Dubai: Saudi Arabian authorities have announced three public transport projects in the port city of Jeddah, a sign that a freeze on new infrastructure work in the kingdom may be easing as the government slows its austerity drive.
The projects are a tram line along Jeddah’s northern corniche, a marine taxi service and a bridge linking two of the city’s neighbourhoods, the Saudi Gazette reported on Monday, quoting an official statement.
The projects are open to participation of the private sector, the statement said, reflecting a new effort by the government to save money by persuading private investors to share the financial burden of building infrastructure.
The statement did not give a value for the projects or reveal other details.
Few new projects were announced in the kingdom last year as the government, its finances strained by low oil prices, clamped down on spending.
This year, oil prices are about $10 a barrel higher than last year’s average and with the government’s deficit projected to narrow, the 2017 state budget is slightly less austere.
Spending on infrastructure and transport is slated to rise 39 per cent from last year’s actual level.
Prince Khaled al-Faisal, governor of the Mecca region, stressed in the statement that public transport projects in the area were crucial to meet the government’s goal of sharply increasing the number of foreign pilgrims visiting Mecca.
A study by consultants Faithful+Gould, released last week, estimated project awards by the government would total $27 billion this year, compared with about $20 billion last year and $35.5 billion in 2015.
This year’s total could hit $32 billion if a project to build a metro system in the city of Mecca, which was originally expected to be awarded in 2016, goes through this year, the consultants said.
At the same time, at least $13.3 billion of other Saudi Arabia state projects are at risk of being cancelled this year as the government responds to financial pressures and changing priorities, the study added.
BOX — Saudi finance ministry says no to fees on foreign workers’ remittances
The Saudi finance ministry said on Sunday there would be no fees applied on remittances out of the country, days after the kingdom’s advisory Shura Council said it was looking at a proposal to impose a 6 per cent levy on expatriate remittances. Saudi Arabia is “committed to the principle of free movement of capital in and out of the kingdom, in line with international standards,” the ministry’s said on its official Twitter account.
Around a third of Saudi Arabia’s 30 million inhabitants are foreigners, many of them attracted by the absence of tax and higher pay than they can get at home. But the country has been facing a budget squeeze from low oil prices and announced reform plans last year, which included a proposal to impose income tax on foreign workers.
-Reuters
