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Saudi Arabia ... to spend heavily on educational infrastructure
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Saudi Arabia boosts spending on education infrastructure

RIYADH, February 4, 2015

Saudi Arabia is set to spend heavily on the education infrastructure projects across the kingdom including the construction of three universities, major refurbishment and upgrading of other universities, together with hundreds of new schools and sports centres across the country.

With the single largest budget allocation of $58 billion for the education sector, Saudi Arabia has made its intentions clear on its plan for the eduction sector, according to a report by leading international consultancy and construction company Mace.

The kingdom had approved a record budget of $229 billion for 2015 amid a significant drop in revenues due to falling oil prices, resulting in a five per cent deficit.

The budget represents an increase of 0.6 per cent over 2014 and spending on major development projects is expected to continue with strong allocations to education, healthcare, transport and water, stated the report.

With about two-thirds of employed Saudis working for the government, a significant proportion of expenditure will be on salaries and social welfare provisions, and it is anticipated that the government will use its vast reserves to prevent growth in unemployment and to preserve the confidence of investors, it added.

According to Mace, the economic growth for 2014 was expected to be 4.6 per cent, up from 3.8 per cent the previous year with growth for 2015 currently forecast to be 4.4 per cent.

The annual consumer price inflation had fallen to 2.5 per cent in November 2014 from three per cent at the end of the previous year and this level is expected to remain reasonably stable in the short and medium term, said the report by the industry expert.

Apart from education, a bulk of the budget was allocated for healthcare projects and social affairs. The $41.9 billion set for the sector is aimed at funding for three new hospitals, three blood banks and many primary care and specialist clinics, as well as the expansion and upgrading of existing facilities.

The government has allocated about $11 billion for transport and infrastructure with over half allocated to upgrading roads, port, rail and airport projects, stated Mace in its report.

The water, agriculture and related infrastructure budget of $10 billion includes $4 billion of funding for new and current projects to increase available water pressure and improve water treatment, it added.

According to Mace, the construction output has been somewhat constrained by delays to some infrastructure projects and shortages of labour and materials in some areas in Saudi Arabia.

It is likely that these factors will continue to play a part, but the expert said growth will continue at current levels in the seven to 10 per cent range.

With expenditure on major projects set to continue, Mace said, there will be a strain on resources and there is likely to be upward pressure on tender prices, which will see above inflation increases for the foreseeable future.-TradeArabia News Service




Tags: Saudi Arabia | Infrastructure | Schools |

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