*2.2. Saudi Arabian Construction Industry*

Saudi Arabia's construction industry was severely affected during 2015–2016 following the crash in oil prices, which reduced the capital flow; as a result, many projects were halted, postponed, or even cancelled. However, the construction industry in the country is expected to grow exponentially in the next few years, with it gearing up towards a post-oil era, when new major cities will be developed and constructed [31]. According to a report published by Mordor Intelligence [31], more than 5200 construction projects are currently ongoing in Saudi Arabia, valued at USD 819 billion, out of which 3727 are urban construction active projects, and these are valued at USD 386.4 billion. There 733 are utility sector projects valued at USD 95.6 billion and 500 relating to transportation, valued at USD 156.2 billion. The Saudi construction industry is highly competitive with major international players [32]. The market presents opportunities of growth, which is expected to increase the market competition further. However, with a few players holding a significant market share, the Saudi Arabian construction market has an observable level of consolidation [33]. Focusing on the type of construction, Saudi Arabia spent USD 575 billion on public construction projects between the years of 2008 and 2013 [34,35]. A recent report [36] has forecasted a growth of 2.9% in 2021 in the Saudi Arabian construction industry and CAGR of 4% during 2022–2025. Furthermore, a Public Investment Fund (PIF) of USD 800 billion was underlined by the Crown Prince for funding projects over the next decade. Moreover, year-on-year growth of construction contract awards in Saudi Arabia are forecasted to reach 96 percent in 2022, which is diversified over different types of projects [37]. For instance, the total value of planned building contract awards alone in the Saudi Arabia is predicted to be USD 10.95 billion in 2022 [38]. Given these forecasts, the construction industry will be growing rapidly in the next few years.

The Saudi Arabian construction market is expected to witness significant growth and offer lucrative potential, due to its Vision 2030, NTP (National Transformation Programme) 2020, and several ongoing reforms aimed at diversifying away from oil. The Vision 2030, NTP 2020, and private sector investment boost as well as the ongoing reforms are likely to be the growth drivers for the Saudi construction market in 2018 and beyond. Vision 2030, along with a significant investment in housing and infrastructure development promoted across the country by local authorities, is revitalizing the construction industry and generating interest in a growing number of international players. Due to these programmes, the construction industry might have access to various opportunities; however, there are challenges associated with these programmes. Changes in regulations, policies, and the granting of planning approval may create complexity in the commencement of new projects and the completion of those already in progress, as they will have to be modified according to these new regulations. In this context, it is worth noting that the Saudi contractors' classification system functions within five grades according to the value they hold for a contract to be signed and 29 fields. The Example of the fields as following: buildings, roads, industrial works, marine works, dams, electrical works, and mechanical works [39]. In addition, according to the Government Tenders and Procurement Law in Saudi Arabia, all government bodies and agencies must use Saudi Arabia's Public Works Contract (SPWC) for all government-funded public construction projects. In addition, an increase in the projects will require growth in the work force, as a result of which companies may well have to depend on expatriates, which might result in acquiring an unskilled workforce lacking experience and facing issues in regard to cultural integration. In addition, without proper estimations of costs and risks, the contractors may end up suffering from financial losses.
