Doing Business in Saudi Arabia - International Franchise Association

Engineering & Architectural Services – ACE
Overview Return to top
Saudi Arabia’s Architectural Construction & Engineering sector remains one of the most
important sectors in the Kingdom’s strong economy. Saudi government continues to make
significant investments in construction projects that will bolster and diversify the economy.
Saudi Arabia is the largest economy in the region. Saudi Arabia’s construction sector is seen
growing by nearly three percent as major infrastructure projects continue to be built in the
Kingdom despite the impact of the global downturns. Saudi Arabia’s construction and
engineering sector is expected to be buoyed by government led infrastructure developments
plans and the need for more housing. The increasing infrastructure requirements of the
country’s growing population and stability of the banking sector have helped stimulate the
sustained growth of construction activities in Saudi Arabia. It is expected that Saudi Arabia’s
construction sector will continue to see positive growth during 2010, as the economy also
continues to expand and provide liquidity. The Kingdom’s construction and engineering sector
has proven far more resilient than that of its Gulf neighbors.
No reliable, published statistics are available on the ACE sector in Saudi Arabia.
Best Prospects/Services Return to top
Saudi Arabia stands apart from many of its regional peers as demand for infrastructure and
construction projects is fuelled by domestic demand. According to industry sources, more
than 285 civil construction projects, valued in excess of US$260 billion, are currently
underway or under design in Saudi Arabia. Industry sources expect an investment of around
US$400 billion over the next five years on various projects, seventy percent of the work is
government related.
A number of airports in Saudi Arabia are set for expansion, including the Prince Mohamed bin
Abdul Aziz International Airport in Madinah as the Kingdom gives more attention to the
upgrading airports. The transportation sector initiatives are continuing with the Kingdom’s
attempt to establish three new railway lines, the North-South, the Haramain high-speed
project and the Saudi Landbridge. The utilities sector has seen perhaps the latest activity.
The government approved Madinah power and water plant and the tender for a 2,000MW
independent power project in Riyadh. A contract was awarded for the Rabigh IWPP. The
industrial construction sector received a major boost with the awarding of engineering,
procurement and construction contracts of Jubail Oil refinery. Including Saudi Aramco, a total
of US$9.6 billion worth of contracts to develop the refinery in 13 packages will be awarded.
The construction sector has great potential for growth, as demand rises for residential,
commercial, housing and institutional construction. The housing sector, in particular, is likely to
grow, as the Saudi population is rising at a rate of 2.5 percent a year. Construction will also play
a large part in the Kingdom’s massive industrial expansion through the National Industrial
Cluster Development Program as well as in the completion of six Economic Cities. Saudi
Arabia’s government budget reflects the importance of ongoing growth in the construction