Saudi Infrastructure Development

Saudi Arabia's Notable Infrastructure Projects

The last decade has seen a number of major infrastructure projects in the Kingdom, including:

• King Salman International Airport: a new hub for international travel based in Riyadh
• The Riyadh Metro: one of the largest urban transport projects in the world.
• The Red Sea Project: a massive tourism, leisure and residential development planned for the western coast of Saudi Arabia.
• The Makkah Public Transport Programme: a comprehensive system designed to reduce congestion in the holy city of Makkah.
• The Riyadh-Dammam Expressway: a major highway project that is expected to reduce travel times between the two cities.
• Al Widyan: a new city located in the north of Riyadh is being built with an eye towards encouraging economic growth.
• Jabal Omar Development Project in Makkah: a massive urban project, which aims to develop the area into one of the most luxurious residential, business and leisure districts in the Middle East.
• Al Faisaliah Economic City: a new eco-friendly city located near Jeddah.

These are just some of the major infrastructure initiatives being undertaken in the Kingdom. This rapid expansion of infrastructure is helping to drive economic growth, create jobs, and spur investment. In order for businesses to capitalize on the growth opportunities, however, they must first understand the operational and financial implications of these developments.

Implications for Operational Accounting

Businesses in the Kingdom must consider the operational implications of these projects to remain competitive and profitable. Here are some of the key considerations below.

Greater Demand for Skilled Labour

With an influx of large-scale infrastructure projects, there is sure to be greater demand for qualified personnel in a range of industries, such as engineering, construction, project management, and finance. Companies may be forced to compete for talent, which in turn may push up wages.

Higher Costs for Materials

As infrastructure development intensifies, the demand for key raw materials is likely to rise. This could lead to higher costs for businesses, as suppliers may be able to charge more for their materials. Companies should take this into account when preparing budgets and setting pricing.

Changes in Transportation and Logistics

New roads, bridges, airports, and other infrastructure projects may change the way businesses transport goods and services across the Kingdom. Companies may need to adjust their delivery routes and rethink their supply chains to take advantage of the new opportunities.

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