The head of the Saudi Contractors Association during a remote meeting organized by the Asharqia Chamber
Al-Afaliq: The contracting sector is moving towards change and technological development and the elimination of cover-up
The Chairman of the Board of Directors of the Saudi Commission for Contractors Eng. Osama bin Hassan Al-Afaliq confirmed that the authority is working on a number of initiatives through which it seeks to continue work in organizing the sector, and develop its activity, pointing to the model contracts initiative and various professional consulting services.
Al-Afaliq said during a remote meeting organized by the Asharqia Chamber represented by the Contracting Committee on Tuesday evening, July 21, 2020, entitled "The impact of the Corona pandemic on the contracting sector", and moderated by a member of the Board of Directors of the Asharqia Chamber and Chairman of the Committee Hamad bin Hammoud Al-Hammad, that the authority is continuing to improve the work of the contracting sector in the Kingdom and the development of its tools and the mechanism of work in it, pointing out that the sector suffers from many distortions, perhaps the most prominent of which is covering up, indicating that contractors should arrange their conditions and register in the authority to take advantage of the initiatives offered by the authority, and contribute to mitigating the effects of the Corona pandemic on contractors.
Eng. Al-Afaliq also praised the urgent government initiatives launched by the government of the Custodian of the Two Holy Mosques, which targeted individuals, private sector establishments and investors, and the value of these initiatives exceeded 214 billion riyals, such as the Sama program, which amounts to 50 billion riyals, to support the private sector and specifically small and medium-sized companies that included postponing dues For 6 months and to provide soft financing to her, Sama also announced pumping 50 billion riyals to enhance the liquidity of the banking sector and enable it to finance the private sector. The Ministry of Human Resources launched several initiatives during the Corona pandemic period, during which we hope to end some requirements that directly affect the construction sector, the most important of which is the financial compensation. The contracting sector also hopes to review the process of paying the value-added on government projects, which are paid before receiving dues from the country due to its negative impact on the financial flows of contractors.
Al-Afaliq indicated that the contracting market in the Kingdom witnessed a slowdown due to both the Corona pandemic and the decrease in the price of oil, which led to a significant decline in the award of projects due to the impact on existing projects, and the impact of 2020 will be reflected on 2021/2022 with the completion of existing projects, and this is what calls the belief that new large-scale infrastructure projects are being impacted, with major impacts occurring on the construction industry, and the Corona pandemic has exacerbated many of the current organizational, financial and labor challenges for Saudi contractors, pointing to a survey conducted by the Saudi Contractors Association that covered 365 contractors in the fourth quarter of In 2019, in the organizational aspects, the sector suffers from a complicated regulatory system, the inefficiency of the rehabilitation and implementation process, the slow resolution of disputes, in addition to the ongoing organizational amendments, weak contracts and their lack of neutrality.
As for the financial aspects, they are represented by late payments, difficulty in financing from banks, weak skills in accounting and finance jobs, and the fluctuating cost of supplying materials.
On the workforce side, the contracting sector suffers from an increase in the cost of labor, a decrease in attractiveness to skilled labor, the limited interest of the local workforce in this sector, and long wait times to obtain work permits.
As for the tenders, they are represented in the difficulty of reaching tenders for the subcontractors, the unbalanced evaluation of offers, the lack of realism or clarity of requirements in the requests for proposals, in addition to submitting contractors to tenders greater than their actual capabilities.
On the technology side, the difficulties lie in the reliance of some large contractors on traditional methods, lack of awareness of the benefits of technological tools and machinery, and the low use of technological tools.
Al-Afaleq indicated that the Corona pandemic added new challenges to the contracting market in the Kingdom, where a survey conducted by the authority in the fourth quarter of 2019 obtained 609 complete answers, that the impact on cash flow was affected by 90%, and the delay or interruption of projects was affected by 86%, and interruption In the supply chain, it was affected by 70%, pointing out that 86% of employees in the sector have no plan.
Al-Afaliq continued by saying that the authority faced the effects of the pandemic by continuous communication with the sector through a special electronic platform established by it aimed at informing the contractors of the developments and modern issuances, in addition to creating a private mail that receives all the comments and complaints of contractors, and the establishment of a number of training courses that clarify the road map during the crisis, He said that the sector is moving towards development and eliminating cover-up and technological transformation and that the contracting sector employees must absorb this and quickly benefit from the authority's initiatives that will work to provide them with assistance in all disciplines.