Saudi Oger, one of Saudi Arabia's biggest construction companies, is looking for partners in the UAE as it gears up for a range of projects worth billions of dollars in the kingdom. The company is bidding for the 1.1km-tall Kingdom Tower which, if it goes ahead, will be the world's tallest building and it is planning to become involved in a slew of projects that will require partners.
"We're in talks with many companies as strategic partners but we have not selected any yet," said Ali Kolaghassi, the vice president of corporate business development at Saudi Oger. Saudi Arabia's government plans to build 92 hospitals and 1,200 schools over the next fives years as it develops infrastructure for a population that is forecast to reach 33 million by 2020. It is also investing heavily in housing projects, a new airport in Jeddah and a metro system in Riyadh.
"There is a strong will from Saudi Arabia to focus on such projects," said Mr Kolaghassi. "We also have to keep in mind that a large part of the population is under the age of 30; [the projects] will be to accommodate Saudis in desperate need of schools, housing, retail, etc." Meanwhile, contractors in the UAE including Arabtec Construction and Al Habtoor Leighton are also building up their order books in the country, which is the GCC's largest construction market.
Arabtec joined forces with CPC, a unit of the Saudi Binladin Group, and the kingdom's Prime International Group Services before setting up a unit called Arabtec Saudi Arabia in the country last year. Meanwhile, Al Habtoor has a partnership with the Riyadh-based Al Rajhi Projects and Construction for various projects. Arabtec has so far moved 6,000 staff to the country and plans to increase this to 10,000 by the end of this year as it wins new projects. Consolidated Contractors Company, a Greek company with a significant presence in the UAE, is also looking for partners in Saudi Arabia, according to Samer Khoury, its executive vice president of operations.
"The door is open for partnerships but it's also important to know who to select as your partners," he said. Still, the arrival of more foreign contractors offering lower prices has intensified competition for local companies, said Mr Kolaghassi. "The fact that there are lots of opportunities doesn't mean it will be an easy challenge," he said. "We're seeing lots of foreign companies coming in, whether it's from the UAE or Asia."
agiuffrida@thenational.ae
