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Aramco’s $450m PPP heads for financial close

23 January 2024

The team that won the contract to develop and operate Saudi Aramco's public-private partnership (PPP) accommodation complexes at Haradh and Wudayhi in the Eastern Province of Saudi Arabia has signed the lease agreement for the project.

It also expects to reach financial close for the project soon, according to a source close to the scheme.

MEED understands local lenders led by Riyad Bank have agreed to provide debt for the project.

Saudi Aramco first tendered the Haradh and Wudayhi PPP contract in 2019, before retendering it in 2022.

A team comprising local companies Lamar Holding and Asyad Group won the retendered contract, valued at about $450m, in December 2022, as MEED reported.

The complexes are expected to house up to 2,800 employees across 11 residential buildings. There are also two mosques and a clinic, as well as a refurbished recreational facility and an expanded medical facility at each complex.

The scope of the contract also includes the construction of a sewage treatment plant operations building and the installation of chiller plants, according to regional projects tracker MEED Projects.

Saudi Aramco received three bids for the retendered contract on 25 August 2022. The other two bidding teams were led by Al-Rajhi Development Company and Yamama, both based in Saudi Arabia.

Retender

In November 2021, Aramco selected the local Al-Rajhi Development Company and India’s Shapoorji Pallonji to deliver the build-own-operate-transfer project.

Shapoorji Pallonji was to deliver construction works, with Al-Rajhi operating the project for a concession period of 20 years.

The ramp-up in construction activity in the kingdom, combined with global supply chain issues and increased interest rates, drove up costs and resulted in renegotiations, with Aramco deciding to reissue the tender, a source close to the project told MEED in 2022. 

Aramco is procuring two other housing PPP schemes. 

A team led by El-Seif was awarded the contract to develop and implement the Tanajib housing PPP project in early 2022. The project scope includes the development of 2,500 housing units, in addition to a food court, parking facilities and infrastructure.

In January 2023, a team led by Lamar Holding is understood to have won the contract to develop Aramco's staff accommodation located on Abu Ali Island. The project is expected to house 700 employees and is valued at an estimated $250m.

MEED's October 2023 special report on Saudi Arabia includes: 

> COMMENT: Riyadh reshapes its global role
> POLITICS: Saudi Arabia looks both east and west
> SPORT: Saudi Arabia’s football vision goes global
> ECONOMY: Riyadh prioritises stability over headline growth
> BANKS: Saudi banks track more modest growth path
> UPSTREAM: Aramco focuses on upstream capacity building
> DOWNSTREAM: Saudi chemical and downstream projects in motion
> POWER: Riyadh rides power projects surge
> WATER: Saudi water projects momentum holds steady
> GIGAPROJECTS: Gigaproject activity enters full swing
> TRANSPORT: Infrastructure projects support Riyadh’s logistics ambitions
> JEDDAH TOWER: Jeddah developer restarts world’s tallest tower

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Jennifer Aguinaldo

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