Saudi sees $66bn worth of projects signed in 2011

The total value of contracts awarded in Saudi Arabia reached $66bn in 2011, a six percent increase on the previous year, according to new research.

The steep slowdown in activity in the UAE had propelled the kingdom to be the largest projects market in the region, totalling more than half of the $120bn contracts awarded in the GCC in 2011.

Forecasts by MEED Insight say that the Saudi Arabia projects market will grow 10 percent to $72bn worth of contract awards in 2012 spurred by increased investments in the construction, petrochemicals and power sectors.

With more than $300bn worth of projects planned and un-awarded, the kingdom has also by far the biggest future projects market, its report said.

It said high oil prices which enable the government to increase its capital projects outlay was one of the main reasons behind the growth.

It added that demographic growth was also critical as a larger population and a booming economy result in the need to invest in utilities and transportation infrastructure.

The Arab Spring too has acted as an impetus for Riyadh to accelerate spending on social infrastructure schemes, the report said.

Ed James, head of MEED Insight, said: "With the UAE projects market declining, and Qatar yet to really get going with its project plans, Saudi Arabia is the only GCC projects market to offer immediate opportunities for many companies."

He added that the Saudi projects market was based on a fundamental need for investment rather than speculation.