Saudi Arabia Looks to Overhaul Billions in Government Projects, Report Says

Saudi Arabia’s government is ordering its ministries and agencies to review billions of dollars’ worth of unfinished infrastructure and economic development projects “with a view to shelving or restructuring them,” a report in Reuters said, citing government sources.

According to the report, Riyadh’s Bureau of Capital and Operational Spending Rationalization, set up last year to make the government more efficient, “is compiling a list of projects that are under 25 percent complete,” the sources told Reuters.

Some projects could be re-tendered so they can be executed in partnership with the private sector, “possibly through build-operate-transfer (BOT) contracts,” said one source familiar with the plan, declining to be named as the matter is not yet public.

In February, the government tasked U.S.-based Bechtel Corp to oversee its state infrastructure projects, known in Arabic as “Mashroat,” and ensure that projects are run at low costs and as efficiently as possible. The deal was awarded to Bechtel to create and run this new office, the National Project Management Office (NPMO), which will create a National Integrated Infrastructure Strategy Plan for the government.

Saudi Arabia’s Minister of Finance, Mohammed Al-Jaddan, said in an interview in January that the Kingdom is committed to more efficient government spending, “wanting to make sure that we are more efficient and our spending so that the rate of return on our investment is higher. We managed – as we have announced last year through efficiency programs – to save about 80 billion riyals ($21 billion) just from efficiencies and that should continue.”

When asked if this was an age of austerity in the Kingdom of Saudi Arabia, the Minister replied, “It is an age of efficiency.”