On Tuesday, February 28, the Saudi Contracting Authority announced the date for its first general assembly meeting, to be held in the Saad Al-Maajil Hall at the Council of Saudi Chambers in Riyadh, Registration for membership in the Authority will close on Monday, February 20, 2017. This was announced by the Authority’s Chairman, Osama Al-Afaleq, during an introductory session on the Authority and its strategic plans recently hosted by the Eastern Province Chamber of Commerce at its headquarters in Dammam.
34 initiatives
The Authority’s chairman explained that the number of companies registered with the Authority has not yet exceeded 300, while the number of companies that have completed the registration requirements stands at 160, estimating the size of the sector at approximately 140,000 entities, noting that the Authority is currently implementing 34 initiatives aimed at achieving an ideal, advanced contracting environment. Al-Afaleq stated that the Authority’s primary mission is to elevate and regulate the sector, noting that in its efforts to develop the contracting sector, the Authority is not a substitute for the National Contracting Committee or other committees within the Saudi Chambers of Commerce; rather, it serves as the voice of contractors and acts as an overseer of our performance. He emphasized that, in classifying contractors, the Authority follows the categories issued by the Ministry of Commerce and Investment, namely: general contracting, specialized contracting, operation and maintenance contracting, and construction contracting.
The Contracting System
Al-Afaleq explained that the Authority encompasses the entire contracting sector, including both contractors and clients. Al-Afaleq expressed his hope for the issuance of standardized contracts for all contracting work that would ensure all parties" rights are upheld, thereby achieving transparency in all matters. He emphasized the importance of registering with the Authority and attending the General Assembly, as it is the source of all the Authority’s financial and executive decisions. For his part, Abdulhakim Al-Ammar, a member of the Eastern Province Chamber of Commerce’s Board of Directors and Chairman of the Chamber’s Contracting Committee, explained that the Saudi Contractors Authority was launched with the aim of establishing and developing the foundations, standards, and regulations related to the sector, as the Authority is the result of initiatives proposed by the Construction Committee of the Eastern Province Chamber over the past few years and re-adopted at every Chamber meeting and forum.
Industry Updates
Engineer Thabit Mubarak Al-Suwaid, Secretary-General of the Saudi Contractors Authority, reviewed several points regarding the Authority in a detailed working paper, noting that the construction sector faces a number of challenges, the most significant of which are contract terms and conditions. He noted that many small and medium-sized enterprises have faced problems due to the sector’s weak regulation, as many transactions lack transparency. He addressed the challenges contractors face in their work—which is a true reflection of the culture of society—and noted that project budgets constantly change during the implementation phase due to poor planning from the outset.
Vision 2030 and the Construction Market
Al-Suwaid discussed the expected impact of Vision 2030 on the construction market, noting that it will be positive based on several factors, which will strengthen the role of contractors in the national economy, including increasing the capacity to accommodate pilgrims performing Umrah from 8 million to 30 million, increasing the homeownership rate among citizens from 47.1% to 52.1% by 2020 through financing, mortgage loans, and allowing the private sector to engage in construction, and restructuring the health and education sectors to provide better services. He explained that, based on the Kingdom’s Vision 2030, the challenges facing the construction industry, and best practices, the mandate of the Saudi Contractors Authority has been defined. It serves as a private-sector-managed, non-profit entity that provides recommendations to the construction industry, whose mission is to establish the foundations and standards for the sector. Its regulatory framework comprises contractors, subcontractors, clients, operations and maintenance personnel, and project management consultants
The Authority’s Focus Areas and Objectives
Al-Suwaid addressed the Authority’s key priorities and objectives, which include establishing and implementing best practices for the construction industry, creating a global organization for the sector, providing innovative solutions for the sector, and fostering transparency, improving contractors’ skills, helping local companies operating in the sector expand their business outside the Kingdom, building the Authority’s leadership and human capital, developing its technical capabilities, fostering a culture of accountability, and promoting the Authority throughout the Kingdom. Regarding the Authority’s activities, it explained that they fall within the scope of (contractor licensing), to ensure that contractors meet minimum qualifications and capabilities by licensing them according to predefined standards, as well as (contractor classification) based on their execution capabilities, and establishing (contracting standards and regulations) to improve the contracting system.
