$200 bn annual construction contract: Can Saudi Arabia ties bail out Pakistan from crisis?

Saudi Arabia’s Investment Minister Khalid Al-Falih said he plans to allocate a substantial portion of the Kingdom’s $200 billion annual construction and material procurement contracts to Pakistan.

Speaking at a joint business forum in Islamabad, Al-Falih expressed confidence in finalising at least $2 billion in business proposals during his three-day visit.

Saudi Arabia is poised to become the world’s largest construction market, and to achieve this goal, the Kingdom is investing heavily in diversifying its economy. This ambitious plan is expected to drive significant growth, with total construction output projected to reach $181.5 billion by 2028, representing a nearly 30% increase from 2023, according to a 2024 report by Knight Frank

“Saudi Arabia is the largest construction site in the world and we will in the next few years be awarding construction and material procurement contracts reaching about $1.8 trillion,” Arab News quoted Al-Falih as saying at the Pak-Saudi Business Forum 2024.

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Last year, the value of construction and EPC procurement was $150 billion, he said, adding that this year it’s estimated at $180 billion, and expected to rise to “approximately $200 billion annually moving forward.

According to a President’s House press release, Minister Al Faleh acknowledged Pakistan’s strategic geographical significance and its potential for natural resources and renewable energy.

Al Faleh stated that Saudi Arabia plans to invest in Pakistan’s infrastructure and mining sectors, with his delegation set to sign 25 agreements across various sectors, marking a new era of economic cooperation between the two nations.

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The two sides also agreed to enhance collaboration in agriculture and information technology.

President Zardari highlighted the longstanding and time-tested relationship between Pakistan and Saudi Arabia, expressing Pakistan’s desire to elevate bilateral ties into a long-term strategic and economic partnership, further strengthening the bond between the two brotherly nations.