meed-logo

line1 line2 line3
SIGN IN / REGISTER

Heady times for biggest construction markets

22 December 2023

 

It was a whirlwind couple of months at the end of 2023 with major global announcements that will positively impact the region’s largest construction market for years to come.

On 31 October, Saudi Arabia was effectively confirmed as the 2034 Fifa World Cup host after the only other potential bidder for the tournament withdrew from the race. 

Then, on 28 November, Saudi Arabia was selected as the host country for the World Expo 2030 after securing 72 per cent of the votes cast by Bureau International des Expositions member states. 

Recent experience from elsewhere in the GCC has shown that hosting these events comes with a plethora of construction projects.

Qatar invested billions of dollars in infrastructure ahead of the Fifa World Cup 2022; similarly, Dubai spent heavily on infrastructure for Expo 2020.

Crucially, these events, global pandemics withstanding, are immovable deadlines that must be met, which means construction projects have to be delivered on time. 

Significant undertakings

While the investment required for the 2034 World Cup remains to be determined, the Saudi bid must include a minimum of 14 all-seater stadiums, of which at least four should be existing structures. The capacity needed is at least 80,000 seats for the opening and final matches, and at least 60,000 seats for the semi-finals. For all other matches, a minimum of 40,000 seats are necessary. 

Meanwhile, the Royal Commission for Riyadh City, which led the Expo 2030 bid, has said the Expo site masterplan, which is located north of Riyadh close to King Khalid International airport, will cost $7.8bn to develop. 

While both programmes of work are significant undertakings, they are not expected to be as transformative for the Saudi economy as they were for Qatar and Dubai, which were both smaller and dwindling construction markets when they secured the rights to host their events. 

The same cannot be said for Saudi Arabia, where the construction market is already overheated as construction activity ramps up on a series of self-styled gigaprojects, including Neom, Diriyah Gate and Qiddiya, that aim to transform the economy as part of Vision 2030. 

In a report on the Saudi economy released on 2 November, London-based Capital Economics said: “We don’t expect this to be the fillip to the Saudi economy as it was for Qatar, which hosted the World Cup in 2022.

“First, Saudi Arabia already has much of the infrastructure in place, including stadiums, meaning there is unlikely to be a World Cup-related construction boom like Qatar saw.

“Second, even with 104 games scheduled compared to 64 in Qatar, tournament-related tourism spending we estimate could be equal to just 2 per cent of non-hydrocarbon GDP (compared to 6 per cent in Qatar).”

Capital Economics made similar comments on the impact of the 2030 Expo.

In a report issued on 30 November, it said: “[While] hosting the event may support the kingdom’s longer-term goals of boosting tourism, it is highly unlikely that the Expo itself will provide a boost to the economy of the same magnitude as it did in Dubai.

“The Saudi economy is 10 times larger than that of Dubai, so even a similar sized nominal impact will be a much smaller boost as a share of GDP.”

In terms of construction and transport awards, 2023 has been the best year in recent times and could potentially be the best year on record.

By 1 December, there had been $36.3bn of construction and transport awards in Saudi Arabia, which already exceeds the 2022 total of $35.7bn. The record was achieved in 2013 when there were $41.7bn of contract awards, with a significant portion coming from the $23bn of contracts signed that year for the six lines of the Riyadh metro system.

UAE in 2023

It was also a good 2023 for the UAE, which recorded its best contract awards total in over a decade. There were $34.3bn of contract awards by 1 December 2023, higher than the 2014 high of $34.1bn, but still significantly short of 2008, when there were $40.2bn of construction and transport contract awards.

The UAE’s strongly performing property market has driven the country’s construction sector.

Next year, spending on projects by the government and its related entities will play a larger role as tendering starts for projects such as the $4.9bn extension to Dubai Metro’s Blue Line.

Runners up

For the other four GCC markets, the performance in 2023 and outlook for 2024 is more subdued. The hope is that as activity continues in the region’s two largest markets, the others will follow with ambitious projects. There are tentative signs that this is starting to happen as major projects restart or move into tendering. 

The region’s other major construction market is Egypt. This year, its performance has stuttered as the total value of contract awards fell to $9.1bn from $29bn. As the economy continues to struggle with ongoing currency issues, the outlook for 2024 is subdued.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11342964/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Riyadh Royal Commission awards metro Line 2 extension

    18 July 2025

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Royal Commission for Riyadh City (RCRC) has awarded an estimated $800m-$900m contract to build the next phase of the Riyadh Metro project, which is the Line 2 extension.

    The contract was awarded to the Arriyadh New Mobility Consortium.

    The Line 2 extension is 8.4 kilometres (km) long, of which 1.3km is elevated and 7.1km is underground. It includes five stations – two elevated and three underground.

    It will run from where Line 2 currently ends at King Saud University (KSU) and then travel onwards to new stations at KSU Medical City, KSU West, Diriyah East, Diriyah Central, where it interchanges with the planned Line 7, and then finally to Diriyah South.

    According to the consortium’s official website, the consortium members include Italy’s Webuild, India’s Larsen & Toubro, locally based Nesma & Partners, Japan’s Hitachi, Italy’s Ansaldo STS, the Canadian firm Bombardier, Spain’s Idom and WorleyParsons from Australia.

    In 2013, the Arriyadh New Mobility Consortium secured Riyadh Metro’s Line 3 project for $5.21bn.

    Line 3, also known as the Orange Line, stretches from east to west, from Jeddah Road to the Second Eastern Ring Road, covering a total distance of 41km. 

    Riyadh Metro

    Riyadh Metro’s first phase features six lines with 84 stations.

    The RCRC completed the phased rollout of the Riyadh Metro network when it started operating the Orange Line on 5 January.

    In December last year, the RCRC started operating the Red Line and Green Line.

    The Red Line, also known as Line 2, stretches 25.1km from the east of Riyadh to the west, via King Abdullah Road, connecting King Fahd Sports City and King Saud University. It has a total of 15 stations.

    The Green Line, also known as Line 5, extends 13.3km from King Abdullah Road to the National Museum. With 12 stations, it serves several ministries and government agencies, including the Defence Ministry, the Finance Ministry and the Commerce Ministry, as well as other areas.

    Earlier in December, the RCRC started operating the Blue Line (Line 1), Yellow Line (Line 4) and Purple Line (Line 6).

    The Blue Line connects Olaya Street to Batha; the Yellow Line runs along King Khalid International Airport Road; while the Purple Line connects Abdul Rahman Bin Awf Road with Al-Sheikh Hassan Bin Hussain Road.

    King Salman Bin Abdulaziz Al-Saud inaugurated the Riyadh Metro on 27 November last year.

    The network spans 176km. Four of the stations have been designed by signature architects.

    The metro is part of the Riyadh Public Transport Project, which encompasses metro and bus systems. The project aims to relieve traffic congestion.

    The $23bn project was scheduled to open in 2018, but construction activity slowed due to disputes over prolongation and the disruption caused by the Covid-19 pandemic.

    The RCRC awarded the main construction packages for the scheme on 28 July 2013.

    In November 2022, the RCRC struck a deal with three contracting consortiums working on the Riyadh Metro scheme regarding the completion of the project’s remaining works.

    The Fast consortium won lines 4, 5 and 6, reportedly valued at $7.82bn. The Bacs consortium was awarded lines 1 and 2 for $9.45bn, while Arriyadh New Mobility secured Line 3 for $5.21bn.

    US firm Bechtel leads the Bacs consortium. Italian firm Ansaldo STS is the leader of the Arriyadh New Mobility group, and Spanish firm FCC Construccion heads the Fast consortium.

    AtkinsRealis has delivered programme management and supervision services for the operations and maintenance of the Riyadh Metro scheme.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14289337/main.jpg
    Yasir Iqbal
  • Firms submit bids for Maaden gold project water pipeline

    17 July 2025

    Saudi Arabian Mining Company (Maaden) has received proposals from local firms for a water pipeline network it plans to build as part of a larger project to develop a new gold mining and processing facility in the Al-Rjum region of the kingdom.

    The Al-Rjum gold mining and processing facility, located in Medina province, is expected to be commissioned by the end of 2027. It will become the largest gold mining operation in Saudi Arabia when operational.

    According to sources, the pipeline is to be developed using a build-own-operate-transfer (BOOT) model. The engineering, procurement and construction (EPC) works will have a duration of 38 months, followed by a 20-year operations and maintenance period.

    Lamar Holding and Alkhorayef are understood to be the only bidders for the proposed Taif to Al-Rjum water pipeline, which forms package B of the Maaden gold mining project.

    The two contractors submitted bids for the water pipeline project on 1 July, sources told MEED.

    The main scope of work involves building a 150-kilometre pipeline that will supply treated sewage effluent water to the Al-Rjum gold mining facility.

    ALSO READ: Saudi Arabia issues mining exploration licences

    The Al-Rjum gold mining and processing facility will have an output capacity of 250,000 ounces of gold a year. The project will increase Maaden’s total gold production to 700,000 ounces a year by 2028, helping the company support Saudi Arabia’s overall goal of doubling gold production by 2030 and achieving a four-fold increase in output by 2040.

    MEED recently reported that Maaden had received bids for a tender to develop accommodation facilities for over 4,500 of its workers at the upcoming Al-Rjum gold mining and processing facility.

    Bids for the Al-Rjum worker accommodation tender, which is also under the BOOT model, were submitted in late June. The operations and maintenance period for this contract is 15 years.

    ALSO READ: Saudi Arabia and Oman open up their minerals potential
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14284263/main3503.jpg
    Indrajit Sen
  • Bahrain and US sign nuclear energy agreement

    17 July 2025

    Bahrain and the US have signed a cooperation agreement covering the field of peaceful nuclear energy.

    The agreement aims to enhance collaboration in nuclear energy, recognising its vital role in sustainable development and energy security. It aligns with Bahrain's ambitious goal of achieving carbon neutrality by 2060 and contributes to global efforts to combat climate change.

    As Bahrain explores alternative energy sources, senior officials have previously indicated to MEED that they are closely monitoring developments in small modular reactor (SMR) technology. This is particularly crucial for Bahrain, where limited land availability poses challenges for solar energy projects. Floating solar plants have been identified as a potential solution, but the exploration of nuclear energy and SMRs remains a priority for future energy diversification.

    The agreement was signed during an official visit to the US by Prince Salman Bin Hamad Al-Khalifa, the crown prince and prime minister of Bahrain.

    The agreement was formalised by Abdullatif Bin Rashid Al-Zayani, Bahrain’s minister of foreign affairs, and Marco Rubio, the US secretary of state.

    Al-Zayani added that the agreement builds upon the Comprehensive Security Integration and Prosperity Agreement (C-SIPA) signed in 2023. The agreement aims to strengthen cooperation in defence, security, emerging technologies, trade and investment.

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

    UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge

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

    > PROJECTS MARKET: GCC projects market collapses
    > GULF PROJECTS INDEX: Gulf projects index continues climb
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14281751/main.jpeg
    Colin Foreman
  • Kuwaiti firm wins $53m Duqm coastal road contract

    17 July 2025

    Kuwaiti contractor Combined Group Contracting Company (CGCC) has won a RO20.6m ($53m) contract to construct coastal roads in Duqm.

    The scope of work covers the construction of roads with a total length of 14 kilometres, including a coastal road, a proposed service road, an extension to an existing service road, a resort street, four roundabouts, future extensions and proposed links.

    The contract duration is two years from the start date of construction.

    MEED reported in August 2023 that CGCC had emerged as the lowest bidder for the project.

    GlobalData estimates that the construction industry in Oman will grow by 3.6% in real terms in 2025, supported by rising foreign direct investment (FDI) in the country, particularly in the manufacturing sector, as well as investment in the energy and transport sectors.

    The infrastructure construction sector is estimated to grow by 5.7% in 2025, before recording an annual average growth of 5.2% between 2026 and 2029, supported by the government’s investment in upgrading road and airport infrastructure.

    CGCC’s contract win in Oman comes shortly after a key contract win in the UAE, worth AED685m ($186m).

    The scope of work under this contract encompasses the upgrade works on Emirates Road, from the Al-Badea intersection in Sharjah to the E55 intersection in Dubai.

    The UAE’s Ministry of Energy & Infrastructure is the project client.

    The contract duration is 25 months.

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

    UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge

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

    > PROJECTS MARKET: GCC projects market collapses
    > GULF PROJECTS INDEX: Gulf projects index continues climb
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14281451/main.gif
    Yasir Iqbal
  • Algeria awards $855m contract for gas production project

    17 July 2025

    Register for MEED’s 14-day trial access 

    Algeria’s national oil and gas company Sonatrach has awarded an $855m contract to China’s Jereh Group for a project to develop facilities at the Rhourde Nouss gas field.

    Jereh Group said that its subsidiary Jereh Oil & Gas Engineering will build a natural gas booster station in the Rhourde Nouss gas field and upgrade and renovate related transmission pipelines.

    The Yantai-based company cited a letter of award from Sonatrach and said that the contract will boost the company's footprint in North Africa’s oil and gas engineering service sector.

    The Rhourde Nouss boosting project will centralise the boosting of natural gas produced by the gas field and the adjacent Gassi Touil gas field, to improve their production efficiency and natural gas processing capacity, the company said.

    Sonatrach, the largest gas producing company in Africa and the largest state-owned enterprise in Algeria, will pay $629.1m and $226m for the construction of the project, Jereh said.

    Jereh's growing footprint

    Jereh has been expanding overseas in recent years and has won contracts with major Middle Eastern oil and gas clients, including Saudi Aramco, Abu Dhabi National Oil Company (Adnoc) and Kuwait Petroleum Corporation.

    In June 2021, the company was awarded a contract for the design, procurement and construction of a gas debottlenecking project in Algeria.

    The project was located in the Bir Rebaa Nord and Rhourde Ouled Djemma fields, which are located in the eastern Algerian desert, about 300 kilometres southeast of Hessi Messaoud.

    The client on that project was Groupement Sonatrach Eni, a joint venture of Sonatrach and Italian energy company Eni.

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

    UAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge

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

    > PROJECTS MARKET: GCC projects market collapses
    > GULF PROJECTS INDEX: Gulf projects index continues climb
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14278458/main.jpg
    Wil Crisp