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Sat 24 Dec 2011 01:43 PM

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Value of Saudi's delayed public projects hits $147bn

Contractors ask government to take immediate steps to save them from heavy losses

Value of Saudi's delayed public projects hits $147bn
Saudi Arabia has unveiled a $130bn spending plan to build homes and infrastructure

The estimated total value of Saudi Arabia’s delayed public
projects is nearly SR550bn ($147bn), according to a contractors’ committee

Lack of funds, manpower and equipment and issues related to
contract terms are the main reasons for the delays, Raed Aqeeli, chairman of
the contractors committee at the Jeddah Chamber of Commerce and Industry told
Arab News daily last week.

"We have also problems related to increase in prices of
building materials, the working mechanism for consultants, and government
bureaucracy," he added.

Saudi contractors have requested the government to step in
and take immediate measures to scale down its negative impact on the Kingdom's
progress and welfare of its people, Arab News added.

The National Contractors Committee at the Council of Saudi
Chambers has recently signed up an international consulting house to study the
impact of delays in implementing various government projects.

"The study will give a correct picture of the whole
problem and will contribute to boosting the contracting sector," Fahd
Al-Hammadi, the committee’s chairman told Arab News.

"We are looking for a realistic and practical solution
to the problem in order to save the state and contractors from heavy losses. We
also intend to propose a suitable mechanism to overcome the difficulties that
were hindering the implementation of many projects," he added.

Saudi Arabia, the wealthiest GCC state, has unveiled a
$130bn spending plan to build homes and infrastructure and address unemployment
of 10 percent.

The kingdom will see no near-term slowdown in the value of
construction contracts being awarded, National Commercial Bank said last month.

The bank's Construction Contract Index showed that a total
of SR95.1bn ($25.3bn) worth of deals were awarded during the third quarter of
2011, more than in the previous two quarters of the year.

Awarded contracts so far this year have reached SR179.5bn,
the index revealed.

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