FROM OUR CORRESPONDENT

12 August 2006

JEDDAH — Saudi Arabia is embarking on a number of new mega projects covering a wide range of industries, a bulk of them focusing on those sectors of the economy in which the Kingdom has comparative advantages such as oil and petrochemical industries.

According to the recently released Samba Financial Group's mid-year report about the Saudi economy, the total cost of projects currently under way or in advanced planning for execution over the next several years is about SR1.06 trillion ($283 billion). The oil and gas industry alone accounts for SR259b ($69b), or one fourth, of the total.

The group's General Manager and Chief Economist Brad Bourland explained that as against the previous periods of intense infrastructure and project activity, much of the current development is financed and owned by the private sector.

Defence and security purchases projects amount to SR183b ($48.8 billion), or 17 per cent of the total. Large real estate developments capture about SR150 billion ($40 billion), or 14 per cent of the total investments, followed by mining and minerals development with SR44.63 billion ($11.9 billion) of the total. Other small projects include public utility projects such as electricity, water, and transportation.

According to the Samba estimate out of the SR1.06 trillion in total project costs, some SR322 billion ($85.8 billion) or 30.3 per cent of the required funding will come from the general government budget. Aramco's project bill amounts to SR304 billion ($81 billion) or 28.6 per cent, but some of this is in joint venture with private companies.

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Posted by pichu at August 12, 2006 4:55 PM