Dive Brief:
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Bechtel, as well as other international construction and engineering giants like Fluor, AECOM and CH2M, have submitted bids to oversee all of Saudi Arabia's government-funded projects, according to Bloomberg.
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The winner will run the country's newly formed National Project Management Office for several years in an effort to streamline Saudi Arabia's processes and create efficiencies and cost savings.
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Saudi Arabia has experienced an economic downturn commensurate with the drop in oil prices — which hit less than $30 per barrel this year — and is facing a 2016 budget deficit of almost 14% of economic output. The consultancy contract aims to help control construction costs for the country.
Dive Insight:
Bechtel also recently reported that it had renewed its management services contract for five years for the Jubail project in Saudi Arabia.The Jubail city project is the largest industrial development in the world, and Bechtel has had a part in it since the 1970s. The "sand-up" Jubail development totals more than 250,000 acres and employs 140,000 in its wide variety of industries.
According to Engineering News-Record, Bechtel's and other American contractors' foreign-derived income fell 21.1% to $49.79 billion in 2015, but incoming CEO Brendan Bechtel said "smart and disciplined" contractors can still find opportunities in the international market. Brendan Bechtel, the company's current president and COO, represents the fifth-generation of Bechtels to serve as CEO, and he has been training in different positions within the company for several years in preparation for his new role in September.
Oil prices have played havoc with the energy and construction sectors in the U.S as well. Energy booms in states like North Dakota drove construction, which has led to a shedding of jobs in those areas as the sector has taken a dive. This month, the AGC reported that, once again, North Dakota saw the greatest construction job loss of any state in June. On the positive side, however, some of the workers who left the construction industry to pursue high-paying energy jobs have returned to the construction industry in a time of skilled worker shortages.