Aramco the Builders

When King Abdullah University of Science and Technology (KAUST) was announced about two years ago, one of the interesting aspects about the project was the way it was planned to be developed and built. From the beginning it was clear that KAUST will be independent and not under the umbrella of the Ministry of Higher Education, and instead of relaying on a real estate or a construction company to build the university, the project was handled by Saudi Aramco, the national oil company.

Choosing an oil company to build a world class university seemed strange to many people, but to me it made some sense. The King’s bold vision meant things must be done differently. There are only two construction companies in the country that can handle a huge project like KAUST: Saudi Oger and Saudi Binladen Group (SBG). Both companies are already developing major megaprojects, and both companies have been linked to corruption allegations related to government contracts before.

To turn the King’s vision into a reality in the short time span that was announced, he needed people who are efficient and trustworthy. Many of those people can be found in Saudi Aramco, the largest oil company in the world. Now that the KAUST development model has been a success, I guess the King wants to use the same model to pull off another megaproject that has been delayed for years.

I previously wrote about King Abdullah Stadium. The Ministry of Finance repeatedly refused to allocate a budget for the project because proposals made by the General Presidency of Youth Welfare seemed so exaggerated and so… fishy. Rumors have been flying during the past few weeks that Aramco will build the new stadium, but honestly I found that hard to believe. I know that they have done an impressive job with building KAUST, which should be ready to receive students this fall, but I thought that was an exception. Well, I was wrong.

Aramco distributed a statement last week saying the Ministry of Petroleum and Minerals have entrusted them to build the new King Abdullah Sports City in Jeddah. According to the statement, the project will include a big stadium, an 18-hole golf course, a hospital and a sports academy.

Is it right to hire an oil company to build a university and a sports city? It is probably not the most conventional approach, but from a pragmatic point of view it is effective and working. This way of thinking says that if this is what it takes to get the job done, then we will go for it. I really don’t mind such approach, but I think it should not make us overlook the problems and circumstances that got us here. Also, this makes me remember some questions and concerns that I have about Aramco, but that’s another post for another day.

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21 thoughts on “Aramco the Builders

  1. Hello, it’s a strange thing in fact, there is no problem if a company like Aramco will take this project but the Government has some reasons to choose. Indeed, I don’t know but Aramco has a good reputation in this country and off course it’s not going to handle all the project alone . all mega-construction should be done with many companies as (Consortiums) with international companies . So, in that point of view a giant company like Aramco may have good experience in doing such mega projects . and trusted by the Government.

  2. Well said.

    It seems Aramco is becoming our BP, or Bechtel, or Haliburton even. I don’t mind it as a short term phase, but let’s get the official channels fixed and efficient enough to do these things on their own.

  3. It seems as if you are talking about ethical, transparent conduct (or lack thereof) at 3 levels: the government giving the contract; the company fulfilling the contract; and then the operation of the final institution (research institute, sports complex), and how they interact.

    For efficiency Aramco seems a good choice, although they have had their own business ethics issues (worker safety, promotion of executives). In the end would they want control over types of research funded, shares in sports facilities?

    In the US private money funds, builds and donates to the operation leading to a skew in research topics pursued, the type of products that result from them, and interconnected circles of conflicting interests.

    Soley government adventures also have their biases.

    It ultimately depends on what safeguards, oversight and consequences are put in place.

    It is good that these construction efforts are being made though!

  4. You know as well as I do that Aramco’s job is to supervise the project. Not to build it.
    It going to be a tender. companies from all over the world are going to participate. Including Binladen and Saudi Oger.
    King Abdullah chose this approach to speedup the process without compromising the project. No body is as qualified to accomplish this in Saudi today as well as Aramco.
    It is the only supervisor (Not consultant. They’ll be a qualified consultant that would work with Aramco) that would be acceptable to all parties concerned, including the Ministry of Finance.

  5. There are some rumors in the air that Aramco may also be taking the reins of KAEC (King Abdullah Economic City) from Emaar, who some are of the opinion not handling it too well.

  6. Well if the King thinks so then I’d respectfully agree on his decision. Basically I’m surprised to hear the news about Aramco. But a project that took them almost 3 years to build isn’t so bad afterall. In the end everyone should have the right to prove themselves.

    Bless you all.

    Cheers!!!

    @ Ahmed:

    Even if Aramco’s another country but that dosen’t mean they’re as different as other similar companies in the world.

  7. I think it is not much strange that Aramco has been choosen to take care of such a project.As many know Aramco has done such a great job in Saudi in the previous years.In the end, Aramco is the best choice for this project.

  8. 1. The King is Saudi Aramco’s president, so progress reports come to him… these are his projects, that is his company.
    2. Aramco has built several schools and health care facilities in the past, so Aramco being builders… they always were!

  9. Aramco winning card is its standards. Contractors usually would not adhere to international standards. But Aramco, being an American joint company with the Saudi when it was established, imported a lot of detail into the cast of the Eastern Region development. Everything in Aramco was selected with high standards to match the high expectations laid on it for the long run. Even the schools they donate is exponentially without par or equal in the Education Ministry school projects. Although I have my reservations about the current Saudi Aramco, its not as well as the old.. it became too reliant on subsidiary contractors and I did feel that they were lowering their standards out of late.

    Personally, I regret to see many projects with absurd amounts of cash being ran through very unethical practices by business groups that really seem to run things through corrupt elements in the government. For example the Camera traffic survilance system (1 camera = 2 million riyals!!)

  10. I would gladly agree with you Ahmed, Aramco is becoming more than a mere Oil Company! The transparency is going down the hill pushed down by the corruption we’re experiencing in every aspect in our life!

    It’s not pretty! it’s dangerously ugly and begging for a change!

  11. Well, to be honest, it doesn’t surprise me at all. I think that the King wanted something to be awesome on international standards. If any other company adopted the project, they wouldn’t be able to overcome the societal and traditional barriers. Would a university with a separate section for guys and another for girls work and be like the university the King has in mind? Nope.
    Only Aramco can do that.

    The only thing that upsets me though, is that if a university like that can be built in 2 years with overcoming social barriers, then why can’t other projects be built? Not like the sports city, but something for the people. Something to fight poverty or build homes for the homeless. Build better schools and public hospitals… if KAUST can be made then all the others can too. Why aren’t they, though?

    sorry for the long comment I got a little excited :P

  12. ARAMCO manpower when it comes to technical know-how is excellent, but if the contractor like the caliber of Saudi Binladen in terms of mega project like KAUST, ARAMCO made a big blunder in choosing SBG who did their own way of constructing KAUST, they fully devastated the concept of the design. An excellent job was shared by the Saudi Oger who did it on time. Hundreds of sub-contractors has participated in this mega-project but few has done their part excellently.

  13. Aramco has done an excellent job with Saudi oger and Honeywell India to have excellent building solution in KAUST. Aramco have choosen the right people and the best companies in the world to make it happen.

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