Development projects in Saudi Arabia are not being deferred, contrary to press reports and speculation by some quarters of the foreign business sector, according to the chairman of one of the ten top leading construction and engineering companies in the Eastern Province. Abdul Mohsen Al-Moushegah, chairman of the Al-Moushegah Group, said development projects in the oil, gas, petrochemical and energy sectors, as well as mega economic projects, are being pursued. “What is being done now is that Saudi Aramco, SABIC, and other mega projects proponents are undertaking pricing review of their projects, but are not deferring or stopping projects that are already on stream,” he said during the signing of an agency agreement between Supply & Support Services Systems Co., Ltd. (S4), a local suppliers of products and services for the energy sector, and Lindner AG of Germany here, Thursday. “Due to the current economic downturn, which has not deeply affected the Kingdom, our local companies are now taking the opportunity to reschedule their projects in anticipation of the turnaround of the global economy hopefully by the end of 2009,” he said. Moushegah said that there is no hurry for these projects to be completed, and because of the financial crisis now, their costs need to be re-evaluated. He said current Saudi projects involved billions of dollars, a huge amount that requires re-evaluation in the face of the global economic downturn. “It is my understanding that proponents of big projects in the oil, gas, petrochemical and other economic sectors are looking for about a 40 percent reduction in costs of already signed projects,” Moushegah said. He said suppliers of building materials have already reduced their costs, which were priced much higher before the global economic crisis set in. Moushegah said the $8 billion Jubail Refinery is not being deferred or delayed. He said the contract has already been signed and that the project is set to start by March this year. – SG “There will be 11 packages for this particular project, probably 11 companies will get one package each, and 22 subcontractors will be tapped to support the project,” he said. He said the Saudi government is also spending more to support ongoing projects, a move that will be beneficial to future projects. “We expect that government spending will continue to grow, which will help the private sector to survive the crisis,” he added.
