Saudi Arabia: Delayed public projects 'worth $267 billion'

Saudi Arabia: Delayed public projects 'worth $267 billion'
3 min read
16 Sep, 2015
Blog: Despite huge government spending on public projects in Saudi Arabia, most ministries face a large backlog of delayed and stalled projects, according to reports.
Only 25 percent of projects are completed on time [AFP]
Despite huge government spending on public projects in Saudi Arabia, most government ministries face a large backlog of delayed and stalled projects.

According to government figures, only 44 percent of projects approved by the government in the past five years have been completed - due to weak government oversight and delayed payments to implementing companies.

The Saudi government spends 38.5 percent of its annual budget on public projects and estimates put the cost of the 672 stalled projects at $267 billion.

According to the Ministry of Municipal and Rural Affairs, an approximate 85 percent of government projects have missed their completion deadlines, with 64.2 percent of those projects being stalled in the execution stage and 23.8 percent being stalled in the planning stage.

Mismanagement

The National Anti-Corruption Commission in Saudi Arabia said that public projects had been delayed due to four reasons:

     Hundreds of projects are delayed due to suspicions of corruption and nepotism, officials allege

"The planning, design, oversight and execution of government projects suffer from negligence, violations and bad implementation," which adversely affect the projects, said Abdullah al-Abdul Qader, the deputy director of the National Anti-Corruption Commission.

However, the director of the commission, Khaled bin Abdul Mohsen al-Muhaisen, told al-Araby al-Jadeed that his organisation had discovered hundreds of projects have been delayed due to suspicions of corruption and nepotism.

"The reason for projects being delayed and stalled is a lack of planning and a lack of a clear vision at the study and design stage, in addition to inadequate information being prepared about the projects before opening them up to public bids," said Muhaisen.

"However, the most import reason is awarding projects to contractors who already have stalled projects, especially when the projects are beyond their technical and financial capabilities."

Unqualified contractors

According to economist Yazid al-Rashed, "more than 70 percent of contractors awarded government projects are unqualified to carryout the work tasked to them, especially in rural areas".

Rashed added that only 25 percent of government projects had been completed within their specified time.

     More than 70 percent of contractors awarded government projects are unqualified to carry out the work
- Yazid al-Rashed

However, Mohammad al-Nuaiser, an economic analyst, believes the problem is caused by the government's penny-pinching, which leads to projects being awarded to the lowest bidders that usually lack the capability to implement the projects.

"Many government departments also lack the specialism to oversee and receive the projects, which incurs huge losses to the economy," he added.

Nuaiser believes that the government should make quality of work and not price as the standard in accepting project bids.

The Mufti of Saudi Arabia has recently entered the debate on stalled public projects by issuing a religious ruling that condemns the change and alteration of contracts and public bids, in addition to condemning the inadequate implementation of projects.