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INFRASTRUCTURE


MAPPING OUT THE KINGDOM’S FUTURE


Saudi Arabia’s commitment to delivering a world-class infrastructure is moving ahead at breakneck speed with road, rail, air and seaport projects jostling for space alongside groundbreaking power and energy initiatives as the country maps out its future economic potential.


As the cornerstone for future economic development across all industry


sectors, Saudi Government commitment to infrastructure development is ambitious to say the least. Under its new five-year infrastructure development budget, which was revealed in August 2011, the country plans to spend US$385 billion in building a world-class infrastructure, which includes transportation, energy, utilities, education, healthcare, and commercial, residential and tourism development. According to Business Monitor International’s (BMI) Saudi Arabia


Infrastructure Report Q3 2011, the Kingdom has the most dynamic infrastructure market in the GCC, with an infrastructure project pipeline in excess of US$100 billion. Te main drivers behind increased infrastructure spend in the country


are forecasted population growth and the recent rise in oil revenues which has presented a timely opportunity to plough funds into key need sectors. The Saudi Government is also looking to attract continued inward investment for future economic diversification and, in 2010 alone, awarded


US$150 billion of related contracts, almost two-thirds of which were non- oil and gas related. Affordable housing, industrial zones and road and rail developments


are leading the way in terms of Government spend. With the largest real estate market in the GCC, a swathe of new industrial cities are also springing up and transportation links are undergoing significant expansion in order to boost logistics and industrial activity. The Saudi Arabian General Investment Authority (SAGIA) is also supporting Government investment by streamlining regulations to encourage new business development and the Kingdom’s attractiveness as a regional hub. Te BMI report states that, from an investor perspective, this has


generated considerable interest from companies looking to gain a foothold in the market, which in turn is leading to increased competition for contracts. Te country’s significant project pipeline has led to an optimistic outlook for growth over the medium term with an average annual growth of 3.97 per cent forecast for the period 2012-2015. Te International


28 I CITYSCAPE I NOVEMBER 2011


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