The Saudi Contractors Authority (SCA) was established through Saudi Arabia’s Council of Ministries resolution No. 510 dated 23/11/1436H with the aim of organising the kingdom’s contracting sector and driving development in the nation’s construction industry.
In an exclusive conversation with Construction Week, the governor of the Saudi Contractors Authority, Eng Thabet Mubarak Al Sawyeed, said: “When we started the authority, the very first thing that we focused on was the development of a very comprehensive strategy for the authority. We began with the idea that our services and activities need to be aligned with the needs of the construction and contracting sector.”
“As part of the strategy, we evaluated the challenges that the stakeholders are facing, as well as their aspirations – what they aim to see and achieve in the sector.”
The authority also evaluated the benchmarks and best practices of similar organisations worldwide as it set out to implement Vision 2030.
The SCA has set forth 34 initiatives geared at boosting Saudi Arabia’s contracting sector.
The initiatives have been broadly classified under three categories:
Al Sawyeed said: “The first set of initiatives are internal, which include establishing ourselves as an entity; developing internal bylaws; hiring the required resources; getting our offices in order; handling our marketing and communications, etc.”
“The second set of initiatives are regulatory in nature. This involves streamlining the contracting sector and ensuring that it is regulated.”
“The third set of initiatives are value-added services, which include optional services offered to the contractors that can help enhance their businesses.”
The SCA has completed its first “internal” phase of development, and has already begun moving forward with regulatory and value-added services.
The SCA has conducted a study on regulating the nation’s contractors, and has begun implementing a framework to license individuals and entities that are active in the sector.
Al Sawyeed said: “The authority also worked with the Saudi government on the tendering and procurement law, which came into effect recently. Next year, we will be working on new governmental contracts, which will help develop fair agreements that reserve the rights of both parties, including the government as a customer, as well as the contractor and other entities.”
“As we speak, we have also started another initiative – consultancy services – through which we will provide consultation to the small and medium contractors. They will always have us to refer to – whether for legal, technical, financial, or other forms of advice.”
In November 2019, the SCA launched a statistics and publication initiative, which offers insights into a wide range of data that was previously unavailable to everyone within the sector.
“The statistics include the number of companies working in the sector; their distribution; segmentation; the number of people in the sector; the type of projects implemented in the past; as well as a price index, which is a reference model for prices,” Al Sawyeed said.
Future Projects Forum 2020
One of the SCA’s prime initiatives launched in 2019, which it intends to better in 2020, is the conferences and exhibitions initiative.
As part of the initiative, the SCA will promote the second edition of the Future Projects Forum (FPF), as well as the International Contracting Conference and Exhibition (ICCE).
The first edition of the FPF witnessed the participation of 23 government and private entities, showcasing more than 600 projects worth more than $120bn (SAR450bn).
Commenting on the success of the event, Al Sawyeed said: “We had representation from all the major projects related to Vision 2030, including Al Qiddiya, NEOM, Amaala, and The Red Sea mega-development, among others. We had all the major firms at the conference, including Aramco, SABIC – the largest oil and petrochemical entities in the world – as well as Maaden and the Royal Commission for Jubail and Yanbu.”
“FPF 2019 did so well that satisfaction levels lifted to 93% among attendees. One of the presenters experienced applications to its tenders rise by as much as 500%. Due to the huge demand that we got at the first event, we have scaled up the venue for the second edition of the event.”
The 2020 edition will be capable of accommodating twice the number of attendees, compared to FPF 2019. The SCA has also, correspondingly, scaled up the number of participants from 23 in 2019 to 35 for FPF 2020.
“At the moment, 31 entities have confirmed their participation, while four others have made a reservation, so we’re close to full capacity in terms of presenters. In addition, 45% of the seats for the 2020 event have already been reserved. Going by the current demand, all of the seats and tickets will be sold out over the next few weeks, which gives an indication of how well the industry and its stakeholders have perceived the event,” Al Sawyeed said.
“I have just completed discussions with the embassies of various governments who will bring the top contractors from their nations to the event.”
FPF 2020 will also welcome facets that were not on offer in its inaugural edition, including the signing of agreements, and the announcement of new projects during the event.
“We have already been approached by entities who are interested in announcing partnerships and project awards at the event. Certain government entities will also be holding dialogues with contractors at the event.”
“This is an event that no one should miss. Within two days, you’ll get a complete overview of all the mega-developments and major projects that have been planned for the next three years and are ongoing in Saudi Arabia. You will get to meet the top governmental entities, representatives from the top firms, all the major Saudi Arabia contractors, and you will receive information and visibility on the latest project announcements. This is also a golden opportunity to network with peers, colleagues, and all the key stakeholders in the sector.”
Meanwhile, the ICCE 2020 will provide a platform for contractors and interested parties to share experiences, knowledge, best practices, and build relationships to work on future projects in Saudi Arabia.
Training Takes Precedence
The SCA will also focus on training in 2020. It has launched programmes that have begun to serve more than 500 beneficiaries.
Al Sawyeed said: “Next year, we are going to introduce more training packages. Any participant or company attending the training sessions will receive credits based on the number of hours spent on the programme, which will be used to demonstrate the value and capabilities of the individual or the firm in the future.”
Overcoming Known Hurdles
One of the key challenges that contractors in Saudi Arabia face lies in payment delays within the sector.
Al Sawyeed said: “We have worked with the government to identify the causes of such delays. We have identified certain shortcomings, and have begun to put processes in place to ensure significant improvements to curtail any sort of payment delay.”
“We have worked closely with the Ministry of Finance to ensure transparency on the procurement and payment cycle.”
“We have also been part of discussions at the highest level to ensure that the obstacles being faced on the ground are dealt with and considered while making the decisions, and passing new laws.”
Another key challenge that the SCA is addressing is localisation of jobs. The authority is not only helping Saudi citizens get the right jobs, but is also reviewing the complexity of each contracting position.
“We have worked heavily to identify specific categories of jobs that can be filled by Saudi nationals. In addition, we have developed a training and development programme that will improve the knowledge and experience of the kingdom’s citizens.”
The SCA has addressed key skill gaps; issues surrounding continuous learning; and the need for contracting companies to improve their capabilities, through its updated training programmes.
Visas for the Win
There are two key aspects of new visa regulations that has reshaped the kingdom’s construction sector.
“We need to understand the changes that are being put in place in terms of labour, as well as in terms of investors and business partners,” Sawyeed said.
The Saudi Arabia contracting sector has been a labour-intensive market for a long time. Contractors have been relying on a large number of labourers, professionals, as well as a skilled- and semi-skilled workforce.
“One of the main challenges facing the government was to ensure that the right type of visas were allocated to the contractors. The recent move by the government to raise fees on the number of visas in this category has helped the government ease regulation because contractors will only be able to apply for the number of visas that they actually need, given that having and keeping employees and labourers who are not adding value has become too costly.”
“On the other hand, we have also seen significant improvement from the government’s decision to open up long-term visas and added benefits for business partners and investors.”
“This has improved communication and eased travel for those looking to boost Saudi Arabia’s contracting sector. We will continue to improve conditions for a smooth flow of people, material, and all the essentials needed to tap into Saudi Arabia’s potential.”
For more information on the FPF, visit http://www.saudifpf.com.
For details on the SCA’s initiatives, visit https://muqawil.org.
For information on the SCA’s strategies, vision, mission, and its future announcements, visit sca.sa.