The Kingdom is undergoing one of the world’s biggest construction booms, which would drive economic growth, boost local businesses and create jobs for citizens, a leading expert said here Wednesday.
Nathan Waugh, portfolio director for The Big 5 Saudi construction exhibition organizers DMG Events, said construction showed the highest growth in the nonoil sector, of 6.7 percent, in 2014.
“Falling oil prices will have a positive impact on the construction industry as a whole,” Waugh told Arab News on the sidelines of event currently underway at the Jeddah Center for Forums and Events. “This positive impact is largely due to the lower manufacturing and logistics costs for most building materials, especially petroleum-based building materials, meaning that the cost of asphalt, roofing materials, insulation, plastic materials, steel and PVC piping will also drop.”
He said: “We are also likely to see costs of transporting goods and services drop significantly as surcharges imposed when the cost of oil peaked several years ago are set to be eased as gasoline prices hit five-year lows.”
He added: “The Big 5 Saudi has grown at a rapid rate, figures have more than doubled over the last four years and we are pleased to announce that 2015 will be bigger and better than previous years. There has been strong interest in Saudi Arabia as a whole over the last few years and this has positively impacted the construction industry across the whole region.”
Waugh said: “The success of the event has attracted more visitors each year; we have seen numbers almost double in the past four years with 9,000 visitors in 2011 to 10,758 in 2014. This year, we expect nothing less, and with an estimated figure of 17,000 visitors, it is set to be our biggest event yet."
He said Saudi Arabia is undergoing one of the biggest construction booms in the world, with a number of multi-million riyal projects currently underway, and with the Kingdom set to continue investing in major projects.
He said one of Saudi Arabia’s largest projects is the King Abdullah Economic City where more than SR375 billion will be spent over the course of the 18-year project, which began in 2007. The project spans 55 million square meters, and boasts 35 km of beachfront in the Makkah Province between Jeddah and Rabigh in the west of the country. It also has a huge seaport, an 8-million-square-meter industrial district and a new town for thousands of people.
Waugh said there are a number of multimillion-riyal projects due to finish in the coming years such as the Haramain rail project, which will link western towns of Madinah and Rabigh. The rail network will also have a second part to the project that will link the Western Red Sea port of Jeddah with nearby Makkah, due to finish in 2016.
The Haramain rail network, expected to cost nearly SR46 billion, would consist of a 450-km rail system that would pass through Makkah, Jeddah, King Abdullah City, Rabigh and Madinah, and include five main train stations.
Other megaprojects currently under construction include the development of the King Abdulaziz International Airport in Jeddah. The project which began in 2006 is set to be completed in 2035. The three-stage development would transform the airport, increasing capacity of up to 70 million annual passengers (MAP) many of whom would be pilgrims, he said.
“There are more than SR11.25 trillion ($3 trillion) worth of development projects due to start in the Kingdom by 2020, with future investments in similar projects rising to a little less than SR1.5 trillion ($400 billion),” Waugh said.
With an estimated SR750 billion spending in construction planned over the next two years, Saudi Arabia is likely to remain the dominant construction market in the Gulf Cooperation Council, he said.