© Royal Commission for Riyadh City
Saudi Arabia’s Vision 2030 is an ambitious plan for a new era of economic and social development. According to the chief economist of Cavendish Maxwell, Julian Roche, the Saudi policymakers, the World Bank and the International Monetary Fund all agree that medium-term growth will depend on three policy streams: to enhance the generation of non-oil revenues; to rationalise the country’s public investment programme; and to diversify its national wealth.
The first of these policy streams centres around the diversification away from hydrocarbon production to the service industry, such as banking, healthcare, education and tourism. The introduction of a tourist visa in September 2019 makes investment in tourism through hotels, resorts and theme parks even more likely. These services will be underpinned by the real estate and construction industries.
The second component of Saudi Vision 2030 is the Public Investment Fund Vision Realization Program that strengthens the fund – the "engine behind economic diversity" in Saudi Arabia. The fund is the client-body backing for projects in the region that are being referred to as giga projects, that is, projects designed to stimulate the economy. These include Red Sea, Qiddiya, Amaala, Al Ula and Neom projects, all of which are transitioning from the design stage to the construction phase this year.
Late last year, work began on the development of four Royal Commission for Riyadh City environmental projects in the city at a cost of $23bn, complementing the Saudi Vision 2030 Quality of Life programme, which aims to boost citizens’ participation in sporting and other environmental activities. These projects are the following.
At 13.4 square kms this is set to be the biggest park in the world.
These will be planted as part of the Riyadh Green project to create open, green areas in the capital.
This will be built as part of the Sports Boulevard well-being project, to encourage active and healthy living for local citizens.
This plans to be the world’s largest investment in public art to create a city "gallery without walls".
Another notable Riyadh City project is the Diriyah Gate Development, a 7.1m square metre project presently under construction, to preserve and celebrate Saudi culture and traditions.
The planned spend and unawarded construction contracts for these projects, and others around the country, will provide consultancies and construction companies with enormous opportunity.
Community bus stop, BRT project, © Royal Commission for Riyadh City
Pedestrian bridge, BRT project, © Royal Commission for Riyadh City
As part of the Saudi Vision 2030 reforms, Saudi’s Ministry of Labour and Social Development decreed that a certain number of Saudi nationals must be employed by private sector companies to meet its Saudisation – known as Nitaqat – commitments to reduce unemployment. This will affect the construction industry, which fills most of its relevant graduate quantity surveying roles with professionals from the Philippines, India, South Africa and other Middle Eastern countries, such as Jordan and Egypt.
The significant challenge for local and foreign consultants and contractors to reach the required level of Saudisation is compounded by the fact that the main Saudi universities at present do not offer RICS-accredited quantity surveying courses. Saudi graduates are often educated in Europe, particularly the UK, and the USA. There is also a lack of recruitment agencies specialising in Saudi nationals. It is not unusual for graduates from a technical engineering background to change career paths and switch to the quantity surveying profession.
As an example, Muna, a Jordanian national and a 2019 architectural engineering graduate from Alfaisal University in Riyadh, chose to take up a position of assistant analyst with a foreign construction consultancy because of her interest in quantity surveying and the shortage of qualified Saudi national quantity surveyors.
In my role as a contract manager to the Royal Commission for Riyadh City, to which I am seconded by Currie & Brown, a development company with a progressive approach to Saudisation, I welcome the strategic deployment of Saudi national graduates, from disciplines such as architecture and structural and civil engineering, in key positions on projects. Their integration with the design and supervision consultants as well as qualified and chartered professionals under a structured training programme for professional development is supported by knowledge transfer and mentoring. Many of the graduates are expected to administer the technical matters that arise – including specification, drawings, progress of works and municipality requirements – and provide drafts of any formal correspondence to contractors for my review, providing them with a rudimentary insight into the function of quantity surveying and its role on the project.
In 2018, RICS created the Kingdom of Saudi Arabia (KSA) Working Group: a group of RICS members aiming to promote the adoption and recognition of international standards, while supporting the development of RICS members based in Saudi Arabia. The number of Saudi-based candidates is growing each year and the first APC assessment was held in in 2019.
Station, BRT project, © Royal Commission for Riyadh City
The principal cultural difference between the West and KSA that affects the construction industry in Saudi Arabia is the application of Sharia law, a canonical law based on the teachings of the Quran and the traditions of the Prophet Muhammad. The law of the land, where statutes and legislation are referred to as regulations rather than laws, are however predominantly based on Western precedents. For example, the Public Works Contract – known in other circumstances as the General Construction Contract – that is used on all Saudi government public works’ construction contracts is based on the third edition of the International Federation of Consulting Engineers’ (FIDIC) Conditions of Contract. FIDIC was formed by engineers in Belgium, France and Switzerland, and this particular contract is based on the Institution of Civil Engineers’ Conditions of Contract.
The Public Works Contract would be acceptable to most international contractors, as long as it allows for settlement of disputes through arbitration. The contract refers dispute resolutions to the Saudi Board of Grievances, which came into effect following the ban on international arbitration by a ministerial decree in 1958 and has jurisdiction over international commercial matters. The Board of Grievances reviews applications for dispute resolution and enforces compliance with Sharia, but this has been found to be a lengthy process.
Terminal building, BRT project, © Royal Commission for Riyadh City
Station interior, BRT project, © Royal Commission for Riyadh City
The Royal Commission for Riyadh City is developing a bus rapid transit (BRT) project. The BRT transport and community bus system will provide the residents of Riyadh with a public transportation system for effective passenger mobility and experience. Once complete later this year, it will provide an integrated bus service throughout the city – its function and design is intended to be complementary to the Riyadh metro.
In parallel, Saudi’s Royal Commission, made up of several influential Saudi dignitaries, is constructing a transport control centre to provide a single point for operational interfaces for the BRT and Metro systems and to provide a high level of customer service. The BRT project will be an important pillar of the framework developments of Saudi Vision 2030.
I am responsible for administrating the construction contracts on the BRT project. This involves preparing correspondence on behalf of the client for the effective administration of all contractual matters and change order entitlement to conform with the conditions of the Saudi Public Works Contract form, ensuring that the client’s contractual rights, obligations and position are correctly considered in all project-specific decision-making. This includes the review and settlement of contractors’ delay claims and the resolution of disputes through equitable resolution, avoiding arbitration.
There is a wide range of opportunities in Saudi Arabia, both for construction professionals to thrive and best quantity surveying practice to be embedded into the project management processes as part of Saudi’s Vision 2030 programme – and to influence this new era of growth.
Ann Bentley FRICS 31 May 2023
Dominic Doig FRICS 24 May 2023
Dr Andries van Heerden, Dr Mostafa Babaeian Jelodar, Dr Gregory Chawynski and Sean Ellison 17 May 2023