Firms eye building boom in Saudi Arabia
IRISH construction companies prepared to do business in Saudi Arabia got a boost yesterday when the kingdom approved a long-delayed overhaul of the country's mortgage laws, which is expected to spark a $82bn (€57.4bn) building boom.
The decision, which has been forced by the unrest sweeping the Middle East, is aimed at solving Saudi Arabia's acute housing shortage. King Abdullah Bin Abdulaziz is only one of many leaders to raid state coffers in order to stay in power.
"Plans that have been in the pipeline for 10 years are happening overnight because of the realisation of the need for change," said Alexis Antoniades, assistant professor of economics at Georgetown University's school of foreign services.
The Construction Federation of Ireland and Enterprise Ireland have already devised courses to help Irish construction companies export their services. Many project managers and architects have moved to the Middle East since the recession here and some are commuting home every few weeks, CFI spokesman Martin Whelan said yesterday.
He added that the Government here should create some kind of guarantee to help Irish companies compete against foreign companies, which get a guarantee from their governments when bidding for large contracts.
Dublin also has the potential to become a knowledge centre for the sector. "In the past we exported labour, now we should export expertise," he added.
Sweden also said yesterday that it had a housing shortage that needed to be addressed.
Saudi Arabia plans to spend an extra $67bn to build 500,000 homes, on top of a $15bn plan announced earlier this year.
Shares in Saudi Arabian construction companies have risen recently on the back of the news but did not gain yesterday because the stock exchange was closed for a religious holiday.
Saudi Arabia's population has quadrupled over the past 40 years to 28.7 million people, creating a growing housing shortage. The Arab world's largest economy needs to build 900 homes a day over the next five years to meet demand, Jones Lang LaSalle said last month.
"Housing is one of the fastest ways to redistribute wealth to the people," Mr Antoniades said. "It would also employ a lot of people, creating a movement in the economy."
Saudi Arabia's economy is likely to grow 5.5pc this year on higher oil output and state spending, Banque Saudi Fransi said this week.