Alstom secures Al-Ula tram deal
25 October 2023
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Saudi Arabia’s Royal Commission for AlUla (RCU) has announced that France’s Alstom will provide rolling stock and systems for the Al-Ula tram scheme.
The first phase of the tram scheme is a 22.4-kilometre-long line with 17 stations, operated by 20 trams. It will link Al-Ula International airport to five of the area’s historical regions. The system is scheduled to start running in 2027.
France’s Systra is the consultant.
MEED reported in May that RCU was in advanced discussions with Alstom for the project after technical requirements meant other potential bidders withdrew interest in the scheme.
In April 2021, the RCU unveiled an investment plan worth SR57bn ($15bn) to regenerate Al-Ula. About $3.2bn has been allocated for infrastructure development, including the tram and renewable power generation.
| Saudi growth dips while project activity soars |
Oil production cuts trim public sector growth, but private sector thrives

*=Year-to-date | Sources: IMF, MEED Projects, MEED
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

Exclusive from Meed
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KBR re-evaluates design for Libya oil project10 July 2026
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Qiddiya to tender high-speed rail in September10 July 2026
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Contractor appointed for Dubai’s One B Tower9 July 2026
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Conflict fails to dent Saudi Arabia’s A+ rating13 July 2026
Ratings agency Fitch has affirmed Saudi Arabia's long-term foreign-currency issuer default rating at A+ with a stable outlook, citing fiscal and external balance sheets that remain significantly stronger than those of similarly rated peers.
In a rating action published on 10 July, Fitch said the kingdom's economy and public finances had proved resilient to the US-Iran war, supported by significant fiscal buffers in the form of deposits and other public-sector assets. Oil dependence and governance scores had improved but remained weaknesses, while geopolitical risk stayed high.
A deal allowing a ceasefire and the reopening of the Strait of Hormuz is broadly in place, although Fitch warns that flare-ups highlight risks to its near-term sustainability. The agency says further US or Israeli military action against Iran remains quite likely. It expects the reopening of the strait to return the oil market to oversupply, pulling Brent down to an average of $60 a barrel in 2028 from $87 a barrel in 2026.
Fitch forecasts real GDP growth will slow to 0.6% in 2026, hit by disruption to trade during the closure of the strait. Flows through the East-West pipeline support oil production during the war, but output at an annual average of 9 million barrels a day will sit below the 2025 level.
Growth is expected to rebound in 2027 as flows normalise, before easing to 2.9% in 2028, supported by the phased opening of gigaprojects and guidance that sovereign wealth vehicle the Public Investment Fund will keep domestic spending largely unchanged.
The fiscal deficit is projected to narrow in 2026 as higher oil prices offset lower volumes, before widening to 4.7% in 2027 on a fiscal breakeven oil price of $94 a barrel. Fitch projects government debt will rise to 41.3% of GDP by the end of 2028, from 31.8% at the end of 2025, above the government's guidance of a 40% ceiling.
The agency describes the external balance sheet as healthy, with sovereign net foreign assets of 38.5% of GDP by the end of 2028. Banks have been resilient to the war, with non-performing loans at 1.1% and a Tier 1 capital ratio of 19.2% at the end of the first quarter of 2026.
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KBR re-evaluates design for Libya oil project10 July 2026

US-headquartered KBR is responsible for re-evaluating the front-end engineering and design (feed) for the project to develop the J6 North Gialo field in Libya, according to industry sources.
In June, MEED reported that Libya’s Waha Oil Company (WOC), a subsidiary of the state-owned National Oil Corporation (NOC), had launched a review into the tender process for the J6 North Gialo oil field development project, and that this would include re-evaluating the feed work.
The Waha concessions are held by a consortium of Libya’s NOC, which holds 59.16%; TotalEnergies, holding 20.42%; and US-based ConocoPhillips, with 20.42%.
They are operated by WOC, which is 100% owned by NOC.
KBR has previously provided engineering services for major national projects in Libya, such as the Great Man-Made River project, which is widely recognised as the largest irrigation project in the world.
In March, KBR was awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the South Refinery project in Libya’s southern city of Ubari.
Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the engineering, procurement and construction (EPC) phases of the project.
The EPC work is expected to be executed over a 50-month period.
In its statement, KBR said that the project is aligned with its “long-standing commitment to advancing vital oil and gas infrastructure in Libya”.
In March, MEED reported that South Korea’s Daewoo had pulled out of the tender process for Libya’s J6 North Gialo oil field development project.
Daewoo had formed a partnership with Egypt’s Petrojet to participate in the tender process.
The only other company to submit a bid for the project was UK-based Petrofac, which filed for administration in October last year.
In January, TotalEnergies signed an agreement extending the Waha concessions agreement up to 31 December 2050.
This agreement set new fiscal terms, allowing an increase in the production of these concessions that were, at the time, producing about 370,000 barrels of oil equivalent a day (boe/d).
In January, TotalEnergies said that the deal paved the way for “a new phase of investments, including the development of the North Gialo field, which is expected to add 100,000 boe/d of production”.
The J6 North Gialo project is the first of three field development projects that WOC has prioritised.
The other two are known as NC98 and Gialo 3.
Together, the three projects are expected to double Waha’s production from about 300,000 barrels a day (b/d) of oil to 600,000 b/d.
The Waha concession covers 13 million acres.
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Qiddiya to tender high-speed rail in September10 July 2026

Saudi Arabia’s Royal Commission for Riyadh City, in collaboration with Qiddiya Investment Company and the National Centre for Privatisation & PPP, are expected to float the tender in September for the Qiddiya high-speed rail project in Riyadh.
MEED understands that the clarification process is ongoing for the engineering, procurement, construction and financing (EPCF), as well as the public-private partnership (PPP) packages.
The Qiddiya high-speed rail project, also known as Q-Express, will cover 84 kilometres, connecting King Salman International airport and King Abdullah Financial District with Qiddiya City.
In April, MEED exclusively reported that the clients had received prequalification statements from firms for the EPCF package of the project.
MEED also reported in May that firms were forming joint ventures for the PPP package of the project.
The line will operate at speeds of up to 250 kilometres an hour, reaching Qiddiya in 30 minutes.
There are five stations planned: Qiddiya Grand Central Station, Qiddiya Uptown Station, King Abdullah Financial District, Terminal 6 King Salman International airport (KSIA) and Iconic Terminal at KSIA.
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Middle East construction cost inflation to hit 5.1% by 20279 July 2026
Construction cost inflation in the Middle East is forecast to reach 5.1% in 2027, the second-highest of any region worldwide, as global demand for data centres tightens contractor capacity and deepens shortages of skilled labour.
The projection comes from the Global Construction Market Intelligence report, published by UK programme manager Turner & Townsend. The report draws on data from 112 markets across 44 countries, gathered between 2 March and 20 March 2026.
Only Africa is expected to see steeper cost escalation, at 7%. Australia and New Zealand follow the Middle East at 4.9%, while the EU records the lowest figure at 2.8%. Globally, construction cost inflation is set to rise from 4.2% in 2025 to 4.5% in 2026 before flattening in 2027.
The report identifies a two-speed market. Data centres are now the most in-demand construction sector globally, followed by industrial and logistics. More than 70% of the 112 markets surveyed report tightening or overstretched contractor capacity in the data centre sector. By contrast, more than 79% of markets show balanced or spare capacity across hospitality and leisure, residential and commercial development.
Skills shortage
Labour availability has displaced material costs as the primary driver of cost escalation. About 71% of markets report labour shortages. Skills deficits are most acute in mechanical, electrical and plumbing (MEP) trades, with 87% of markets reporting MEP shortages. These trades are central to data centre delivery.
The findings carry weight for the GCC, where sovereign programmes in Saudi Arabia and the UAE are competing for the same contractor pools that artificial intelligence (AI) infrastructure now draws on. Regional governments have announced large data centre commitments alongside gigaprojects, housing and transport schemes, placing further strain on an already stretched supply chain.
Turner & Townsend says that construction input costs have stabilised over the past year, with supply chain resilience built since the pandemic limiting the impact of recent volatility. Cost drivers are becoming more localised and sector-specific rather than the product of international shocks.
Energy market exposure introduces a separate risk. The report cites oil prices, higher transport and freight costs, and volatility in petrochemicals inputs as significant challenges. Disruption to shipping routes lengthens lead times and adds supply chain volatility.
Conflict assumptions
The baseline scenario assumes a relatively short-lived conflict in the Middle East and a moderate rise in energy commodity prices in 2026. A prolonged or escalating conflict would produce more pronounced effects on inflation, supply chains and construction costs.
New York remains the world's most expensive construction market at $7,938 a square metre, followed by San Francisco at $7,883 and Geneva at $6,985. London ranks fifth at $6,032.
North America carries the highest regional labour costs, with an average hourly wage of $79.5, ahead of the EU at $75.6 and Australia and New Zealand at $68.
Digital adoption remains uneven, though momentum is building. Sixty-six percent of markets report that AI capability now carries more weight in tendering and client discussions than it did 12 months ago.
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Contractor appointed for Dubai’s One B Tower9 July 2026

Dubai-based construction firm Naresco Contracting has been awarded a contract to build One B Tower, located on Dubai's Sheikh Zayed Road.
Local real estate developer Wasl Group awarded the contract.
It covers a 47-storey high-rise tower offering a mix of one- to four-bedroom residential units.
The project is also known as One Billion Meals Endowment Tower.
The enabling works were undertaken by local firm APCC Building Contracting.
Netherlands-headquartered UN Studio is the project architect.
Dubai-based firm Studio International Engineering Consultants is the project consultant.
The project is slated for completion by 2028.
This is the second major contract to have been awarded by Wasl Group this year for a residential development.
In January, the firm awarded an estimated $250m deal to build the Avenue Park Towers project in Dubai to South Korean contractor Ssangyong Engineering & Construction.
The development comprises two mixed-use buildings offering residential and commercial facilities. One of the towers will have 43 floors while the other will have 37.
The project is slated for completion by 2028.
Wasl Group's latest contract award in the UAE market is backed by heightened real estate activity in the construction sector, with schemes worth over $323bn in the execution or planning stages, according to UK analytics firm GlobalData.
The company forecasts that output from the UAE’s residential construction sector will grow by 3% in real terms in 2026-29, supported by infrastructure, energy and utilities developments, as well as residential construction projects.
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