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  Local firm bids lowest for Kuwait substation deal

  22 December 2025

  The local Al-Ahleia Switchgear Company has submitted the lowest price of KD33.9m ($110.3m) for a contract to build a 400/132/11 kV substation at the South Surra township for Kuwait’s Public Authority for Housing Welfare (PAHW).

  The bid was marginally lower than the two other offers of KD35.1m and KD35.5m submitted respectively by Saudi Arabia’s National Contracting Company (NCC) and India’s Larsen & Toubro.

  PAHW is expected to take about three months to evaluate the prices before selecting the successful contractor.

  The project is one of several transmission and distribution projects either out to bid or recently awarded by Kuwait’s main affordable housing client.

  This year alone, it has awarded two contracts worth more than $100m for cable works at its 1Z, 2Z, 3Z and 4Z 400kV substations at Al-Istiqlal City, and two deals totalling just under $280m for the construction of seven 132/11kV substations in the same township.

  Most recently, it has tendered two contracts to build seven 132/11kV main substations at its affordable housing project, west of Kuwait City. The bid deadline for the two deals covering the MS-01 through to MS-08 substations is 8 January.

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  Edward James
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  Saudi-Dutch JV awards ‘supercentre’ metals reclamation project

  22 December 2025

  The local Advanced Circular Materials Company (ACMC), a joint venture of the Netherlands-based Shell & AMG Recycling BV (SARBV) and local firm United Company for Industry (UCI), has awarded the engineering, procurement and construction (EPC) contract for the first phase of its $500m-plus metals reclamation complex in Jubail.

  The contract, estimated to be worth in excess of $200m, was won by China TianChen Engineering Corporation (TCC), a subsidiary of China National Chemical Engineering Company (CNCEC), following the issue of the tender in July 2024.

  Under the terms of the deal, TCC will process gasification ash generated at Saudi Aramco’s Jizan refining complex on the Red Sea coast to produce battery-grade vanadium oxide and vanadium electrolyte for vanadium redox flow batteries. AMG will provide the licensed technology required for the production process.

  The works are the first of four planned phases at the catalyst and gasification ash recycling ‘Supercentre’, which is located at the PlasChem Park in Jubail Industrial City 2 alongside the Sadara integrated refining and petrochemical complex.

  Phase 2 will expand the facility to process spent catalysts from heavy oil upgrading facilities to produce ferrovanadium for the steel industry and/or additional battery-grade vanadium oxide.

  Phase 3 involves installing a manufacturing facility for residue-upgrading catalysts.

  In the fourth phase, a vanadium electrolyte production plant will be developed.

  The developers expect a total reduction of 3.6 million metric tonnes of carbon dioxide emissions a year when the four phases of the project are commissioned.

  SARBV first announced its intention to build a metal reclamation and catalyst manufacturing facility in Saudi Arabia in November 2019. The kingdom’s Ministry of Investment, then known as the Saudi Arabian General Investment Authority (Sagia), supported the project.

  In July 2022, SARBV and UCI signed the agreement to formalise their joint venture and build the proposed facility.

  The project has received support from Saudi Aramco’s Namaat industrial investment programme. Aramco, at the time, also signed an agreement with the joint venture to offtake vanadium-bearing gasification ash from its Jizan refining complex.

  Photo credit: SARBV

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  Edward James
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  Managing risk in the GCC construction market

  19 December 2025

  

   

  The scale and complexity of construction projects under way in the GCC region has attracted global attention. And while large-scale project announcements continue to dominate the headlines, the underlying risks – insufficient financing, harsh contract clauses and a tendency to delay dispute resolution – are often overlooked.

  Around the region, many contractors are experiencing difficulties once projects have started because they mistakenly believe they have the necessary in-house skillsets to navigate these complex issues.

  MEED has convened a panel of construction consultants and specialists to develop a checklist to help contractors and subcontractors operating in the region to navigate the market’s challenges as the sector moves into 2026.

  The proactive steps are aimed at positioning a company so that it can maximise recovery and mitigate threats posed by unresolved claims and poor commercial or contractual administration.

  Systemic risk

  The regional market is characterised by several systemic issues that amplify risks for contractors. 

  The fundamental problem is finance. Projects frequently suffer because they are not fully financed from the start, which places financial strain on contractors. This problem is then compounded by the region’s traditional contractual environment, which means disputes are typically not finalised until well after jobs have been completed, creating cash flow problems for contractors, particularly near the end of such projects.

  Further financial strain is created by unconditional performance guarantees and retention. The combined requirement for advance payment bonds, a 10% performance bond and sometimes 5%-10% retention represents a significant draw on contractors’ cash flow. The growing tendency of employers to pull bonds further exacerbates the situation.

  Many contractors sign up to one-sided contracts so as to secure more work, rather than challenging their employers. Key contractual issues include:

  > Unrealistic timelines: Contractors set themselves up to fail by accepting unrealistic timescales on projects, despite the knowledge that the work often takes twice as long.

  > Deficient design: A major risk, particularly on high-profile projects, is a lack of specification and design progress. Many contracts, such as the heavily modified Silver Book – a standard contract published by the International Federation of Consulting Engineers (Fidic) for turnkey engineering, procurement and construction projects – presuppose that the contractor has sufficient information to design, build and deliver, even when there is substantive information missing, which renders lump-sum pricing obsolete and inevitably leads to dispute.

  > Lowest-bid mentality: Contractors often fail to factor necessary commercial support from legal and claims specialists into their tender figures, making their bid appear more competitive but leaving them without a budget to seek help until it is too late. As a result, projects are managed with budgets that are barely sufficient, rather than being run properly to a successful conclusion.

  

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  Supply-chain erosion

  The quality and capacity of the subcontractor market, particularly in the mechanical, electrical and plumbing (MEP) field, has eroded significantly. 

  Some major MEP players have closed or left the market due to underpricing, prompting contractors to call in their performance bonds. This means the region is receiving progressively lower quality for increasingly higher costs, further straining the delivery phase for main contractors.

  The risk of subcontractor insolvency is increasing and must now be considered a primary project risk. Contractors should monitor financial health, diversify subcontractor dependencies, challenge allocated resources and secure step-in rights wherever possible.

  Many Silver Book contracts in the GCC now include heavily amended, employer-friendly clauses that push design and ground-risk even further onto the contractor – often beyond what Fidic intended. These amendments require careful review and firm pushback.

  The GCC remains a market of opportunity, but success in 2026 will belong to contractors that combine disciplined tendering, transparent commercial governance and early issue resolution. Optimism is not a strategy; preparation is. 

  A 10-point checklist for contractors in 2026

  1. Mandate contractual due diligence: Invest time and money into a thorough contract review before signing. Be prepared to challenge harsh clauses, particularly those unfairly allocating risk, such as unknown conditions and full design responsibility. Assume that bespoke rather than standard amendments govern your entitlement. Treat the special conditions as the real contract.

  2. Factor commercial support into the budget: Do not omit the cost of essential commercial support from the tender, such as quantity surveyor teams, quantum and delay specialists, legal review and claims preparation. Even if not visible in the front-line figures, this cost – which could be as low as 0.01% of the project value – must be factored in to ensure a budget for early and continuous engagement.

  3. Prepare a realistic baseline programme: Stop committing to programmes just to fit the tender. Develop a realistic programme from the start, identifying risks and including necessary code books to track delays early. Consider commissioning an independent programme review at the tender stage – this is common internationally and reduces later arguments about logic, durations and sequencing.

  4. Confirm project funding: Ensure that the project financing is fully in position before starting work. Many problems stem from projects that are only partially financed, leading to cash running out near completion. Gone are the days of not asking employers for greater transparency when it comes to funding projects.

  5. Establish a strong commercial and claims function: This is where commercial management starts. Set up systems to ensure contractual compliance, including seven-day claim notifications. Variations are inevitable, and proper substantiation is required to secure entitlement – if it is not recorded, it cannot be recovered. Diaries, cost records and notice logs remain the foundation of entitlement.

  6. Seek early specialist engagement: Prevention is better than a cure. Bring in specialists early to examine time and cost issues before problems arise. Consultants can provide advice, help set up the correct commercial systems and prevent the escalation of unresolved issues.

  7. Adopt an old-school approach to claims management: Technology is useful, but nothing beats resolving issues face to face. Engage directly with the employer’s team regularly to negotiate and agree claims early. This manages the client’s expectations when it comes to budgeting and allows the contractor to secure cash flow sooner. A simple early-warning culture – even when not contractually required – prevents surprises and builds trust with the client.

  8. Avoid wasting resources: Focus claims efforts only on events that are actually recoverable and demonstrably critical. Contractors often waste time chasing things that will not be recoverable. Prioritise issues that are both time-critical and clearly fall under the employer’s risk – everything else should be logged but not pursued aggressively.

  9. Upskill internal teams: Use specialist involvement as an opportunity to upskill your in-house commercial team. Have them sit alongside specialist consultants to learn proper commercial and contractual administration processes, creating a lasting work-culture benefit.

  10. Push for faster dispute resolution: When a dispute arises, advocate for a swift resolution mechanism like adjudication, mediation or expert determination to temporarily resolve cash flow issues. Dispute adjudication boards are intended to give quick, interim decisions. However, if not set up from the start of the project, the process becomes protracted – sometimes taking many months – so fails to provide the cash-flow relief contractors urgently need.  Where clients resist adjudication, propose interim binding mediation or expert determinations, or failing this, milestone-based dispute workshops – anything that accelerates getting cash back on site.

  MEED would like to thank Refki El-Mujtahed of REM Consultant Services (refki@rem-consultant.com; www.rem-consultant.com) for facilitating this article, as well as the following co-contributors:

  Aevum Consult | Lawrence Baker | lawrence.baker@aevumconsult.com | www.aevumconsult.com

  Decerno Consultancy | Lee Sporle | leesporle@decernoconsultancy.com | www.decernoconsultancy.com

  Desimone Consulting | Mark Winrow | Mark.Winrow@de-simone.com | www.de-simone.com

  Forttas | Derek O’Reilly & Martin Hall | derek.oreilly@forttas.com & martin.hall@forttas.com | www.forttas.com

  IDH Consult | Ian Hedderick | ian.hedderick@idhconsult.com | www.idhconsult.com

  White Consulting | Nigel White | nigelwhite@whiteconsulting-me.com | www.whiteconsulting-me.com

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  Colin Foreman
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  Contractor wins $1.3bn Hudayriyat Island villas deal

  19 December 2025

  

   

  UK-headquartered construction firm Innovo Group has won a AED5bn ($1.3bn) contract to build two residential developments, Nawayef East and Nawayef West, on Hudayriyat Island.

  Abu Dhabi-based developer Modon Properties awarded the contract.

  The scope of the contract includes the construction of 735 three- to eight-bedroom villas.

  The Hudayriyat Island masterplan was unveiled in 2023. The integrated development comprises residential communities and other leisure and mixed-use facilities.

  The masterplan features 53.5 kilometres (km) of coastline, including 16km of beaches.

  Some of the major destinations on Hudayriyat Island include the Velodrome Abu Dhabi, Surf Abu Dhabi, a wide range of sports, commerce and leisure amenities, the largest park in Abu Dhabi and a 220km-long network of cycle tracks.

  Project developments

  In November 2023, Modon appointed local contractor Trojan General Contracting as the main contractor for the sports hotel, as MEED reported.

  Modon also awarded the local National Marine Dredging Company an $803m enabling works contract in April 2023. 

  Abu Dhabi-based Hilalco completed the construction of mountain bike trails on the island earlier in 2023.

  In November 2022, Chinese contractor China Harbour Engineering Company was awarded the main contract for dredging and reclamation works at Hudayriyat Island.

  In 2019, Modon appointed the local Wade Adams to undertake the initial landscaping and infrastructure works on the island.

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  READ THE DECEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

  Prospects widen as Middle East rail projects are delivered; India’s L&T storms up MEED’s EPC contractor ranking; Manama balances growth with fiscal challenges

  Distributed to senior decision-makers in the region and around the world, the December 2025 edition of MEED Business Review includes:

  > AGENDA 1: Regional rail construction surges ahead > AGENDA 2:  Middle East becomes a hub as rail networks mature > INDUSTRY REPORT 1: Larsen & Toubro climbs EPC contractor ranking > INDUSTRY REPORT 2: Chinese firms expand oil and gas presence > LIBYA: Oil companies ramp up activity in Libya > CONSTRUCTION: Aramco Stadium races towards completion > RENEWABLES: UAE moves ahead with $6bn solar and storage project > INTERVIEW: Engie pivots towards renewables projects > BAHRAIN MARKET FOCUS: Manama pursues reform amid strain

  To see previous issues of MEED Business Review, please click here

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  Yasir Iqbal
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  Diriyah signs land lease deal with King Saud University

  19 December 2025

  Saudi Arabia gigaproject developer, Diriyah Company, has signed a long-term land lease agreement with Riyadh Valley Company, an investment arm of King Saud University.

  Diriyah Company will lease 552,000 square metres (sq m) of land from King Saud University for a period of 70 years. 

  The deal will enable the company to add the land bank to its second phase of the Diriyah Project, which is also known as DG2.

  The agreement was signed by Diriyah Company's Group CEO, Jerry Inzerillo, and the acting president of King Saud University and Riyadh Valley Company chairman, Ali Masmali.

  Diriyah Company is already developing the area adjacent to King Saud University. In April, it awarded an estimated SR4bn ($1.1bn) contract for a utilities relocation package for the King Saud University project located in the second phase of the Diriyah Gate development (DG2).

  The contract was awarded to the joint venture of Beijing-headquartered China Railway Construction Corporation and China Railway Construction Group Central Plain Construction Company.

  The scope of the contract covers the design, construction and relocation of KSU's utilities and administration offices, as well as the construction of a district cooling plant, water storage facilities, a sewage treatment plant, a natural gas plant, a diesel transfer pumping station, a utility tunnel, irrigation water storage tanks, office buildings, warehouses and maintenance workshops.

  In addition to KSU, DG2 will feature residential developments, hotels, an opera house, the Saudi Museum of Contemporary Art, six academies, an arena and a mosque.

  The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh’s city centre, it will cover 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

  

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  Yasir Iqbal