The Saudi Contractors Authority has announced its intention to adopt model contracts for all contracting activities to safeguard the rights of both contractors and clients, emphasizing that many of the problems that have arisen in the sector stem from unclear contracts or the absence of contracts.

This came during a meeting last weekend between Eng. Osama Al-Afaleq, Chairman of the Authority’s Board of Directors, and representatives of the construction sector at the Eastern Province Chamber of Commerce headquarters, where he announced the launch of 13 initiatives to address the sector’s financing challenges, confirming that the initiatives are currently under review by a specialized committee at the Ministry of Finance before being submitted to the relevant authorities for approval, noting that the initiatives include effective financing solutions for small businesses, which account for more than 90 % of construction firms overall, Al-Afaleq explained that the initiatives are based on a study conducted by international consulting firms to address the sector’s financing challenges, noting that the initiatives target small and medium-sized enterprises.

Al-Afaleq stated that 4 % of the companies operating in the sector are classified, while 96 % lack classification, and that the Authority is currently in communication with the relevant committees at the Ministry of Municipal and Rural Affairs to achieve a higher standard for contractor classification.

Regarding stalled projects, Al-Afaleq explained that the Authority is in contact with the National Content Unit to propose several initiatives to revitalize the sector and resolve the issue of stalled projects, adding that these delays could be halted if a sound regulatory environment were in place.