps it cut costs, the head of the country's government investment agency said.

Amr Al-Dabbagh, governor of Saudi Arabia's General Investment Authority, said the kingdom can attract overseas investors by providing much-needed debt financing when the cost of credit has gone up elsewhere.

"We are coming up with ways and means for public finance and debt finance. Saudi Arabia will be one of the preferred destinations in 2009 at a time when debt finance and public finance are not available in the rest of the world," he told Reuters at the annual meeting of the World Economic Forum.

"We have important infrastructure and public projects that we cannot afford to delay. We take advantage today of depressed prices of building materials because that would subsidise our cost structure significantly by at least 30-40 percent."

The SAGIA is a government agency aimed at improving the country's business laws and policies according to international best practices.

The government has also sought to reassure Saudis that modernisation schemes are on track after fears of a global economic slowdown helped push oil prices down by more than $100 since July.

The kingdom, where citizens pay no tax but enjoy few political rights in return, has run budget surpluses in recent years.

However, this year, the country expects to post its first budget deficit since 2002 as the kingdom is raising its 2009 expenditures to an expected 475 billion Saudi riyals ($126.7 billion) while revenues are projected to fall to 410 billion riyals. (Reuters)

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