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Sat 19 Apr 2008 04:00 AM

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Harnessing talent to sustain Saudi boom

Hosam Hasham, heavy lift engineer, Saudi Aramco, discusses the policies he would like to see implemented to sustain Saudi Arabia's construction boom.

Hosam Hasham, heavy lift engineer, Saudi Aramco, discusses the policies he would like to see implemented to sustain Saudi Arabia's construction boom.

Can you give me some information about your job and the company you work for?

I hold the position of chairman of lifting equipment in the Saudi Council of Engineers in Saudi Arabia. I'm also the department safety and environmental coordinator. I work for Saudi Aramco, one of the largest oil companies in the world, which is fully owned by the government of Saudi Arabia.

What are the main issues affecting the construction sector in Saudi Arabia?

The main one right now is meeting the demand of new projects. This includes having enough construction equipment, along with skilled operators and available contractors to execute such projects.

Another issue is the increase in the price of construction materials, and their shortages, which might impact or delay some contractors in meeting their milestones.

What are the differences between the industry in your country compared to other countries in the GCC?

The difference is that all other countries are relatively small compared to the size of Saudi Arabia. Expenditure in the construction industry will not be noticeable in comparison to the other geographically smaller countries in the region.

Yet the main cities like Riyadh, Jeddah and Dammam are rapidly expanding, horizontally and vertically. Also, new large industrial cities are to be developed around the country. The main investment right now is coming from the government, towards petrochemical plants and their supporting industries.

What does the future hold for the construction industry in Saudi Arabia?

We expect the boom to continue at least for the next two to three years, as the government has announced several major projects. This is supported by the increase in oil revenue and the expectation that oil will remain the world's energy of choice.

The strategy adopted by the government to invest in megaprojects and to support private investors is helping the economy grow. Many project initiatives were recently launched by King Abdullah to foster the economy.

According to the International Energy Agency (IEA), worldwide energy demand for oil and gas will grow by more than half over the next quarter-century, exceeding 16 billion tonnes of oil equivalent. Saudi Arabia will be investing US $80 billion dollars (SAR299.6 billion) over the next five years on several energy projects.

Saudi Aramco is working on six major crude oil increments, at various stages of development, which will require large and small cranes to construct world-class projects, with a total production capacity of some three million barrels per day.

By the end of 2009, that capacity will reach 12 million barrels per day. According to a Global Research report, Saudi Arabia will have six special industrial cities.

Three have already been announced and a further three will be announced early next year. They will require at least $600 billion over the next 20 years.

What is the government doing to help the construction industry?

Emphasis remains on hiring local manpower for these projects. This is where contractors face challenges. To overcome these problems the Saudi government established a new agency called the Saudi Arabian Investment Authority (Sagia), which works as a gateway to investment in Saudi Arabia.

Sagia's vision is to attract sufficient investment to achieve sustainable rapid economic growth while capitalising on the Kingdom's competitive strengths as the global capital of energy, and as a major hub between East and West.

The government's goal is to position Saudi Arabia among the top ten most competitive nations by 2010 through the creation of a pro-business environment and a knowledge-based society, while making Saudi Arabia a favourable investment destination for the region and the world.

What other policies could the government bring in to improve the construction industry?

There could be more vocational training centres that prepare local manpower for positions in project construction, with set minimum and maximum wages for manpower.

This will give contractors the leverage to recruit local manpower without needing to go against government policy and hire outsiders. This approach would also provide a pool of available local workers to draw upon.

The work visa number would then be based on the available local graduated manpower from those vocational centres.

I am looking forward to the day when I can find trained local manpower able to execute these projects. With such wealth available throughout the GCC, I expect this region will become a world leader in construction, if we can just harness a talent pool of willing workers.

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