News Middle East05 May 2020

Saudi Arabia:Ministry sets out 4-year plan to roll out mandatory IDI

05 May 2020

The Acting Minister of Municipal and Rural Affairs Majed Al-Hoqail has issued a decision making it compulsory for contractors to insure buildings and structures against hidden flaws that appear in buildings and structures, whether structural flaws or otherwise, reported Saudi Press Agency (SPA).

The decision is in line with the decision of the Council of Ministers making it compulsory for contractors in non-government sector projects to insure buildings and structures against inherent flaws.

The Cabinet decision gave the Acting Minister of Municipal and Rural Affairs the authority to specify the scope for implementation of the decision, in terms of the types of buildings to be insured, geographical scope and insurance period.

The Ministry of Municipal and Rural Affairs (MMRA) says that implementation would be carried out gradually in four stages.

The first stage, which is already in effect and lasts until the end of Dhul Hijja, 1441H (19 August 2020) requires inherent defect insurance (IDI ) for high-rise buildings (towers), warehouses, hospitals, hotels, buildings for gatherings (mosques – sports facilities), education buildings, malls, telecommunication towers, industrial buildings and installations, buildings below 23m of height, and high risk buildings.

The second stage starts when the first stage comes to an end, and lasts until the end of Dhul Hijja, 1442H (8 August 2021). During this period, the measures that will be implemented, apart from the measures implemented in the first stage, will cover entertainment and public amenities (wedding halls, movie theatres, drama theatres), healthcare centres, furnished hotel suites and residential buildings.

The third stage begins at the end of the second stage and goes on till the end of Dhul Hijja, 1443H (29 July 2022). The measures will be implemented during this period, in addition to what was implemented in the first and second stages, on commercial buildings and developments like airports, banks, TV stations and post offices.

The fourth stage will begin at the end of the third stage and will continue until the end of Dhul Hijja, 1444H (18 July 2023). All types of buildings are to be covered by mandatory IDI by the end of this stage.

The ministry said that IDI would be implemented first in Riyadh. After a period of six months, it will be implemented on the remaining cities of the kingdom, after coordination with the Saudi Arabian Monetary Authority.

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