By Matt Smith
DUBAI (Reuters) - Saudi Arabia's plans to dramatically increase the size and scope of football stadiums around the country have "been shelved" because of the impact of falling oil prices, sources have told Reuters.
Under plans announced by the late King Abdullah -- who died in January -- 11 new grounds were to be built as a means of growing the domestic game in the kingdom.
However three construction industry sources have told Reuters only two stadiums will go up as state funding has been hit by a fall in prices.
King Abdullah, who was succeeded by his half-brother King Salman, instructed government oil firm -- Saudi Aramco -- to oversee the construction of the stadia in 11 of Saudi Arabia's regions, according to an official statement last July.
The stadium program, also designed to coincide with the privatization of the 14 soccer clubs in the Saudi Professional League, was aimed at enriching the domestic game and improving the national team.
Tenders were announced, contractors submitted bids and winners were expected to be announced in early 2015, but the plan has stalled since Abdullah’s death.
“We’re now led to believe only two new stadiums will be built -- in (the eastern city)Dammam and one in either Mecca or Medina,” said a senior executive at a construction company who was privy to the tendering process.
The stadium plan “has been shelved”, said a senior executive at an international construction firm with operations in several Gulf countries.
“They said they will go ahead with two of them, but I think it will take a while before anything happens,” he said.
The Ministry of Finance and Aramco did not respond to requests for comment.
Riyadh's administration is younger than under former monarch Abdullah and seems to be following different policies -- in infrastructure development, defense and other areas.
Following the plunge in oil revenues. U.S. Light Crude is trading at about $60, barely half 2014’s June peak of $108.
“With the price of oil and the commitment Saudi has in Yemen, it has put a strain on the budget so they’re looking at unnecessary commitments they can reduce,” said the second executive.
The stadium plan falls into that category. It would have built 11 45,000 capacity grounds based on the 384 million euro ($427 million), 60,000-capacity King Abdullah Sports City in Jeddah that opened in May 2014 and is shared by soccer rivals Al Ittihad and Al Ahli.
Three Riyadh clubs use the 69,000-seater King Fahd Stadium, but the rest of the league play in grounds with capacities of about 5,000-35,000 and only four clubs averaged crowds above 10,000 last season.
Overall, stadiums were 36 percent full last term so an ambitious rebuilding scheme may make little financial sense.
Once an Asian powerhouse and continental champions in 1984, 1988 and 1996, the kingdom has slipped from a record high of 21 in the FIFA world rankings in 2004 to 95 today, and failed to go beyond the group stage at January’s Asian Cup following defeats to Uzbekistan and China.
Mohammed al-Nowaiser, the league chairman, told Reuters privatization of some clubs would begin later this year, but declined to provide further details. He declined to comment on the stadium plan.
(Reporting by Matt Smith; Editing by Douglas Beattie)