A case study in procurement
18 March 2025

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While it may not be in the headlines as much as some of its more eye-catching official gigaproject counterparts, Roshn has already delivered thousands of residential units in Saudi Arabia as it seeks to fill the upscale and community living housing map.
Launched in 2020, the Roshn gigaproject is a component of the Vision 2030 plan to achieve 70% home ownership among Saudi nationals by 2030. Alongside the National Housing Company, it is the delivery vehicle for government-backed housing construction as Riyadh seeks to meet the shortfall in available stock.
Its first project was its Sedra community in the north of the capital. Currently on its fourth of eight delivery phases, the multibillion-dollar masterplanned development will comprise 30,000 homes over 20 million square metres (sq m) when completed.
Roshn’s second Riyadh community under construction is Warefa in the northeast of the capital. More compact than Sedra, it will have 2,300 units over an area of 1.4 square kilometres, with 150,000 sq m of green open space.
Three years after the launch of its first projects, Roshn announced Marafy, its first scheme in Jeddah and its largest mixed-use development to date. Designed to accommodate more than 130,000 residents, Marafy will be built around an 11-kilometre, 100-metre-wide canal, linking with Obhur Creek in the northern outskirts of the kingdom’s second city.
Already breaking ground, Marafy’s first core component is the Alarous residential community, which will offer 18,000 units over a 4 million sq m land area.
Elsewhere in the kingdom, Roshn’s other planned community projects include Almanar in Mecca, Alfulwa in Hofuf and Aldanah in Dhahran. Between them, these schemes total more than 50,000 units. It is expected that thousands of additional homes in other parts of the kingdom will be announced by the developer in the next two years.
Delivering such projects at many different locations is a complex exercise, requiring procurement strategies that not only encompass on-time and on-budget completion, but also ensure that local content is maximised while at the same time maintaining stringent quality standards.
Tasked with handling Roshn’s overall procurement strategy is Iain McBride, the gigaproject developer’s head of commercial.
It is expected that thousands of additional homes in other parts of the kingdom will be announced by the developer in the next two years
Like other gigaprojects in the kingdom, McBride and his procurement team have had to deal with the twin challenges of soaring cost inflation and maximising local content in materials and equipment.
The five official gigaprojects – Diriyah, Neom, the Red Sea Project, Qiddiya and Roshn – are free to employ their own procurement rules and processes, and each has taken a different approach to address its specific requirements. For example, Red Sea Global uses a construction management approach wherein it contracts directly with companies and suppliers that would normally work as subcontractors under the main contractors.
Similarly, Diriyah Company employs a strategy of bundling several smaller contract packages into a single large contract, as a means of consolidating work to ensure lower costs and maintain contractor interest.
Hear directly from the gigaproject owners at the biggest construction event – The Saudi Gigaprojects 2025 Summit, happening in Riyadh from 12-14 May 2025. Click here to know more
Demand signalling
The nature of Roshn’s mainly residential projects means that from the outset it knew it would need thousands of items with similar specifications, such as doors; glass panes; sanitaryware; and heating, ventilation and air-conditioning systems.
To secure this supply chain, early on the company identified local manufacturers of these products and reached long-term agreements with them for the delivery of required materials.
“Our first step was signing a lot of long-term partnership agreements through master purchase agreements where we could leverage preferential rates,” says McBride, speaking to MEED in late January.
“Ultimately, it's all about balance and risk – derisking the opportunities for the supply chain by telling them how many doors, for example, we're going to need each quarter for the next five to 10 years. It gives confidence to the manufacturers that they can start committing to.”
Roshn was the first of the gigaprojects to publicly signal its demand requirements. In 2021, it announced that it would require at least 5 million doors, 3.5 million air-conditioning units, 4.3 million windows, 80 million sq m of tiles and 6.5 million pieces of sanitaryware. These numbers have since changed, but they are indicative of the scale of the supply chain challenge.
Armed with the knowledge that Roshn is both supported by its parent, sovereign wealth vehicle the Public Investment Fund (PIF), and that it is a central element of Saudi Vision 2030, local manufacturers had the confidence to commit to investing in production capacity to meet its needs.
Significantly, most of these deals have been with manufacturers within the kingdom, thereby maximising the local content aspects. Just as importantly, Roshn has not had to make any fixed orders – so-called ‘take-or-pay agreements’ – with suppliers, such is the latter’s faith in the developer.
“For the time being, we’ve not had to make any firm commitments,” says McBride. “We did look at it at one point, but our approach has always been to keep it as simple as possible by listening to the supply chain and seeing what they need. When we were speaking to them, it wasn’t their number one driver; they weren’t screaming at us saying, ‘We need you to give us a firm order’.
“Now, many people think a take-or-pay agreement is essential – where you commit to ordering [a certain quantity] of materials over a period of months or years and, if you don’t, you have to pay a penalty, thereby adding risk and complexity for the developer.
“What we were able to agree instead was that we'll be open and transparent with [the suppliers about] what we need. We said to ourselves, ‘Let's get a good price that works, whether we buy directly from the supplier or whether we include that supplier within our tenders with major contractors’. And we’ve seen great success with that approach, with multiple companies.”
The localisation push is supported by the design process. Wherever possible, the designs for Roshn’s projects incorporate and specify equipment and materials that are known to be manufactured locally.
There have been instances where specific, specialised materials and products are not produced in the kingdom, or not in the quantities required, such as marble and certain architectural facades.
Where this is the case, Roshn is keen to explore how it can help to build in-kingdom capacity. The developer has initiatives through which it looks to co-invest in production facilities that come with high capital requirements.
As McBride explains, Roshn is only one part of the huge and rapidly accelerating Saudi projects market ecosystem, and in helping to increase capacity, it is also putting itself in a position to help other developers with their supply chain needs.
A case in point is Roshn’s contract with China Harbour Engineering Company, which was awarded the $2bn deal in 2023 to build villas at Sedra and Warefa.
Part of the contract requires the Chinese contractor to set up a precast manufacturing facility on site at Sedra. In this way, Roshn could not only ringfence the plant for its own needs, but when it no longer requires the output, other projects could benefit from its production capacity.
“The factory has a 15-year lifespan, so any additional capacity will be there for another 10 years after our requirements are met,” says McBride. “In Riyadh, we have Expo 2030, the new airport, the stadiums and many other projects that could draw on its output.”
There are some situations where even this is not enough, particularly when it comes to contracting expertise. One such case is Roshn’s mandate to develop a 45,000-seat stadium in the southwest of Riyadh as part of the kingdom’s Fifa World Cup 2034 plans. On such a complex, highly engineered project, Roshn has insisted that an international contractor teams up with a local company as a condition of tender participation.
This insistence is based on Roshn’s experience overseeing the construction of a football stadium in Dammam alongside co-developer, Saudi Aramco. The project, which is being built by a joint venture of Belgium’s Besix and the local Albawani, is proceeding at a rapid pace and progress has been relatively trouble-free.
McBride says: “If we have to go abroad, let’s go abroad. But make sure it’s done in a smart way and that we’re not just throwing money out of the kingdom.”
Early contractor involvement
On the issue of contracting, it is well known that the massive amount of work in Saudi Arabia is stretching contractors to the limit, pushing up prices and straining labour, engineering and equipment resources.
Roshn’s approach to this challenge has been to engage with contractors at the earliest possible stage of project planning, specifically at the design phase, through an early contractor involvement (ECI) procurement framework. In this way, the company is able to obtain contractor feedback during concept and design and subsequently lower construction risk by improving a project’s constructability.
“It's about signposting the demand by getting the contractor in early, where you can really influence the design, the buildability and the value-engineering opportunities,” says McBride. “Ideally, we bring them in as quickly as possible during the concept stages, when there's very little cost to changing things.
“The worst thing for a contractor is receiving a [request for proposal] cold. They have to … come back in four weeks and then be squeezed for a best price, whereas with ECI they can add value. They really appreciate that.”
When asked to quantify the cost benefits of such an approach, McBride is forthright: “It’s not even a case of doing the maths,” he says. “We have a great example of where it’s worked on our Aldanah project in Dammam. We selected the contract very early on and locked in the floor plans and facades that we wanted. We were then able to deliver a street of 10 show homes [that took] not much more than four months to design and construct.
“The saving, in terms of time, was massive; we probably halved the duration. I probably wouldn’t be exaggerating if I said it saved about a year.
“There are two ways you can follow your engineer,” he continues. “One: you can follow them early and make sure that the way you're looking to save costs is in areas that are not impacting the customer.
“Or two: the worst thing you can do is get to the end and you have a full structural design that could be over-engineered and you’re spending money in the wrong places.
“We don’t want to get to a point where we're trying to value-engineer by cutting things out that are important to customers,” McBride explains. “And that's what you avoid by having this early contractor involvement.”
The company is able to obtain contractor feedback during concept and design and subsequently lower construction risk by improving a project’s constructability
Unlike the other gigaprojects, Roshn has been in the favourable position of being able to raise some revenue by marketing and selling its properties off plan. While this has been beneficial from a development perspective, it has also meant that the developer must get its pricing and housing specifications right if it is to develop homes within an already-defined budget.
Having a contracting partner on board during the design and specification stage facilitates the conversation between the property sales team, which is informing on market requirements, and the builder, who can deliver within the designed cost and quality parameters.
This is in contrast to many real estate developments for which sales are completed before the construction estimates come in, potentially undermining the business case.
The step beyond ECI is for contractors and suppliers to partner with Roshn to inject equity into the projects by acting as co-developers. McBride points to several planned mid-rise towers at Marafy that could be a starting point for this.
Contractors financing projects or bringing in replacement equity has long been an ambition in the region, but builders have been reluctant to adopt this approach. Nonetheless, McBride is confident that it could happen, indicating that there has already been strong interest from the contracting community.
Cost inflation
Another major talking point in Saudi construction is the escalating costs caused by high inflation, logistical challenges and a tightening of contracting and skilled labour capacity.
In many cases, this has required the rescoping of projects, revisions to timelines and even the scrapping of elements. Neom is arguably the best example of this, as it has reprioritised The Line and is facing an estimated cost of $50bn for building each of its first three modules – far in excess of original estimates.
Roshn’s approach to the challenge is to be as open and transparent as possible with the contractor and supplier community. This has involved outlining a long-term pipeline of work that gives the supply chain confidence about its requirements, enabling them to fix in long-term pricing structures. In return, the developer expects prices to come in competitively.
“It’s no secret within the supply chain market that Roshn has quite aggressive price points,” says McBride, a former chartered surveyor who, prior to joining Roshn, worked as a quantity surveyor and cost-management director at consultants Faithful+Gould (now AtkinsRealis) and Rider Levett Bucknall.
“What we're trying to do is engage early, build trust with the contractors, let them see we’re a good client that's going to pay and have honest and fair contracting terms, and work together to try and solve issues post-contract.
“We don't mind if there's inflationary pressures because of commodity prices increasing. But what we're trying to avoid is inflationary prices through just the demand increasing.
“An innovative way that we've implemented this even on our lump-sum contracts – our traditional Redbook or older contracts – is that we have preferred supplier agreement clauses in them,” he adds.
“So, rather than a traditional bill of quantities (BoQ) that has a rate, a quantity, a total, within our rate section we have the material supply rate, the installation rate and then everything else, such as overhead profit. We protect the installation rate, so it's not a percentage of the material; it's a fixed SR100 a square metre to install, for example.
“One of the big frustrations for contractors is [that the supplier has] a material we think they're going to deliver. It's maybe not available, so they submit alternative materials. The client keeps rejecting it – it's not what they want – and it becomes a delay; it's painful.”
McBride gives the example of a pre-approved bathroom sink. Thanks to Roshn’s relationships with key long-term suppliers, the company is able to negotiate better rates for sanitaryware than would be available to a contractor on an ad hoc basis. If the developer’s rates for sinks are better than the BoQ, it splits the savings 50:50 with the contractor.
“The contractors are winning out of that exercise, we're winning out of it and, ultimately, the customers are winning out of it as well, because we’re passing on those savings,” says McBride.
Flexibility
The benefits to contractors and suppliers extend to payment terms. In today’s sellers’ market, vendors are effectively able to pick and choose the clients they want to work for. As a result, clients – including the gigaprojects – have had to introduce more flexible payment terms and develop market reputations for paying on time.
Roshn may lead the pack on this, with an average payment time from invoice to payment of just 13 days in 2024. A decade ago, this would have been unheard of, but it is now increasingly becoming the norm among the gigaprojects.
In addition, like its PIF peers, Roshn has done away with tender fees and tender bonds, viewing them as outdated means of enforcing vendor participation, especially given the tight liquidity and cashflow situation in the projects market in Saudi Arabia.
Will such flexibility ever extend to performance bonds? McBride is sceptical, pointing to the fact that Roshn’s strong relationship with local banks allows to it facilitate credit agreements between contractors and their lenders. Being a gigaproject developer supported by the PIF – and by tacit extension the state – also helps provide the underlining ease of mind for financers.
Nonetheless, Roshn also takes a proactive approach with advanced payments, enabling up to 20% of the total contract value at the initial stage of the project.
“We've been quite clever in how we do this,” says McBride. “We don't go and release 20% straight away. We’ll do 10% and then, when we’ve evidence that you’ve expended that 10% on mobilisation and site establishment, we’ll release the second 10% tranche.”
Subcontractors
One of the chief sticking points in the kingdom’s projects ecosystem in the past decade has been the capacity and capability of its subcontractors.
The payments crisis in 2017-20 forced many main and general contractors to reduce their permanent labour forces, plant and general resources. Wary of a repeat, most have retained their leaner structure and so have turned increasingly to subcontractors for their manpower and delivery requirements.
In theory, this makes sense, but in practice subcontractors in Saudi Arabia are themselves often overstretched in terms of both delivery capacity and labour availability. In turn, they frequently use their own subcontractors, which then also outsource, to the point that specific elements of a project may be completed by companies very far down the supply chain – with the quality issues that this implies.
Roshn’s solution is to ensure any subcontractor on site goes through a vetting process encompassing quality and financial checks, thereby ensuring it has full visibility on every company on site.
Increasingly, Roshn is dealing with suppliers directly, under supply-install contracts. This can create interfacing issues with the main contractors, however, which are ultimately responsible for the project’s delivery.
“We have to be quite careful on that,” McBride says. “We have to go through all the checks and balances during the prequalification process because if we are going to give a subcontractor to a contractor that we're saying is pre-vetted by Roshn, we could be opening the door to lots of claims from the main contractor against us. So, vetting for us is absolutely crucial.”
Roshn is also working with smaller suppliers and subcontractors to help them evolve and grow, so that they can start taking on smaller main contractor roles themselves.
“Not every construction package we award is in the billions of riyals,” says McBride. “Our thinking is to let the big tier-one contractors focus on the multibillion-riyal deals while we encourage the smaller ones to grow as part of our supplier development programme.”
To achieve this, the developer holds events and bootcamps with its vendors to discuss best practices on subjects including health and safety, variation procedures and how to submit good tender returns.
Roshn is also working with smaller suppliers and subcontractors to help them evolve and grow
Building information modelling
Vendor education also extends to the use of building information modelling (BIM) and other construction technologies.
BIM is mandatory on Roshn’s projects, as it is on the other gigaprojects. While use of the technology is standard across almost all main contractors in the region, its take-up among smaller companies in the supply chain has been slower, with firms pointing to the cost of its adoption and integration as a barrier, as well as the fact that some clients, particularly government ones, view it as providing limited benefit.
Roshn’s task in this area is made difficult because its projects are less complex from an engineering and construction perspective.
“We’re building villas; it’s completely different to building stadiums or airports,” McBride says. “Can these contractors build from [two-dimensional] drawings? Yes, of course they can. You're not going to convince a smaller contractor that all of these benefits will make it easier to build because they know how to build. They've been doing it for decades.
“But the savings are in making it easier to procure, savings in the repeatability, and in the change control. If you upskill yourself on a Roshn project, you are building your capability, which you can then [demonstrate] to other clients as proof you can go after bigger and more complex projects. It's something that the whole industry has to get behind.”
Indeed, there is much to learn from Roshn’s approach to delivering its infrastructure and building plans. While the comparatively straightforward nature of its projects means that its procurement strategies may not be suited to those gigaprojects with more iconic designs, for many other developers it is a case study in efficient processes that have proven effective in delivering work on time and to budget.
This is just as well given that Roshn is set to embark on the next stage of its journey, with its focus on the more complex Marafy city development in Jeddah and Roshn Stadium in Riyadh. However, the evidence suggests that from a procurement strategy perspective, it is well-positioned to also make this a success.
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Accor expects Dubai hotel recovery by mid-202717 July 2026

Paris-headquartered hotel operator Accor expects Dubai’s hotel market to return to pre-conflict occupancy levels by the end of the first quarter or early second quarter of 2027, with room rates lagging the volume recovery by several months.
Duncan O’Rourke, chief executive for the Middle East, Africa and Asia Pacific at the hotel operator (pictured right), said the group had maintained profitability across its Dubai portfolio during the conflict period through cost control and revenue management, but acknowledged that rates and occupancy had fallen materially from January and February levels.“There is no question that this crisis affected Dubai,” O’Rourke said at a media briefing in Dubai on 26 June. “As for occupancy in Dubai, we managed – through profit protection and cost control – to keep the hotels in a positive position, so we weren’t losing money.”
He said the arrival of the summer low season provided a degree of relief. “If there is a time to slowly slide out of this crisis, it is the right time, which is now. What I see going forward is that volumes will come back. You will not have the rates immediately that you had in January and February. By the end of Q1 or Q2 next year, I think you will get close to where we were.”
Luxury first
O’Rourke said the luxury and upper-upscale segment was likely to lead the recovery, consistent with the pattern observed after previous crises.
“Generally, when you have a crisis, the first segment to click back quicker is the high-end luxury. People then think: it is not about whether I should go – it is, let’s go. We saw that in Covid. Fairmont is well positioned to do that, and the Sofitel and Maison brands are in the stage of recovery going forward.”
Jean-Jacques Morin, group deputy chief executive at Accor (pictured right), said the UAE’s underperformance had been contained within Accor’s broader international portfolio that continued to grow.“The Middle East is about 10% of the network,” he said. “That also explains why my tone on the capability of the results is so positive – not only do you have the hedging across geographies, but it is also, in the end, only one part of the business.”
Rate outlook
Morin dismissed concerns that the conflict had structurally weakened Dubai’s pricing power, drawing a parallel with the period following Covid-19.
“When we came out of Covid, everybody said those prices would never hold. The question at every analyst call was always the same: your pricing strategy is unsustainable. Guess what? Nothing changed. The prices now, three or four years later, are still the same.”
He argued that consumers consistently prioritise travel expenditure when reallocating budgets. “What you see when the economy goes sideways is that people reallocate disposable income differently. People are basically redirecting the way they do things and keeping the same amount they want to spend, but spending it differently.”
Morin also said Dubai has a track record of outpacing expectations after previous disruptions. “The first part of the world, post-Covid, that came back to positive RevPAR was the Middle East – it was Dubai. People forget that. The capacity of this part of the world to rebound, and the capacity of the industry to rebound in general, is always misunderstood.”
No pullback
Accor said it had not paused or cancelled any development commitments in the region as a result of the conflict. “We did not change anything from a strategic perspective,” Morin said. “The last thing you want is to pull back, because this is going to rebound.”
The group has also used the period to accelerate planned refurbishments and redeploy staff across the region rather than reduce headcount.
“We have 380 hotels here – we are the largest player in the Middle East. Where we accelerated refurbishments, we were able to take key employees and move them to larger hotels elsewhere in the region. What people learned during Covid was the cost of layoffs afterwards – bringing people back and retraining them. There was a massive learning curve. This time, discussions with partners about layoffs were less challenging; it was more about accommodating staffing needs during that period,” O’Rourke said.
READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDFStress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.
Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
> AIRPORTS: Dubai and Riyadh reaffirm airport ambitions> INDUSTRY REPORT: Dubai eyes tourism sector recovery> DATA CENTRES: Big Tech falls short on data centre promise> LEADERSHIP: Aramco’s citizen developers accelerate digital changeTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/17695301/main.gif -
CCC selected for $600m Damascus Financial Centre17 July 2026
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Syrian developer Souria Holding has selected Consolidated Contractors Company (CCC) as the exclusive design-and-build contractor for the $600m Damascus Financial Centre (DFC) in Syria.
The two parties signed a memorandum of understanding on 6 July. The agreement covers design management, engineering, procurement, construction, testing and commissioning, handover and defects liability services. Souria Holding chairman Haytham Joud and CCC chairman Samer Khoury signed the agreement.
Souria Holding is developing the project in partnership with the Governorate of Damascus. The developer says the scheme is intended to support the city's long-term economic revitalisation and urban development.
The mixed-use development sits on Plot 47 in the Western Hejaz regulatory area of Damascus' Baramkeh district. The site covers about 32,000 square metres (sq m) and the development will have about 380,000 sq m of built-up area, making it one of the largest mixed-use schemes planned in Syria.
The DFC comprises a five-star hotel, including furnished apartments and serviced apartments; two residential towers; three grade-A office towers on a core-and-shell basis; retail and commercial space at ground and underground levels; and four basement levels for parking and supporting infrastructure.
The first phase of construction involves the delivery of three office buildings with a total above-ground built-up area of 72,000 sq m. The completion deadline is the fourth quarter of 2028.
Lebanon’s Dar Al-Handasah is the frontrunner for the design consultancy role, working for CCC as the design-and-build contractor.
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GCC downstream operators urged to seek used European equipment17 July 2026

The operators of downstream oil and gas facilities in the GCC that are rebuilding after attacks during the regional war are being advised by the insurance industry to procure used equipment from Europe, where a large number of petrochemical facilities have closed down over recent years.
A wide range of refineries and petrochemical plants in the region are currently undertaking repairs and replacing damaged equipment after attacks by Iran.
The attacks started after the US and Israel launched attacks on sites in Iran on 28 February.
Nick Holland, the head of engineering for India, the Middle East and Africa at the US-based insurance broker Marsh, says that many downstream facilities carrying out repairs in the GCC could cut costs and reduce the time it takes to rebuild by making deals with companies in Europe.
“Many plants have shut down in Europe over the past five years,” he says. “These refinery and chemical-plant closures may create an opportunity for Gulf operators to acquire high-quality used equipment.
“We have some incredible demand in the Middle East to recover as quickly as possible, and I would certainly be encouraging operators to take the opportunity to procure second-hand equipment from facilities that have closed down in Europe.”
Earlier this month, Jim Ratcliffe, the chairman of the London-headquartered chemicals company Ineos, wrote an open letter to Ursula Von Der Leyen, the president of the European Commission, saying that the chemical industry in Europe is “highly stressed” and in the midst of a “closure phase”.
He said that nearly 200 European chemical plants had closed down during the past five years.
Holland says that companies in the GCC looking to minimise business disruption and rebuild as quickly as possible should reach out to companies in Europe to obtain equipment that would normally take a long time to procure from equipment manufacturers.
“A new large high-pressure reactor could have a lead time of approximately 110 weeks, so adapting an existing reactor could significantly accelerate recovery,” he says.
“Other possible items include pumps, compressors, rotating equipment and boilers.
“Reusing equipment is unusual but not unprecedented. Used equipment would require inspection, remaining-life assessment, re-engineering and confirmation that it is fit for the new operating conditions.”
Over recent months, there have been reports of downstream oil facilities being hit by Iranian attacks in Saudi Arabia, Kuwait, the UAE and Bahrain.
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Medina tenders Quba Mosque expansion17 July 2026

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Madinah Region Development Authority (MRDA) has tendered a contract to expand Quba Mosque in the Medina region of Saudi Arabia.
The tender was issued earlier this month, with a bid submission deadline of 31 August.
MRDA has appointed local consulting firm Jasara as the project management consultant.
Jasara, in turn, has appointed London-based firm HKA to provide specialist procurement and delivery-model advice and to support the selection of a suitable contracting partner for the project.
Dar Al-Omran has prepared the design for the expansion.
Quba Mosque is located about five kilometres south of the Prophet’s Mosque in Medina.
Project background
Quba Mosque is considered the first mosque established in Islam, in 622 AD. The proposed expansion will increase the mosque’s area from 5,035 square metres (sq m) to 53,000 sq m and raise capacity to 66,000 worshippers, from 12,000.
The expansion will also include the restoration of 57 historical sites and the creation of three pathways to enhance Medina’s spiritual and cultural landscape.
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Bahrain taps consultants for studying use of nuclear power17 July 2026

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Bahrain is exploring the use of nuclear power for domestic consumption as well as for potential export of surplus, with state energy conglomerate Bapco Energies tasked with studying the prospect of building a modular nuclear power plant.
According to sources, the proposed project is being led by BeVentures, the venture capital arm of Bapco Energies, which was launched in July 2024.
Under the plan being studied, power to be produced by the nuclear facility will be supplied mainly to major industrial complexes in the kingdom, such as Aluminium Bahrain (Alba) and Bapco Refining, for clean production of aluminium and refined products, respectively, in line with Bahrain’s ambition of achieving net-zero emissions by 2060.
BeVentures has, in turn, approached global consultancy firms such as Bechtel, Fluor, Kent, Technip Energies and Wood to assist with concept study and early-stage planning and assessment of the modular or small nuclear power project.
Bapco Energies and BeVentures are also considering tapping into private financing and/or equity partnerships, in part or in full, for the proposed project, sources told MEED.
Bapco Energies did not respond to MEED’s request for comment and additional information on the proposed modular nuclear project.
Mark Thomas, the group CEO of Bapco Energies, told MEED in an interview in April last year that BeVentures was considering investments in “ … new technologies that can both help existing business, as well as prepare … for the future, for the energy transition”.
“We’re looking at opportunities principally within our existing businesses around oil and gas production, refining and petrochemicals. But we’re also looking at elements that will prepare us for the future, more into renewables,” Thomas said, without explicitly mentioning nuclear power.
Case for nuclear power
Bahrain’s interest in exploring nuclear power has been driven primarily by the limitations of its hydrocarbon endowment. Given its small territorial size – about 786 square kilometres – Bahrain holds relatively modest hydrocarbon reserves compared with its Gulf peers.
The kingdom produces about 200,000 barrels a day (b/d) of oil, of which the Awali Field, also known as the Bahrain Field, contributes approximately 42,400 b/d.
Most of Bahrain’s crude production – about 145,000 b/d – comes from the offshore Abu Safah field, located in Gulf waters between Bahrain and Saudi Arabia and shared between Bapco Energies’ subsidiary Bapco Upstream and Saudi Aramco.
Bapco Energies has long pursued additional resources to boost oil and gas output. However, the discovery of the Khalij Al-Bahrain basin in 2018 – its biggest find in decades – has yet to live up to its promise. Initially estimated to hold 80 billion barrels of oil and 10-20 trillion cubic feet of gas, the find has not translated into production at the anticipated scale. Other, smaller exploration efforts with foreign players have also yet to yield the desired results.
The kingdom therefore remains heavily reliant on its larger neighbour, Saudi Arabia, for oil and gas supplies, importing about 350,000 b/d from Aramco via the AB-4 pipeline.
At the same time, given its environmental sustainability targets, other forms of renewable energy – mainly solar – are unlikely on their own to enable Bahrain to reach net zero by 2060.
Bapco Energies published emissions-reduction targets in July 2023, in one of the most detailed disclosures by any state energy enterprise in the GCC. It has also engaged advisers including Boston Consulting Group to help devise a strategy to meet its environmental goals, and Standard Chartered to support financing requirements.
Using 2017 as a baseline year, Bapco Energies has committed to reducing absolute Scope 3 emissions in Bahrain by 30% by 2035, and to reaching net-zero Scope 3 emissions by 2060.
In addition, Bapco Energies sets out net emissions-intensity reduction targets for Scope 1 and 2 – also using 2017 as a baseline – of 15% by 2025, 25% by 2030, 30% by 2035, 50% by 2040 and 75% by 2050, with the aim of achieving net-zero Scope 1 and 2 emissions by 2060.
Bahrain has been laying the groundwork to enable it to tap nuclear power for household and industrial needs in the future.
The kingdom is already operating under a Country Programme Framework (2024–29) with the International Atomic Energy Agency (IAEA), which establishes regulatory and safety benchmarks that must be in place before any commercial reactor construction begins.
In July last year, Manama also signed a civilian nuclear cooperation memorandum of understanding with the US. Financed under the US Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST) programme, the partnership provides Bahrain with technical support to develop secure, weaponisation-free civil nuclear infrastructure.
Small modular reactor (SMR) technology could be the most viable pathway forward for Bapco Energies in its quest to develop domestic nuclear power. Unlike conventional large-scale, capital-intensive gigawatt reactors, SMR units – typically under 300MW – require only a fraction of the land area needed for solar capacity of an equivalent output.
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