A 30 to 40 percent fall in construction costs in Saudi Arabia is speeding up the development of Saudi Arabia’s Economic Cities. Although the economic downturn has lead to the shelving of a number of major projects elsewhere in the world, it has led to a significant opportunity for Saudi Arabia’s Economic Cities to develop at an increasing rate.
Amr Al Dabbagh Governor of the Saudi Arabian General Investment Authority (SAGIA) said in an interview at the InterAction Council meeting held last week at the King Abdullah Economic City, “The global economic slowdown has presented a great deal of opportunities including depressed prices of building materials and surplus capacities in construction companies, equipment and human capital. All these challenges were there six months ago but now we are talking about a cost advantage for construction between 30 and 40 percent. Now the challenge is how much we can do in 24 hours a day, seven days a week.”
Saudi Arabia is diversifying its economy beyond oil and is still seeing growth in foreign direct investment (FDI) from companies who see Saudi Arabia’s stable economy an attractive destination for long term investment. The Governor added that, “Saudi Arabia is the most cost effective production location on the face of the earth for energy intensive industries and a great launch pad as a hub between east and west to cater to 250 million consumers within 3 hours flying time from the center of Saudi Arabia.”
The King Abdullah Economic City, the largest of Saudi Arabia’s economic cities, is ahead of schedule to complete its first phase of construction by 2012. The city played host to the InterAction Council’s 27th annual plenary meeting last week. The Council comprises former heads of state and distinguished statesmen and women who gather annually to discuss world issues. The three main global issues on this year’s agenda were; “Energy Availability and Economic Growth”, “How to Prevent a New Cold War” and “The Present State of the World.”