Saudi Aramco, PIF said to set up construction firm

Saudi Arabia’s Public Investment Fund (PIF) and state-run Saudi Aramco are planning to set up a “super contractor” in partnership with local and international contractors to undertake major infrastructure projects in the Kingdom, MEED reported on Thursday.

The new entity will replace distressed contractors, particularly Saudi Binladin Group and Saudi Oger, which have suffered financial difficulties in recent years and have been forced to scale back their operations.

Aramco, PIF, a local contractor, and an international contractor, will each own a 25 percent stake in the new entity.

No further information was provided on the capital of the new contractor.

At the end of September, Saudi Aramco and PIF received expressions of interest from seven local firms, namely Al-Mabani General Contractors Co., Al-Muhadib Contracting, Al-Rashid Trading & Contracting Co., Al-Yamama, Azmeel Contracting, El-Seif Engineering Co., and Nesma & Partners Contracting Co.

Meanwhile, 25 international contractors were invited to express interest.

State-owned PIF earlier this week unveiled plans to establish two development companies that will focus on increasing the capacity for pilgrims and visitors at the Kingdom's holy sites, Argaam reported.

Saudi Arabia’s construction sector has suffered heavy losses in the wake of the oil price crash, which led to payment delays and cutbacks in spending on major government projects.

The Kingdom’s contractors have laid off thousands of workers in recent years, and one of the largest companies in the sector, Saudi Oger, shut down in July this year.