Saudi awards $13.3bn building contracts in Q1
Riyadh, May 23, 2011
The construction sector in Saudi Arabia witnessed solid growth during the first quarter with contracts worth SR49.7 billion ($13.3 billion) being awarded in the Kingdom compared to SR8.8 billion ($2.34 billion) contracts last year, said a report.
Additionally, the Construction Contracts Index (CCI) reached 187.6 points to end the quarter compared to the first quarter last year, which witnessed the CCI at 79.02 points, National Commercial Bank (NCB) said in its 'Construction Contracts Index for Q1.'
The CCI soared to its highest point in February, reaching 225.5 points, the report stated.
The ongoing priorities to grow the Kingdom's economic and social infrastructure as was set-forth in the 2011 budget has allowed the construction sector to continue its impressive growth, the NCB report added.
The top Saudi bank pointed out that the momentum that was witnessed during the end of 2010 was still growing. 'The value of awarded contracts was the result of several mega-projects being awarded in sectors such as transportation, oil and gas and power sectors,' the NCB report said.
The oil & gas sector alone accounted for 38 per cent of the total value of awarded contracts followed by the transportation and industrial sectors, each garnering 18 per cent and 10 per cent respectively, it added.
The total value of awarded contracts in January reached SR7 billion of which the lion's share (62 per cent) went to the power sector, while the water sector accounted for 20 per cent.
There was a single awarded contract in the power sector by the Saudi Electricity Company (SEC) to Arabian Bemco to extend the PP10 and Qurayyah power plants.
Under the expansion, Arabian Bemco will add 700MW to PP10 and 800MW to Qurayyah. The value of the contract is approximately SR3.75 billion and is estimated to be completed by 2012 and 2013 for the PP10 and Qurrayah plants, respectively.
The implementation of improved water networks as well as the development of desalinization plants is a major initiative that was set forth in the 2011 budget.
'Given the high value of awarded contracts during the first quarter, the CCI is off to a fast start similar to 2009. This suggests that the value of awarded contracts is expected to progressively increase as we reach the second half of the year,' said the NCB report.
Ministry of Water and Electricity awarded SR1.1 billion contracts across the kingdom. The transportation and oil & gas sectors elevated the value of contracts during February, accounting for 64 per cent of the SR26.2 billion in awards, said the NCB report.
The transportation sector accounted for SR9 billion after Saudi Railways Organization (SRO) awarded the second package of phase I of the Haramain high-speed railway to a consortium of companies led by Saudi Binladen Group and Saudi Oger, the report said.
According to NCB, the construction sector continues to display its resiliency as it started the year on a strong note. The value of awarded contracts typically increases during the second half of the year, it added.-TradeArabia News Service