Companies interested in working in Saudi Arabia must have a local partner and be prepared to handle the kingdom's substantial layers of bureaucracy and delays.
Companies interested in working in Saudi Arabia must have a local partner and be prepared to handle the kingdom's substantial layers of bureaucracy and delays.
Companies interested in working in Saudi Arabia must have a local partner and be prepared to handle the kingdom's substantial layers of bureaucracy and delays.
Companies interested in working in Saudi Arabia must have a local partner and be prepared to handle the kingdom's substantial layers of bureaucracy and delays.

The kingdom of new opportunity


  • English
  • Arabic

Saudi Arabia is the new land of opportunity for the regional construction industry.

The kingdom has US$220 billion (Dh808.09bn) of projects in the development pipeline, representing 36 per cent of all the constructions deals in the Middle East and North Africa (Mena), according to data compiled by Citi Investment Research & Analysis.

Saudi Arabia awarded $11.4bn in construction contracts in the first six months of this year, Citi reported.

But the GCC's biggest market remains difficult to break into for international players. Opportunity does not always translate into profits for many companies hoping to grow a business in the kingdom.

"There are high barriers to entry," says Heidy Rehman, an analyst with Citi. "It's an attractive market, but that doesn't mean everybody can tap into it."

Companies interested in working in Saudi Arabia must have a local partner and be prepared to handle the kingdom's substantial layers of bureaucracy and delays, analysts warn.

And not every sector in Saudi Arabia is booming. The government is shifting its priorities and spending, leaving some projects in limbo.

"There is much less of an emphasis on the reformist agenda," says John Harris, the co-head of the Saudi Arabia office for Jones Lang LaSalle. "Now what they are doing is redistributing money into investments and social spending."

Five years ago the government was trumpeting the launch of six huge "economic cities", which would transform the landscape and diversify the kingdom's economy. Today work on most of those projects has slowed or stalled.

Instead the focus is on power and energy projects, infrastructure, tourism and affordable housing. Some of the developments moving forward in recent months include $2bn in oil and gas projects, two medical facilities priced at $850 million, a $10.5bn plan to develop the country's airports and the $6bn railway linking Makkah and Medina.

Earlier this year, the Saudi government announced plans for a 500m riyals (Dh489.7m) stimulus package, aimed primarily at developing affordable housing.

A new ministry of housing was launched and more money was funnelled into a fund for financing citizen's property purchases.

The ministry of economy and planning estimates 1.25 million new homes will be required by 2015 to meet the needs of the growing population.

But it may be difficult for the private sector to take advantage of the housing push.

Land prices continue to soar, making it a challenge for developers to find a profit in low-cost housing projects. Last year prices for undeveloped land rose an average of 20 to 30 per cent in sections of Jeddah and Riyadh.

In Jeddah, the most inexpensive villas are often priced at about 900,000 riyals, which is unaffordable to 70 per cent of the population, according to Jones Lang LaSalle estimates.

At the same time, the government has yet to approve long-awaited reforms to mortgage laws that make it difficult for many citizens to obtain financing to buy a home. And many builders are finding it a challenge to obtain construction financing for housing projects..

"International players need to partner with strong on-the-ground local players who have the right blend of developmental objectives and commercial objectives," says Wahid Sarij, the executive vice president of Capitas Group International, a consultancy.

"The real opportunity for international construction companies lies in enhancing the capacity and capabilities of the local market by bringing cost-saving methodologies and materials for sustainable housing that are in line with market needs."

The government is exploring public-private partnerships (PPP) for many of its construction initiatives.

To date the kingdom's record with PPP deals has been patchy. Long-standing plans to use PPP to expand the railway system with a "land bridge" project connecting Jeddah and Riyadh never materialised. But analysts still see alliances with government programmes offering the best option for international companies.

"Opportunity is much more with public agencies" than the private sector, Mr Harris says.

While the construction industry continues to grow and attract international interest, new policies are making it more challenging for international companies to operate in the kingdom.

The government wants companies to hire more Saudi Arabians and to limit the ability of contractors to easily move in and out of the country.

Drake & Scull International (DSI), the Dubai mechanical, electrical and plumbing specialist, has found success by developing separate companies in Saudi Arabia. About half of its Dh8bn worth of current projects is in Saudi Arabia.

When DSI acquired a 100 per cent stake in the International Centre for Contracting Company, one of its Saudi Arabia partners, for 128m riyals in April, one of the advantages was the "immediate assumption of human capital", Nomura Securities noted in a report. That included an estimated 7,000 workers to help on projects such as the 2bn riyal deal to help fit out the King Abdullah Petroleum Studies and Research Centre.

Other UAE companies have found Saudi Arabia a difficult market. Arabtec, a construction company based in the Emirates, has been slow to report big profits on its Saudi Arabian projects, some of which have been delayed, analysts note.

In the short term, companies focused on secondary work with specific expertise - fitting out, property management and development services - stand to benefit the most, Mr Harris says.

"I think there is more of a contracting opportunity [in Saudi Arabia] than a development opportunity."

Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

Ticket prices
  • Golden circle - Dh995
  • Floor Standing - Dh495
  • Lower Bowl Platinum - Dh95
  • Lower Bowl premium - Dh795
  • Lower Bowl Plus - Dh695
  • Lower Bowl Standard- Dh595
  • Upper Bowl Premium - Dh395
  • Upper Bowl standard - Dh295
UAE currency: the story behind the money in your pockets
GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

UAE currency: the story behind the money in your pockets
Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Conflict, drought, famine

Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.

Band Aid

Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.

UAE currency: the story behind the money in your pockets
THE CLOWN OF GAZA

Director: Abdulrahman Sabbah 

Starring: Alaa Meqdad

Rating: 4/5

SUZUME
%3Cp%3EDirector%3A%20Makoto%20Shinkai%3C%2Fp%3E%0A%3Cp%3EStars%3A%20Nanoka%20Hara%2C%20Hokuto%20Matsumura%2C%20Eri%20Fukatsu%3C%2Fp%3E%0A%3Cp%3ERating%3A%204%2F5%3C%2Fp%3E%0A
Korean Film Festival 2019 line-up

Innocent Witness, June 26 at 7pm

On Your Wedding Day, June 27 at 7pm

The Great Battle, June 27 at 9pm

The Witch: Part 1. The Subversion, June 28 at 4pm

Romang, June 28 at 6pm

Mal Mo E: The Secret Mission, June 28 at 8pm

Underdog, June 29 at 2pm

Nearby Sky, June 29 at 4pm

A Resistance, June 29 at 6pm 

 

Company Profile

Company name: Fine Diner

Started: March, 2020

Co-founders: Sami Elayan, Saed Elayan and Zaid Azzouka

Based: Dubai

Industry: Technology and food delivery

Initial investment: Dh75,000

Investor: Dtec Startupbootcamp

Future plan: Looking to raise $400,000

Total sales: Over 1,000 deliveries in three months

THE BIO

Bio Box

Role Model: Sheikh Zayed, God bless his soul

Favorite book: Zayed Biography of the leader

Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet

Favorite food: seafood

Favorite place to travel: Lebanon

Favorite movie: Braveheart

What can victims do?

Always use only regulated platforms

Stop all transactions and communication on suspicion

Save all evidence (screenshots, chat logs, transaction IDs)

Report to local authorities

Warn others to prevent further harm

Courtesy: Crystal Intelligence

Australia men's Test cricket fixtures 2021/22

One-off Test v Afghanistan:
Nov 27-Dec 1: Blundstone Arena, Hobart

The Ashes v England:
Dec 8-12: 1st Test, Gabba, Brisbane
Dec 16-20: 2nd Test, Adelaide Oval, Adelaide (day/night)
Dec 26-30: 3rd Test, Melbourne Cricket Ground, Melbourne
Jan 5-9, 2022: 4th Test, Sydney Cricket Ground, Sydney
Jan 14-18: 5th Test, Optus Stadium, Perth

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

The specs

Engine: Four electric motors, one at each wheel

Power: 579hp

Torque: 859Nm

Transmission: Single-speed automatic

Price: From Dh825,900

On sale: Now

Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

HWJN
%3Cp%3EDirector%3A%20Yasir%20Alyasiri%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Baraa%20Alem%2C%20Nour%20Alkhadra%2C%20Alanoud%20Saud%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A%3Cp%3E%3C%2Fp%3E%0A
Specs

Engine: Dual-motor all-wheel-drive electric

Range: Up to 610km

Power: 905hp

Torque: 985Nm

Price: From Dh439,000

Available: Now

Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

Torque: 390Nm

Price: From Dh126,000

Available: Now

In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates