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SAUDI Arabia awarded a record SR293.4 billion ($78.21 billion) worth of contracts in 2013, the kingdom’s National Commercial Bank (NCB) said in its latest quarterly report.
The value of awarded construction contracts moderated in the fourth quarter to SR41.7 billion ($11.11 billion) following an exceptional third quarter, the NCB Construction Contracts Index showed. Furthermore, 2013 surpassed 2012’s performance by 25 per cent and also eclipsed the previous high of SR270.3 billion ($72 billion) during 2011 by nine per cent.
The construction sector continues to benefit from extraordinary spending on a massive scale as the government maintains its push towards meeting rapidly growing demand for services by its citizens while diversifying the economy away from the oil sector. The total value of awarded contracts of SR293.4 billion indicates that the government has and will continue the trend of placing significant injections into its capital expenditures, the report stated.
Anchor sectors were responsible for a majority of the awards: SR92 billion ($24.52 billion) for transportation, SR48 billion ($12.79 billion) for power, SR19 billion ($5 billion) for industries and SR18 billion ($4.8 billion) for petrochemicals.
In addition, the SR40-billion ($10.6 billion) real estate sector played a prominent role with numerous contracts focusing on residential and mixed-use development. In the fourth quarter, the industrial and power sectors captured 71 per cent of the value of awarded contracts.
The 2013 record was largely attributed to the government’s continued expansion of capital expenditures.
The bulk of the contracts by value were awarded in the second half of the year, accounting for 65 per cent of awards. The water, education, healthcare and roads sectors witnessed sizeable spending by the government worth SR45.7 billion ($12.8 billion).
The private sector played a larger role in the development of projects, with the Ministry of Finance having awarded 2,330 contracts to the sector.
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