Riyadh Metro contractor says project won’t meet deadline

Saudi Arabia’s construction sector has been facing setbacks for almost two years now as the government cuts back on spending amid a global oil price slump. Despite the challenges, Greece-based Consolidated Contractors Company (CCC) has managed to bag major projects in Saudi and the region, such as the Riyadh Metro and Emaar’s Dubai Opera. Samer S. Khoury, president for engineering and construction at CCC, talks to Argaam about the company’s plans, project delays, and declines in new contracts.

Q: What are some of your most notable projects in Saudi Arabia and the United Arab Emirates?

A: We have the Riyadh Metro project worth $7 billion. For this, we are in a consortium with Bechtel and Almabani. Then, there is Saudi Aramco’s Jizan oil and gas project worth $1.5 billion.

In the UAE, we have the contract for Abu Dhabi Airport, which is a $3 billion project in Joint Venture with TAV and Arabtec. There is also the contract for Emaar’s Dubai Opera.

Q: The Saudi government has been keen to keep the Riyadh Metro project on track. Will the project meet its 2019 deadline?

A: We are around 30 percent complete and we will finalize the 20 kilometers of tunneling this year. However, the challenge is to complete the 38 stations on time. Due to several changes, the Riyadh Metro will not be completed in 2019. We are, however, working with the client to mitigate delays.

Q: How does the first half of 2016 compare to the same period last year, in terms of new contracts?

A: We have been awarded around $1 billion worth of new projects this year, which is 50 percent less compared to the same period last year.

Q: The past two years have been tough on the construction sector in the GCC. Is the situation changing now?

A: The situation is still tough, but we hope that with the increase of the oil price lately, new tenders will be awarded and clients will go ahead with their delayed payments.

Q: You spoke earlier about diversifying the company’s portfolio away from oil and petrochemicals-related projects. What are your reasons behind the change?

A: We are a very flexible and diversified company.  We do oil and gas as well as all sorts of civil projects. When one sector slows down we pick projects up from the other sectors. We are looking to increase our presence in rails, metros, airports, and ports.

Q: What are some of the upcoming projects in Saudi Arabia that CCC would be interested in?

A: We are focusing on other oil and gas projects with Saudi Aramco and also looking at some mining projects.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com