Firms in race to manage office

Several international companies have submitted bids for a consultancy contract to manage Saudi Arabia’s National Project Management Office, as part of an effort to keep state spending under control, a report said.

The companies include Bechtel, Fluor, Parsons, CH2M, Aecom and Hill International, the Bloomberg report said.

The new office will oversee and support projects awarded by government agencies, the report said quoting two people with direct knowledge of the matter. The contract is expected to be awarded in the coming months.

The Saudi cabinet created the office last year to control capital spending.

Saudis ‘discuss takeover of Oger’

Saudi Arabia’s government is discussing a proposal to take over construction conglomerate Saudi Oger, owned by the family of former Lebanese Prime Minister Saad Al Hariri, a Lebanese newspaper reported.

Oger has been hit hard by a slowdown in the Saudi construction sector due to low oil prices and state spending cuts, and wage payments to thousands of its workers have been delayed for months, according to Saudi media and the workers themselves.

The Arabic-language Al-Akhbar newspaper quoted unnamed sources as saying that talks between Al Hariri and the Saudi government were in their final stages.

The agreement would centre on the government or businessmen from the ruling family taking ownership of the company, the newspaper said, adding that the buyer would take over all debts and financial obligations of Saudi Oger.

The newspaper said Al Hariri was negotiating to keep a stake in the company, proposing to keep 40 per cent in exchange for giving up some shares in a bank.

ITG to set up cable factory in KAEC

International Trade Gateway Company (ITG) intends to set up a high-voltage cable factory  over a 9,000-sq-m plot in Phase One of the Industrial Valley at King Abdullah Economic City (KAEC).

The cable factory will be the first of its kind in the economic city. 

“We will develop a new production facility that will expand our services and propel our strategic plans.  KAEC’s Industrial Valley is the ideal location from which to expand our business and reach a wider group of investors due to the strategic location, ease of procedures for new investments, and high quality infrastructure,” said ITG president Khalid Makki.

ITG manufactures fireproof structural cabling, as well as flex cables, gear and gauging instrument connection cables, and low-voltage cables.

Call to set up contractors’ bank

Saudi contractors have suggested the creation of a contractors’ bank to support and finance projects in the kingdom, following a downturn in the construction sector.

Fahd Alhamedi, head of the contractors committee at the Riyadh Chamber of Commerce and Industry, was quoted by Arab News as saying that the current level of investment in the contracting sector is not proportional to the number of construction projects currently being implemented.

He said there is a need to inject funds into the industry in order for the government projects to continue.

With fresh investments drying up, contractors say that up to 40 per cent of all government projects are currently stalled, the report said.

Alhamedi said before contractors take up a project, they now worry whether they would be able to pay their employees.  He added that the recession in the industry is due to the fact that banks are not financing the contracting sector.

Tenders set for new mall

Saudi Arabia’s Al Rugaib Holding Company is to invite tenders this month (September) for the construction of its mixed-use development north of Riyadh. 

The Al Thumama Mall will include a 250-room hotel, shopping mall, 350 serviced apartments, an outdoor food and beverage park by a lake, and retail and luxury shops.

The mall and the food and beverage park will be built in the first phase while the second phase will include the hotel rooms and serviced apartments. 

Al Rugaib Holding Company is planning to open the mall to the public in April 2018.

Real estate slows down

The real estate markets in Riyadh and Jeddah continue to maintain an overall slowdown in performance, according to a report from JLL, a global real estate investment and advisory firm.

JLL’s Q2 2016 Riyadh and Jeddah Real Estate Overview assessed the latest trends in the office, residential, retail and hotel sectors.

Jamil Ghaznawi, national director and country head of JLL Saudi Arabia, said: “We have witnessed a general softening of the residential market this quarter, with a marginal decline in rentals in Riyadh and sale prices in Jeddah. Further delays have been experienced in the completion of projects in Jeddah, despite increased efforts being made to address the shortage of affordable housing.”

The continuing slump in residential transactions – with sale volumes down a further five per cent in the second quarter – shows the pace of demand growth is certainly now slowing, said the report.