Saudi Jackpot

Red Blount's $1.7 billion deal

In the big-rig world of heavy construction, no one thinks bigger than a country boy from Alabama named Winton ("Red") Blount. Just after World War II, he was building fishponds in the rural South. Now he is preparing to erect an immense desert campus in Saudi Arabia that will sprawl across an area the size of 109 football fields. In partnership with the French firm Bouygues, Blount Inc., of Montgomery, Ala. (fiscal 1981 sales: $651 million), has captured a coveted $1.7 bil lion contract to build Saudi Arabia's new University of Riyadh. Last week the first payment on the deal, a check for $343 million, was hand-carried from Riyadh to New York City.

The project will include 17 major buildings housing a medical center, a 4 million-volume library and seven col leges where Saudis will study disciplines ranging from dentistry and engineering to agriculture and marketing. Blount's first task will be to build a mini-city, complete with shopping center and hospital, to support 8,000 construction workers drawn largely from Turkey, Pakistan, Korea and the Philippines.

This is the largest "fixed-price" construction agreement in history. Unless the Saudis change their specifications, they will pay no more than $1.7 billion, no matter what happens to the prices of labor, steel and concrete during the course of the 40-month project. In an era of runaway inflation, that was a risky deal, but it is one typical of Blount.

A native of Union Springs, Ala., Blount, 60, formed his company in 1946 after wartime service as a B-29 bomber pilot. Along with his brother Houston, who later left the business, he started by investing $28,000 to buy four Caterpillar earthmovers. Blount soon gained a national reputation for tackling jobs that were uniquely challenging and thus uncommonly profitable. Among his more memorable monuments: Kennedy Space Center's Launch Site 39A--from which the space shuttle Columbia took off, an underground convention center in Cleveland, atomic research laboratories at Oak Ridge, Tenn., and the Government's maximum-security prison in Marion, Ill., which replaced Alcatraz. Says Blount:

"Those were the kinds of jobs we liked --complex, difficult and often one of a kind." Blount's willingness to sign contracts on a fixed-price basis, rather than on the usual cost-plus condition, attracted scores of inflation-wary customers.

The construction projects generously support Blount's Old South lifestyle. His version of Scarlett O'Hara's Tara is Wynfield, a rambling 140-acre estate near Montgomery, complete with a 19-room Georgian mansion, a swimming pool, stables and magnolia trees. The bright red hair that earned him the nickname of his youth is now sparse and streaked with gray, but the strapping, 6-ft. 2-in. Blount keeps trim with frequent tennis matches and ski trips to Vail, Colo. On jaunts to visit construction sites around the U.S., he sometimes personally pilots one of his company's three de Havilland jets.

Blount has sporadically pursued a much less successful political career. A longtime supporter of Richard Nixon, he was appointed Postmaster General in 1969 and used his business background to help convert the leviathan U.S. mail service into a nonpolitical, Government-owned corporation. In 1972 he made a quixotic attempt to unseat Alabama Senator John J. Sparkman, but garnered only 33% of the vote. Last year he was national campaign chairman for John Connally's aborted presidential bid.

While Blount has often left routine negotiations on construction contracts to lieutenants, he himself followed the mammoth Saudi project. He jetted to Riyadh more than 20 times over 18 months to work his Southern charm on the sheiks.

After the deal was finally sealed, he said, "Darn if those Saudis aren't good traders.

They've been bargaining for centuries. Of course, a country boy from Alabama can be a mighty good trader too."

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