The Construction and Projects Forum Concludes Its Activities and Issues Recommendations
• Minister of Housing: Housing Units to Be Delivered After Eligibility Mechanism Is Approved
• Al-Zamil Calls for an Extension of Contract Implementation for All Signed Projects
Riyadh—Amlak
The Second Construction and Projects Forum, recently held under the patronage of His Excellency the Minister of Housing, Dr. Shuish Al-Duwaihi, at the Four Seasons Hotel in Riyadh, concluded its activities, with the participation of a large number of contracting and construction companies and institutions, as well as other relevant entities.
Housing Ministry Plans and Programs
Housing Minister Dr. Shuwaish Al-Duwaihi announced that his ministry is about to launch two national projects aimed at regulating this sector, The first is a mechanism for determining eligibility and priority, which identifies those eligible for subsidized housing and sets their priorities based on clear, transparent, and balanced criteria that ensure fairness for all groups.
Dr. Al-Duwaihi added during his address to the forum that the second project the ministry intends to launch is the ”Rent Network” project, which aims to regulate and develop the residential rental sector in the Kingdom, thereby ensuring the rights of both tenants and landlords.
Al-Duwaihi noted that the Ministry has launched land development and infrastructure projects in numerous locations, covering millions of square meters in Riyadh, Madinah, Al-Kharj, Dammam, Jeddah, Tabuk, Al-Ahsa, and Al-Qatif. Dr. Al-Duwaihi said: «In order to provide suitable housing options for citizens, the Ministry has constructed residential units as part of 48 projects covering various regions of the Kingdom; some have been completed, while work is ongoing on others, while the handover of these units will begin sequentially following the approval of the eligibility and priority criteria.
New »Housing“ Projects
The Minister of Housing noted that the Ministry has launched land development and infrastructure projects in numerous locations covering an area of two million square meters in Riyadh, Madinah, Al-Kharj, Dammam, Jeddah, Tabuk, Al-Ahsa, and Al-Qatif, followed by 80 projects currently in the design and bidding phases, covering a total area of 106,534,059 square meters across all regions of the Kingdom; contractors will be invited to submit bids for their implementation.
He called on contractors to approach the work with seriousness and to adhere to the three pillars of project success: completing the project on time, to the required quality standards, and within the contracted budget.
Project Contracts
In a related matter, Dr. Abdulrahman Al-Zamil, Chairman of the Board of Directors of the Riyadh Chamber of Commerce, affirmed that this forum aligns with the remarkable corrective campaign for the labor market, which we at the Chamber have been working toward.
Al-Zamil called for extending the implementation period of all signed project contracts by at least one year. He also urged the Ministry of Labor to act on the proposal submitted by the Council of Chambers to allow licensed companies to second their workers to other companies in need of them, in accordance with the Ministry of Labor’s regulations.
Dr. Al-Zamil noted that figures from the Saudi Arabian Monetary Authority showed that the construction sector’s debt in 2012 amounted to 90 billion riyals, and he said, ”I am certain« that the 2013 figures will be even higher, which is why banks have begun to exercise greater caution in lending to contractors.» He noted that all projections point to the likelihood of project defaults this year, which are expected to be double those of last year—estimated at 40 billion riyals in a study by the Anti-Corruption Commission.
Construction Sector
For his part, Fahad Al-Hammadi, board member and chairman of the Contractors Committee at the Riyadh Chamber of Commerce and Industry, said: «The second session of the Construction and Projects Forum builds on the positive results achieved by the forum during its first session, which was held two years ago under the patronage of the Governor of the Riyadh Region.»
He noted that the importance of the construction sector is evident in its contribution of more than 7% of the gross domestic product and its achievement of high growth rates exceeding 5 percent, while its capital assets exceed 150 billion riyals, and it employs more than 40% of the private sector workforce.
Forum Recommendations
The forum issued a number of recommendations, most notably:
• Implementing the arrangements for addressing delays and project failures in government development and service projects, as approved by the Council of Ministers in Resolution No. 260 dated 1/8/1434, and involving representatives from the sector in these arrangements.
• Establish an independent regulatory body for contractors to oversee the construction sector and its workers, with executive powers similar to those found in countries with advanced construction sectors, such as Singapore, Malaysia, and Canada.
• Review the mechanisms for localizing jobs currently in place in the construction sector from a strategic perspective that takes into account the needs and nature of the industry, in a manner that ensures the integration of government regulations. Make a full and urgent commitment to implementing project management methodologies in government projects, drawing on successful experiences from certain entities within the Kingdom.
• Enhance the efficiency of the judiciary and train judges specialized in adjudicating construction contract disputes by establishing specialized judicial chambers for this type of dispute and focusing on the training of these judges.
