In a workshop in Asharqia Chamber today, "Municipal Affairs" sets mid-July as the date for the launch of the new classification system of contractors.
The Ministry of Municipal and Rural Affairs, represented by the Contractors Classification Agency, has identified the second half of the month of Shawwal (July 2018) as the date for the launch of the portal of the new classification system for contractors. It aimed at promoting the construction sector through new standards. This came during a workshop organized by the Agency on Tuesday morning (10 April 2018) at Asharqia Chamber in the presence of the Chairman of the Board of Directors of Asharqia Chamber, Abdul Hakim Al-Khalidi, the Board member, Hamad Al-Hammad and Saadoun Al-Khalidi, and a group of investors in the construction sector.
In a detailed working paper, the Advisor for Achieving Goals in the office of the Minister of Municipal and Rural Affairs, Engineer Bandar Al-Qahtani, said that the classification is "an indicator to determine the contractor's ability and competence in line with his own financial, technical, administrative, and executive potentials." He explained that the new system includes all activities related to the contracting sector such as implementation, maintenance, operation, and public services. He added that the system aims at integrating all contractors in the classification system, motivating them to continuously improve their performance, achieving sustainability in performance, thus stimulating and improving the performance of the construction industry in the Kingdom through the use of performance and efficiency information, and reflect the real capacity of contractors.
He said that the new system is the first line of defense for the owner, as the contractor is a producer, thus producer is required to develop itself and its product. So the benefit of the system is inclusive of all the beneficiaries even a simple citizen can benefit from the classification system. He pointed out that the old system of classification played its role in the fullest at a certain stage. However, with the development witnessed by the country in various areas, there is a need for the improvement of the system by adding new standards and modern mechanisms of work.
Al-Qahtani mentioned that the Ministry is looking forward to the presence of a contractor who can read the future, and be able to cope with fluctuations, and fall within the ratings.
He pointed out that the classification ratings in the previous system were five, and a sixth one was introduced now to support small and medium enterprises and all non-classified institutions in order to qualify them for the intervention of the classification system. This has been done in coordination with the General Authority for Small and Medium Enterprises. An excellence grade has also been added to cover the large projects that require contractors with high capabilities and competencies. He added, "We seek to motivate contracting companies to become public shareholding companies."
Al-Qahtani stressed that the Ministry has maintained contact with all concerned governmental agencies and entities, as well as with large companies such as Saudi Aramco, SABIC, and Saudi Electricity Company. This communication with them contributed in defining the new classification criteria. The legal standards include the record, the establishment of contracts and licenses that are required including employment. The financial standards include net fixed assets, turnover, and contract revenues. Technical standards include the working body, projects, management, quality, health, safety, environment, and the performance of the contractor in the previous period. He also stressed that each criterion is made under certificates identical to it.
Al-Qahtani mentioned that the classification is related to the commercial register. The information in the register is the same in the classification without any increase or decrease. The contractor can develop himself and fall within the classification ratings, which are obtained according to the elements that conform to the criteria.
The Ministry's job is to follow up the contractor and not to censor it; its aim is to motivate it to get the highest grades in this regard. A classified contractor will enter a system of evaluation and if his situation improves, he will continue to score or move to a higher level, or he may face some obstacles that may lower him to a lesser extent.
Hamad Al Hammad, a member of the Board of Directors of Asharqia Chamber, said that the national economy is following a comprehensive reform plan launched by the Kingdom's Vision 2030. It is based on the restructuring of the national economy in line with the global institutional and regulatory requirements in order to build a diversified and sustainable economy based on solid foundations. He pointed out that the new contractor classification system launched by the Ministry of Municipal and Rural Affairs was aimed at motivating Saudi contractors to improve their performance and raise the transparency and sustainability practices of their businesses. It considered as a serious step towards the sustainability of the construction industry in the Kingdom to become an added value in the national economy.
Al-Hammad added, through holding this workshop, Asharqia Chamber, in cooperation with the Ministry of Municipal and Rural Affairs, is aware of the importance of educating the contractors about the mechanisms as steps to be taken to improve their performance, raise their practices towards institutional work, raise the importance of achieving a high level of performance, and professionalism at all levels of classification. He described the new classification system as a qualitative initiative that seeks to regulate the work of the Saudi contractors through motivating them to exercise the accounting, financial, and organizational principles, enabling them to attract technical and administrative cadres, and to raise their efficiency and improve their performance continuously.
The consultant of the contractor's classification agent, Engineer Hamad Al-Shawish, said that the new systems in the classification of contractors will contribute to the reorganization and structuring of the work of contractors and consultants in line with developments in the Kingdom in various fields, especially in the construction sector, which is one of the most important sectors that contribute to growth rates in GDP.
He added that the initiative to develop the system of classification of contractors, which would be launched by the Ministry of Municipal and Rural Affairs in the month of October, aims to motivate Saudi contractors to improve their performance and raise the principle of transparency and sustainability. The participation of the construction industry in the classification system is under the National Transition Program 2020.
He pointed out that the Ministry -through this system- has developed the current classification criteria, improved the adoption of classification procedures with greater transparency, accuracy, and simplification, and added the fields of comprehensive and compatible classification with local and global systems.
The aim of all this is to develop the performance and sustainability of the construction industry in the Kingdom. It could be done through the presence of contractors with a high level in all grades of classification, providing a professional work environment for their activity, the quality of the implementation of the work according to international standards, raising the efficiency of project implementation, encourage contractors to improve performance on an ongoing basis, as well as maximizing the benefit of state budgets and reducing errors.
This reflects the positive outlook on the construction industry in the Kingdom.
In conclusion, the member of the Board of Directors of Asharqia Chamber, Hamad Al-Hamad, honored Eng. Bandar Al-Qahtani with a commemorative shield.
