DOCSLIB.ORG

GCC Powers of Construction 2010 Building the Future and Growing Stronger

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
GCC Powers of Construction 2010 Building the Future and Growing Stronger GCC powers of construction 2010 Building the future and growing stronger Eighty five years in the Middle East Contents 4 Executive summary 6 Meet the executives Murray & Roberts on partnering successfully in the Middle East 10 Meet the executives Al-Turki’s construction sector report for the Kingdom of Saudi Arabia 20 Setting up business in Saudi Arabia The frequently asked questions 24 IPO readiness in the construction sector 30 Regional restructuring 34 Changing the game: Capitalizing on BOT/PPP: a contractor’s perspective 38 Profiles 40 References 43 Contacts Building the future and growing stronger | Deloitte GCC powers of construction 2010 | 3 Executive summary It has certainly been an interesting and challenging year. We have seen the last twelve months plagued with significant challenges in closing out suspended or canceled projects to ensure contractors were paid fairly for work done and that performance bonds were safely released as well as an inordinate amount of time being spent by management in negotiations and continuous following up to collect cash for completed or ongoing projects. Cash resources have been stretched to the limit and contractors have been faced with two alternatives: signing a memorandum of understanding in which they agree to discounts and payment plans and thereby collect some cash and recoup most of their costs; or face arbitration proceedings coupled with huge costs and no certainty on the outcome and the length of the arbitration. The knock-on effect has seen contractors ultimately financing the employers due to extended and renegotiated payment terms. This, in turn, has put enormous pressure on contractors who have had to negotiate extended terms with their banks, which in itself has been challenging given the overreaction to the risk associated with the construction industry. 4 | Deloitte GCC powers of construction 2010 | Building the future and growing stronger Banks have therefore also faced this challenge and have had to balance a very delicate situation of either renegotiating terms or canceling facilities (which would Over the year a number of players have just exacerbated the already delicate economic situation). have taken the opportunity to On the up side, tenders in Abu Dhabi and Saudi Arabia expand their geographical footprint have provided opportunities for contractors, although the competition is rife, with up to 12 contractors bidding in order to capture opportunities in for the same contracts. This has resulted in employers the key markets of Abu Dhabi, asking for re-tenders to drive prices even further downward; as contractors are hungry for work they Saudi Arabia and Qatar. have been responding to the re-tender requests in order to fill their order books and meet running costs until the markets improve. This is also of course an ideal time to consolidate and Over the year a number of players have taken the realign resources, processes and work streams to opportunity to expand their geographical footprint maximize profitability, with a long term view to creating in order to capture opportunities in the key markets a well governed environment, with a focused strategy of Abu Dhabi, Saudi Arabia and Qatar. This has that addresses the lessons learnt and avoids the contributed to the increased competition not only consequential risks from the past. Contractors would from players who already existed in the GCC markets then be well positioned for a future IPO or bond issue but also from international players whose opportunities when the risk appetite of investors returns and order further afield had dried up. books have returned to reassuring levels. All these factors are creating a distinctly advantageous employers’ market, but time will tell whether these Cynthia Corby apparent “cost savings” will be at the long term cost UAE Construction Industry Leader of quality for end users. On a positive note increasing oil prices are providing some reassuring signals in these economies. For the construction industry this means that the planned government spends on healthcare, education, power, affordable housing and infrastructure should be more realistic and achievable. The difference though when comparing these times to those of the “boom” is that the opportunities exist but decisions to award tenders and roll out development plans are not so fast. On the contrary, they could even perhaps be criticized for being too slow by eager contractors attempting to build an achievable pipeline for their stakeholders. Building the future and growing stronger | Deloitte GCC powers of construction 2010 | 5 Meet the executives Murray & Roberts on partnering successfully in the Middle East the potential for significant expansion. Choosing the right partner has been the key to our success in the Middle East and we believe it is fundamental to work with a Joint Venture partner who has appropriate experience, and is influential and well respected in their markets. The skills and experience each party brings to the Joint Venture should also be complimentary and each should have a clearly defined role based on individual strengths. These attributes we believe are the hallmarks of a successful and truly integrated Joint Venture partnership resulting in commitment to a long term relationship. Of course any relationship you develop comes with certain challenges. The biggest challenge is often getting all parties to work together under the same framework for reporting, delivery and monitoring Murray & Roberts was established in the Middle East in processes and procedures. This is an area where Murray 1994 and in 1999 completed its first project, the iconic & Roberts adds value through best-in-class practices, 7-star Burj al Arab Hotel in Dubai, which firmly policies and systems in global engineering and established the company’s reputation in the region. construction. We play a vital role in the Joint Venture relationship, through implementing our well established Murray & Roberts chose to operate in the Middle East policies and procedures and good governance practices. which, as an emerging market, offered the company the opportunity to showcase its expertise on major The business model under which Murray & Roberts has projects, and which is where the Company adds value operated since inception in the Middle East ensures that and demonstrates it’s credentials on high end we provide key staff and intellectual property, and our commercial buildings. partners provide the production resource (plant and labor). This model affords the company the flexibility to Partnering successfully in the Middle East grow and down size with relatively little exposure, which Over the last 16 years, Murray & Roberts has formed is key in an emerging market where the environment strategic partnerships with the Habtoor and Nass can change rapidly. families in the United Arab Emirates (UAE) and Bahrain respectively. These relationships remain strong, Lessons learnt bolstered in the UAE by the formation of the Habtoor In a market which is constantly evolving and has faced Leighton Group and by the business diversity and the demands of a period of immense growth and now strength of the AA Nass Group in Bahrain. In 2009, significant downturn; I would summarize the areas for Murray & Roberts Middle East formed a strategic improvement as follows: relationship with Saudi Oger to work together in Saudi Arabia. This is already maturing and bearing fruit with • Contracts could be drafted in a way in which they are the award of two major projects in 2010, and with more standardized and more equitable for both the 6 | Deloitte GCC powers of construction 2010 | Building the future and growing stronger employer and the contractor. In the period of high The challenges of the economic crisis demand a project was often started where the design As a whole, the Middle East region has generally fared was still under development and subject to change. better than most global economies in 2009, with the Managing this change posed many challenges for the exception of Dubai which saw its construction work contractor including in many cases an unplanned brought to a comparative standstill, although there are substantial increase in the original contract value. This signs of recovery in 2011 and beyond. placed a huge burden on the contractor’s cash flow as The liquidity crisis will continue to affect business it takes time to settle the scope changes. The employer modeling for several years to come and a short-term was also burdened with paying these usually return to construction norms is not expected. However unbudgeted costs. the local Dubai economy is buoyed by its strong brand, it’s close relationship with Abu Dhabi, and its Gulf • To avoid an adversarial relationship between the Cooperation Council (GCC) neighbors, with oil and gas employer and the contractor, we believe it is vital to prices currently at pricing levels that will support and have a more clearly defined scope of work in the encourage infrastructure development over time. contract, where the design is approved and unlikely to change significantly. This will allow the costs to be We believe the future opportunities will be in Abu Dhabi better managed up front, which better manages and the Kingdom of Saudi Arabia, which has significant the employer’s expectations and translates into less risk investment plans to develop their infrastructure and for contractors. It will also allow for a better relationship meet their published targets. Competition in the region between the engineer
Load more

Recommended publications
  • The Dilmun Bioarchaeology Project: a First Look at the Peter B. Cornwall Collection at the Phoebe A
    UC Berkeley Postprints Title The Dilmun Bioarchaeology Project: A First Look at the Peter B. Cornwall Collection at the Phoebe A. Hearst Museum of Anthropology Permalink https://escholarship.org/uc/item/2z06r9bj Journal Arabian Archaeology and Epigraphy, 23(1) ISSN 09057196 Authors Porter, Benjamin W Boutin, Alexis T Publication Date 2012 DOI 10.1111/j.1600-0471.2011.00347.x Peer reviewed eScholarship.org Powered by the California Digital Library University of California Arab. arch. epig. 2012: 23: 35–49 (2012) Printed in Singapore. All rights reserved The Dilmun Bioarchaeology Project: a first look at the Peter B. Cornwall Collection at the Phoebe A. Hearst Museum of Anthropology This article presents an overview of the Peter B. Cornwall collection in the Phoebe A. Arabia Hearst Museum of Anthropology at the University of California, Berkeley. Cornwall Benjamin W. Porter conducted an archaeological survey and excavation project in eastern Saudi Arabia 240 Barrows Hall, #1940, and Bahrain in 1940 and 1941. At least twenty-four burial features were excavated in Department of Near Eastern Bahrain from five different tumuli fields, and surface survey and artefact collection Studies, University of California, took place on at least sixteen sites in Saudi Arabia and Bahrain. The skeletal evidence, Berkeley, CA 94720 USA objects and faunal remains were subsequently accessioned by the Hearst Museum. e-mail: [email protected] The authors recently formed the Dilmun Bioarchaeology Project to investigate this collection. This article provides background information on Cornwall?s expedition Alexis T. Boutin and an overview of the collection. Additionally, skeletal evidence and associated Stevenson Hall 2054A, Depart- objects from two tumuli in Bahrain, D1 and G20, are presented to illustrate the ment of Anthropology, Sonoma collection?s potential contribution.
    [Show full text]
  • Saudi Arabia Infrastructure “Projects Galore”
    Disclaimer & Disclosure By accepting this publication you agree to be bound by the foregoing terms and conditions. You acknowledge that KFH Research Limited (“KFHR”) is part of the worldwide Kuwait Finance House Group of subsidiaries and affiliates (KFH Group), each of which is a separate legal entity. KFHR alone is responsible for this publication and for the performance of related services and/or other obligations. The recipient agrees not to make any claim or bring proceedings as regards to this publication or related services and obligations as against any other entity within the KFH Group, or any of their subcontractors, members, shareholders, directors, officers, partners, principals or employees. KFHR has prepared this publication for general information purposes only and this does not constitute a prospectus, offering document or circular or offer, invitation or solicitation to purchase, subscribe for or sell any security, financial product or other investment instrument (“Investments”), or to engage in, lead into, conclude or refrain from engaging in any transaction. In preparing this publication, KFHR did not take into account the investment objectives, financial situation and particular needs of the recipient. Before making an investment decision on the basis of this publication, the recipient needs to make its own independent decision, preferably, with the assistance of a financial and/or legal adviser, in evaluating the Investment in light of its particular investment needs, objectives and financial circumstances. Any Investments discussed may not be suitable for all investors; there are risks involved in trading in or dealing with Investments and it is highlighted that the value, yields, price or income from Investments may go up or down.
    [Show full text]
  • Saudi Arabia Land of Opportunities
    SAUDI ARABIA LAND OF OPPORTUNITIES INDUSTRIAL INVESTORS GUIDE My first objective is for our country to be a pioneering and successful global model of excellence, on all fronts, and I will work with you to achieve that The Custodian of The Two Holy Mosques King Salman bin Abdulaziz Al Saud Contents Saudi Vision 2030 8 16 Why Saudi Arabia? 40 Industrial Clusters (IC) Saudi Vision 2030 8 Saudi Arabia Vision 2030 Our Vision for Saudi Arabia is to be the heart of the Arab and Islamic worlds, the investment powerhouse, and the hub beneath our lands. But our real wealth lies in the ambition of our people and the connecting three continents potential of our younger generation. They are our nation’s pride and the architects It is my pleasure to present Saudi Arabia’s of our future. We will never forget how, Vision for the future. It is an ambitious yet under tougher circumstances than today, achievable blueprint, which expresses our nation was forged by collective our long-term goals and expectations determination when the late King Abdulaziz and reflects our country’s strengths and Al-Saud – may Allah bless his soul – united capabilities. All success stories start with the Kingdom. Our people will amaze the a vision, and successful visions are based world again. on strong pillars. The first pillar of our vision is our status as the heart of the Arab and We are confident about the Kingdom’s Islamic worlds. We recognize that Allah the future. With all the blessings Allah has Almighty has bestowed on our lands a gift bestowed on our nation, we cannot help but more precious than oil.
    [Show full text]
  • Wear a Face Mask
    October 28, 2020 Vol. LXXV, No. 42 a weekly Saudi Aramco publication for employees CTO leads practical low Historic Saudi W Summit Keep COVID- numbers Aramco wins first place for in this carbon energy thinking down KAPSARC issue Ahmad O. Al Khowaiter joined The Women 20 (W20) Summit, As numbers rise in certain Aramco was the first place winner international experts at last week’s hosted for the first time in Saudi countries, we must take heed and of the Decorative Concrete category “Middle East and Africa Energy Arabia and sponsored by Aramco, continue taking precautions to awarded by the American Concrete Week” conference to drive for- brought women’s empowerment keep Covid-19 numbers down. Institute for excellence in the con- ward the energy industry’s low and diversity and inclusion to struction of the King Abdullah Petro- carbon agenda. center stage. leum Studies and Research Center. see pages 6 and 7 see page 2 see page 8 see page 9 Climate change and the rising demand for clean energy were lead topics discussed by president and CEO Amin Nasser at this week’s B Summit, hosted by Saudi Arabia. see page 3 AI: The new normal Company at the forefront of Artificial Intelligence revolution see page 5 By wearing a face mask in 2020 we hope to make 2021 face mask free. wear a face mask October 28, 2020 the arabian sun 2 company news Historic Saudi W Summit seeks to inspire, empower women The Women 20 (W20) meeting was hosted virtually in Riyadh as an integral part of the Kingdom’s Group of 20 (G20) presidency by Eamonn Houston Described as an “engagement group,” the W20 was set up in 2015 and functions Participants at the W20 Riyadh — The Women 20 (W20) Summit, independently.
    [Show full text]
  • Publication.Pdf
    In The Name Of Allah, The Most Merciful, The Most Compassionate Arriyadh holds a strategic and pivotal role as the capital of the Kingdom of Saudi Arabia which is the birthplace of the Message of Prophet Mohammed (Peace be upon Him) and the location of the Two Holy Mosques. The dynamic capital hosts diplomatic, Islamic, political, economic, financial, trade, scientific, technological and educational institutions and is a fast developing national, regional and international center. Arriyadh is also a hub of administration with national cultural and heritage bodies and activities. the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz (may God bless him) has over many decades actively supported Arriyadh and its remarkable development. Today, with his Crown Prince, Deputy Prime Minister, Minister of Interior; and the Deputy Crown Prince and Defence Minister; King Salman is ably guiding the development of the Kingdom, its capital and provinces and ensuring the welfare, security and prosperity of the nation’s population. Evidence of this is seen in the range of visionary development and infrastructure projects, which are helping to transform the Kingdom and the wider region. The development process in Arriyadh does not focus on specific areas or sectors. Rather it embraces a wide and comprehensive range of projects and needs. These include ambitious programs in transportation. The King Abdulaziz Public Transport Project in Arriyadh City is the largest of its kind and will provide a network of metro and bus services in the capital. The King Khaled International Airport Development Project will considerably expand passenger and airfreight capacity; and national and regional projects to develop railroad and road networks will soon offer remarkable improvements in transportation within the Kingdom and GCC.
    [Show full text]
  • Saudi Arabia – Industrial Sector Overview August 2016
    Saudi Arabia – Industrial Sector Overview August 2016 WWW.JEG.ORG.SA Saudi Arabia – Industrial Sector Overview Report, 2016 TABLE OF CONTENTS Executive Summary 06 1. Introduction 07 2. Saudi Arabia – Industry Overview 08 2.1 Industry 2020: The National Industrial Strategy 08 2.2 National Transformation Program 2020 09 3. Construction & Cement 10 3.1 Construction 10 3.1.1 Infrastructure Construction 12 3.1.2 Office Construction 12 3.1.3 Building Sector Construction 13 3.1.4 Oil & Gas Sector Construction 14 3.1.5 Power & Water Sector Construction 14 3.1.6 Industrial Construction 15 3.1.7 Retail Construction 15 3.1.8 Hospitality Construction Market 16 3.2 Top Construction Players in the Saudi Arabian Market 17 3.3 Construction Industry Drivers and Constraints 18 3.4 Regulatory Reforms in Construction Sector in Saudi Arabia 18 3.4.1 Green Building Regulations 18 3.4.2 Restrictions on Working Hours 19 3.5 SWOT Analysis 19 3.6 Cement 19 3.6.1 Major Market Players 21 3.6.2 Cement Sector – Issues 21 3.6.3 SWOT Analysis 22 4. Petrochemicals & Refineries 23 4.1 Petrochemicals 23 4.1.1 Major Market Players 24 4.1.2 SWOT Analysis 26 4.2 Refining 26 4.2.1 SWOT Analysis 27 5. Mining & Metals 28 5.1 Major Market Players 29 5.2 SWOT Analysis 29 6. Regulations and Ease of Doing Business 30 Saudi Arabia – Industrial Sector Overview Report, 2016 2 7. Industry – Outlook 31 7.1 Non-oil Sector Growth Contracts 31 7.2 Implications of Global Oil Market for Saudi Arabia 31 7.3 USD 4 Trillion Investment Needed to Sustain Job Demand in Non-oil Economy 31 7.4 Privatization and an Open Stock Exchange 31 8.
    [Show full text]
  • Economic Development Prospects for the Eastern Province
    Economic Development Prospects for the Eastern Province Economic Development Prospects for the Eastern Province www.chamber.org.sa Eastern Province in Brief 02 Section One: 04 Eastern Province’s Key Economic Development Section Two: 06 Industrial Activity in Eastern Province Contents Section Three: 15 Infrastructure Development in Eastern Province Section Four: 18 Tourism Activity in Eastern Province Section Five: 22 Population in Eastern Province Section Six: 24 Work Force in Eastern Province Section Seven: 26 Housing Units in Eastern Province Section Eight: 28 Hospital & Beds in Eastern Province Section Nine: 32 Agriculture & Livestock Resources in Eastern Province Section Ten: 38 Water Production in Eastern Province Conclusion and References 42-45 Eastern Province in Brief ASH SHARQIYAH Eastern Province The Eastern Province of Saudi Arabia is the place where Kingdom’s first oil was extracted in 1938 and subsequently this region has become the center of world-class oil, gas and petrochemical industries with the presence of global giants in these sectors. Today, the Eastern Province is dubbed “The Industrial Capital of the Entire Gulf” for its enormous industrial activities. And it is evident when this region has become the biggest recipient of industrial capital investments of the Kingdom. 22 Economic Development Prospects for the Eastern Province With the support from the recently launched “Saudi Vision 2030”, the Eastern Province has taken a key role in the Kingdom’s drive to diversify its income away from oil. Most of the manufacturing industries such as petrochemicals, chemicals, steel, cement, aluminum and plastics are located in the region. These industries are mainly based in the Dammam-I, II and III industrial estates, Al Ahsa-I and II industrial estates, Hafr Al-Batin industrial estate and Jubail-I and II industrial cities.
    [Show full text]
  • The Boundary Dispute Between Kuwait and Iraq Has It Subsided?
    LEBANESE AMERICAN UNIVERSITY THE BOUNDARY DISPUTE BETWEEN KUWAIT AND IRAQ HAS IT SUBSIDED? By MAHA ALKENAEE A thesis Submitted in partial fulfillment of the requirements for the degree of Master of Arts in International Affairs School of Arts and Sciences August 2011 L E B A N E S E A M E R I C A N U NIVERSITY School of Arts and Sciences - Beirut Campus Thesis Approval Form Student Name: Maha Alkenaee I.D. #: 200400150 Thesis Title The Boundary Dispute Between Kuwait and Iraq Has it Subsided? Program : Master of Arts in International Affairs Department : Social Sciences School : School of Arts and Sciences ii iii iv ACKNOWLEDGMENTS This research would not have been possible without the help and assistance of many persons. I would like to express my gratitude to my supervisor Dr. Sami Baroudi who has been a great support throughout all stages of my postgraduate studies. I am also deeply grateful to all of my professors in the Lebanese American University from whom I have learned an abundant amount of knowledge. v To my loving family vi THE BOUNDARY DISPUTE BETWEEN KUWAIT AND IRAQ HAS IT SUBSIDED? Maha Kenaee Abstract This thesis attempts three related tasks. First, it surveys the historic record which provides uncontestable evidence that Kuwait was never part of the Ottoman Empire and thus never formed a single administrative or political unit with Iraq or part of it. Second, it traces the turbulent history of Kuwait‟s relationship with Iraq ever since the latter achieved independence in 1932; arguing that this turbulent relationship invited the intervention of regional and international players due to the strategic importance of Kuwait, especially since the discovery of oil.
    [Show full text]
  • The Saudi Economy in 2019
    The Saudi Economy in 2019 The year ahead will be marked by a continued improvement in the health and direction of the Saudi economy. During 2019, we expect to see a consolidation of efforts in striving towards the goals of the Vision 2030 (Vision), as well as the targets set under the National Transformation Program (NTP). This effort will be aided by the largest ever budgeted expenditure, for the second successive year, of SR1.1 trillion, which not only includes a 20 percent yearly rise in capital expenditure, but also a number of targeted support measures. Whilst economic reform is still currently under way, latest full year GDP data for 2018 shows that the economy was able to absorb most of the disruptive effects of necessary economic reform enacted last year. Looking ahead, as comparably limited major reform is scheduled to take place during 2019, this should clear the way for a pick up in momentum for the Saudi economy. Overall, whilst the oil sector‟s output will be partially trimmed by Saudi Arabia‟s commitment to the OPEC and partners (OPEC+) agreement, we do see the non-oil sector exhibiting marginally higher year-on-year growth. According to our forecasts, Saudi Arabia‟s economy will grow by 2 percent in 2019, compared to 2.2 percent in 2018. The mild decline in yearly growth is entirely due to lower oil sector GDP as the Kingdom complies with the OPEC+ production agreement. That said, we still see oil sector growth being helped along by a rise in gas output and the opening of the Jazan refinery.
    [Show full text]
  • Saudi Arabia and the Law of the Sea
    633 SAUDI ARABIA AND THE LAW OF THE SEA James P. Piscatori* The Middle East, broadly defined, is Red Sea is important as the gateway to penetrated by five bodies of water, the the Suez Canal, which itself was eco­ five "fingers" of the Mediterranean, nomically and strategically significant Black, Caspian, and Red Seas, and the prior to 1967, because it reduces by Persian Gulf. The Red Sea and Gulf one-half the Gulf to London journey. have received particular attention in The recently reopened canal probably recent history. The significance of the will be highly significant again as it is Red Sea stems, first of all, \ from its widened and deepened to accommodate connection to the Arab-Israeli conflict. ships of the 150,OOO-ton range and Israel has one non-Mediterranean port, eventually of the 270,OOO-ton range? Eilat, which can only be reached Finally, the Soviet base at Berbera in through the Red Sea and then through Somalia highlights the vulnerability of the Gulf of 'Aqaba. Denial of entry to access to the sea itself. Israel through closure of the Straits of Of far greater importance is the Tiran was considered a casus belli in Persian Gulf. Indeed, the growing indus­ 1967, and in 1973 a blockade of the trial dependence on oil, even more than entire sea was carried out at the Bab the discovery and exploitation of the al-Mandab Strait to support the war aims of the Arab front. Some strategists *1 wish to acknowledge with gratitude the believe that in a long war similar action assistance of Professors K.
    [Show full text]
  • Saudi Arabia. REPORT NO ISBN-0-93366-90-4 PUB DATE 90 NOTE 177P
    DOCUMENT RESUME ED 336 289 SO 021 184 AUTHOR McGregor, Joy; Nydell, Margaret TITLE Update: Saudi Arabia. REPORT NO ISBN-0-93366-90-4 PUB DATE 90 NOTE 177p. AVAILABLE FROM Intercultural Press, Inc., P.O. Box 700, Yarmouth, ME 04096 ($19.95, plus $2.00). PUB TYPE Reports - Descriptive (141) EDRS PRICE MF01 Plus Postage. PC Not Available from EDRS. DESCRIPTORS Cultural Differences; Cultural Opportunities; *Foreign Countries; *Foreign Culture; Intercultural Communication; International Relations; Overseas Employment; Tourism; Travel IDENTIFIERS *Saudi Arabia ABSTRACT A guide for persons planning on living in or relocating to Saudi Arabia for extended periods of time, this book features information on such topics as entry requirements, transportation, money matters, housing, schools, and insurance. The guide's contents include the following sections: (1) an overview; (2) before leaving; (3) on arrival; (4) doing business; (5) customs and courtesies; (6) household pointers; (7) schools; (6) health and medical care; (9) leisure; (10) cities in profile; (11) sources of information; and (12) recommended readings. Three appendices are also included: (1) chambers of commerce and industry in Saudi Arabia; (2) average celsius temperatures of selected near eastern cities; and (3) prior to departure: recommended supplies. (DB) ***********************************************1!*********************** * Reproductions supplied by EDRS are the best that can be made * * from the original document. * *********************************************************************** U.S. DEPARTMENT OP EDUCATION Office of Educitional Research Ind Improvement EDUCATIONAL RESOURCES INFORMATION CENTER (ERIC) ty,thls document has been reproduced Se Keived from the person or worn/aeon I (Quieting it O Minor changes Aare been made to improve reproduction Quality Points of view or opinions stated in this docu .
    [Show full text]
  • Vision 2030 and the Birth of Saudi Solar Energy
    MEI Policy Focus 2016-15 Vision 2030 and the Birth of Saudi Solar Energy Makio Yamada Middle East Institute Policy Focus Series July 2016 A solar sector is emerging as part of Saudi Arabia’s economic diversification plans under the Vision 2030. Makio Yamada offers an analysis of policy and institutions governing the country’s expansion into “yellow oil.” Rising domestic oil consumption, young citizens’ entry into the job market, and reduced solar panel production costs have driven the launch of the solar industry in the kingdom. Growth of the industry had previously been hindered by institutional ambiguity and fragmentation, but the government restructuring in May has paved the way to its eventual rise by unifying necessary administrative functions under the newly-created super-ministry. Key Points ♦ The new Saudi leadership, led by King Salman and his son Deputy Crown Prince Mohammed, will exercise control over the country’s next giant, non-oil industry, which Saudis call “yellow oil,” or solar energy ♦ The initial driver behind the Saudi government’s interest in the use of solar power was its intention to preserve the kingdom’s capacity to export oil in light of rising domestic consumption; the Vision 2030 also underscores the industrial aspect of solar energy ♦ Following the succession in January 2015, the new leadership found the country’s institutional framework for the solar sector problematic; the government restructuring in May 2016 unified the necessary administrative functions for the sector ♦ Insufficient human capital may be an impediment to the growth of the industry; the National Transformation Program 2020 has set ambitious goals to boost the country’s technical education, but its feasibility remains to be seen Makio Yamada Makio Yamada Introduction investigates economic diversification in Saudi he announcement of Vision 2030, the Arabia and G.C.C.
    [Show full text]