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Billions lost in stalled projects
Published in The Saudi Gazette on 14 - 11 - 2008

Every year, the government approves hundreds, and sometimes thousands, of new development projects worth billions of riyals destined for rural areas. The hopes of locals, however, are soon dashed as companies sub-contract out the work and then what is known as the “tortoise” phase begins.
As deadlines come and go without any sign of work being completed, the buck is passed from officials to contractors to subcontractors, each in turn blaming a variety of factors, such as a rise in the price of raw materials or the cost of labor, until the works become no longer merely stalled, but effectively dead in the water, incurring vast losses of funds.
Abdulaziz Al-Khodairi, the Makkah governorate undersecretary says that in the province of Makkah alone there are projects worth billions of riyals which have not even started. He cites SR3 billion-worth of Ministry of Health projects awarded to major contractors who then subcontracted them out to smaller companies until the details of any given plan become ever more obscure and responsibility ever more diffuse.
The situation is not much different in Taif. Hisham Al-Zeer, head of the municipal council, points to the Taif-Baha Highway, and the Oqbat Al-Muhammadiah Project which saw its foundation stone laid seven years ago by then Crown Prince Abdullah.
Al-Zeer says that contract bidding does not demand of companies all the details and information that are necessary to make a reasonable estimation of a project's worth and timescale.
“Contractor bids should include not just financial tenders,” Al-Zeer says, “but also technical ones so that a comparison of prices can be made once the best technical tenders have been selected. This would ensure that the contractor has an intimate knowledge of the project and would be capable of execute it to the required standard. Some contractors do not even know what their expenses will be before making an offer.”
Higher penalties
Ahmad Bin Nasir Al-Obaikan of Tourism Development in Taif calls for greater penalties on contractors for delays and the canceling of their permits, noting that the current 10 percent deduction imposed on companies is no longer enough for those who “does not care.”
Al-Obaikan mentions a sewage network project in 3 Taif city districts, the contracts for which were signed a year ago, and which has still not seen works begin.
“There are companies that manipulate contracts and obstruction development,” Al-Obaikan said. “If there were an immediate and severe penalty in place, serious contractors would appear. Many private projects are carried out on time and in an immaculate fashion because they are tendered out to well-known companies.”
Locals in Al-Qahar Mountains in the region of Al-Reeth complain of a lack of roads and communications. Territory is rough and travel slow.
“Cars do not last long here”, says Sha'ban Al-Reethi, Sheikh of Aal Ahmad tribe. “The road is rugged and tough on vehicles.”
The road is not what locals were expecting in 1996, when the minister of transportation at the time, Nasir Al-Saloum, laid the foundation stone for the 15-km Jibal Al-Qahar Road. Work on the road, however, has still not begun.
“The executing company,” Sheikh Al-Reethi says, “deprived us of a road by transferring the project to subcontractors.”
Some projects do a little better. The Al-Dhobayah bypass, approved six years ago, has seen 30 percent of it completed. The projected distance of the road according to the contract, however, was only 2 kilometers.
Head of Sabia Municipality, Abu Bakr Mat'har, says the scheme was passed on to the contractor some time ago, but its equipment was being used for other projects first, resulting in a delay for the bypass. Mat'har says the contractor has promised to resume work soon.
Still in the dark
In Jizan'a Manjad and Sahaleel, people still use oil lamps while they wait for the Manjad Electricity project, awarded to a contractor two years ago, to see the light of day.
Mohammad Al-Quwaihis, chairman of the Services and Facilities Committee at the Shoura Council, says subcontractors are used as standard practice all over the world, but that international measures should apply and an entire project should not be given to subcontractors.
Al-Quwaihis says that while subcontractors are a factor in projects being stalling, they are not the main reason.
“We in the Shoura Council have studied the reasons for delays and found that it is mainly due to price hikes, especially in iron, and delays in contractor fees, as well as problems in supervision and delays in handing over the location to the contractor and in the funding.”
With additional reports by Mohammad Sa'eed Al-Zahrani and Majid Aqeeli – Okaz/SG __


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