SOME investors hesitate to invest in a public sector housing project if they are not assured that these housing projects are attractive for people and all services are provided at the location. In addition, providing the needed workforce at low cost is yet another major challenge contractors are facing, an official at the Ministry of Housing said. Acting manger of Housing Department in Makkah region, Husain Al-Zahrani elaborated that the private sector tends not to partner with the public sector due to absence of information and guarantees and also because some locations are far from cities that makes them not so attractive and which demands further funds. He added that the absence of a clear strategy at the ministry remains a real challenge to investors. "The risk factors are which the private sector uses to make decisions on participation in these projects," he elaborated. The public sector he noted is working toward building strategic development cooperation with the private sector. The official was speaking at a meeting organized in Jeddah by the real estate committee of the Jeddah Chamber of Commerce and Industry (JCCI) with participation of over 50 investors in this sector. The goal was to address the partnership between the private and public sector in the housing industry. Al-Zahrani noted, in his presentation, that the private sector is capable of providing liquidity and employ the financial factor to increase profit and provide more job opportunities for the Saudi youth. He added that the private sector is capable of implementing projects as long as there is no bureaucracy, which he said is an obstacle to implementation of projects and to creativity as well. The private sector he stressed is capable of elevating the quality measurements and enhancing the qualifications of local staff. According to him management in private sector surpasses that of the public sector as it focuses on productivity and competition. The public sector, he added, has the capital and is hoping for the development of the real estate sector and therefore further channels of cooperation are there for the two sectors to cooperate. He noted that the real estate fund has anticipated that some 1 million people will benefit from the housing projects. The public sector, added Al-Zahrani, is capable of easing the process of providing services to the project locations and easing the challenges facing them. However, he said, that the legislations are the main obstacle facing the development of cooperation between the two sectors. Therefore, he called on setting new legislations that are flexible and can be implemented fast and based on high standards. The official classified the lands in the Kingdom to lands that are appealing to residents, lands that are far away and people do not want to move to them, huge lands that are owned by the private or public sector and might not be used or invested, and slums that need strategic development. The main factors attracting investments in lands are having the needed services including electricity, education and health care. Further factors, he said, include having the fund and setting up feasibility studies. Al-Zahrani noted the real estate product needs to be appealing to the public and guarantees are provided to them. The fluctuating real estate prices, he added, is a risk factor in this sector. The head of the committee Khalid Al-Ghamdi stressed the importance of providing housing units for all Saudis as it is considered a necessity for all locals. He also highlighted on the fact that housing projects, which are being constructed in different regions of the Kingdom, demand further cooperation between the private and the public sector.
