Saudi Builder Khodari Gets $360m University Housing Contract

Saudi Arabian construction firm Abdullah Abdul Mohsin al-Khodari and Sons has won a SAR1.35 billion ($359.7 million) contract from the government for construction of staff housing at King Khaled University, it said in a statement on Thursday.

The contract has been awarded by the Ministry of Higher Education, it said, adding the details of the project including duration will be disclosed once the deal has been signed.

The construction firm said the financial impact of securing the contract is expected to start being reflected in its fourth-quarter earnings statement.

Although global oil prices have tumbled to near five-year lows in the last few months, sharply below levels which analysts believe the Saudi government needs to balance its budget, industry experts do not expect major cutbacks in spending by the government.

Though the fiscally-cautious Saudi government has slowed spending to its lowest rate in a decade, its 855 billion riyal state budget for 2014 included plans to build 465 schools and 11 hospitals, as well as provision for a 25 per cent jump in spending on infrastructure projects seen vital to improve public welfare.

Builder Khodari expects to double its capital spending in coming years to cope with the work it hopes to do on the country’s big infrastructure projects, its chief executive told Reuters in October.