Global financial crisis blamed as lack of funds force decision to abandon plans

A $6.5bn hospital building programme in Saudi Arabia is under threat as part of it has been scrapped due to lack of money. Plans to build new facilities and extend existing ones, including the creation of 5,000 new beds, have been abandoned. Other health projects are being scaled back.

Authorities are blaming the global financial crisis for the decision. There appears to be a lack of funds for both the construction and subsequent running of the hospitals that were planned. The programme was to be funded by the government and private investors.

Sunset in Saudi
Saudi Arabia has so far been seen as a haven from the downturn

Saudi Arabia is forecast to spend £85bn on construction in 2009 and is seen by many as a safe haven from the downturn in the Middle East. The news that the hospital building programme has been shelved will worry British firms pinning their hopes on the kingdom as the antidote to the downturn in Dubai and elsewhere.

Research firm ProLeads said that the total hospital building programme for the Gulf – before the cancellation of the Saudi programme – was worth around $10bn, with Saudi Arabia accounting for the lion's share.

Three factors are driving the need for more healthcare in the Gulf Cooperation Council (GCC) nations: growing population, aging population and unique health risks.

The GCC population is expected to have double by 2025, while improvements in life expectancy will mean more elderly people requiring care. GCC nationals also have a higher than average vulnerability to type 2 diabetes and obesity. The World Health Organization says 25% of UAE citizens have type 2 diabetes and that the level of obesity for GCC nationals is 40%.