Meed | Companies confirm Saudi gigaproject slowdown

Companies confirm Saudi gigaproject slowdown

11 September 2024

Companies working on Saudi Arabia’s gigaprojects have expressed concerns about the pace of development in the kingdom despite increased levels of contract awards this year.

The concerns demonstrate how Saudi Arabia’s gigaprojects programme and the marketing hype it has generated risks falling short of market expectations in spite of delivering solid progress with contract awards.

Companies in Saudi Arabia have reported a noticeable slowdown in activity on the kingdom’s gigaprojects programme this year.

During MEED’s webinar on Saudi Arabia’s projects market in late August, attendees were asked: “Have you seen a noticeable slowdown in activity on the gigaprojects programme this year?”. Of the 362 respondents, 72% reported a slowdown, 19% said that activity levels are roughly the same, and 10% reported an increase in activity.

The poll results reflect a significant change in sentiment towards the Saudi market since the start of this year. In January, attendees of another MEED webinar on the Saudi projects market were asked if they anticipated more contract awards in 2024 than in 2023. Over 92% answered that they expected more awards in 2024, building on the record numbers registered in 2023, when there were $44.5bn of contract awards in the kingdom across all sectors.

Since January, there have been reports on how the delivery of The Line at Neom will be phased, as well as rephasing exercises for other projects as budgets come under strain. These exercises followed comments from the Finance Ministry at the end of last year, which admitted that some projects will be slowed down as the government manages its finances more tightly.

The perceived slowdown in activity on the gigaprojects expressed in August is also reflected by data from regional projects tracker MEED Projects. During August this year, no contract awards were recorded on the kingdom’s five official gigaprojects: Diriyah, Neom, Qiddiya, Roshn and the projects being developed by Red Sea Global.

The total value of contracts awarded by the gigaproject developers in August 2023 was $587m, which suggests the performance in August this year was not just a result of a typical seasonal summer slowdown.

The lack of contract awards for the gigaprojects in August bucks the otherwise positive trend for the year. By the end of August, there had been $14bn of contract awards in 2024 compared to $9bn during the same period in 2023, representing a 55% increase on last year. The total registered by the end of August this year is close to achieving the $15.8bn total registered for the full 12 months of 2023.

Major awards this year have included the $4.7bn contract to build dams at Trojena that was won by Italy’s WeBuild and a $2bn contract won by a joint venture of local firm Albawani and Qatari contractor Urbacon Trading & Contracting for the construction of assets in the Wadi Safar development of the Diriyah project in Riyadh. An estimated $1bn design-and-build contract was also secured by a joint venture of local firm El-Seif Engineering Contracting, Egyptian contractor Hassan Allam Construction and Beijing-headquartered China Harbour Engineering Company to deliver infrastructure and building works for Terminal 1 of the port at the Oxagon industrial city development in Neom.

Wider market

The broader Saudi projects market has followed a similar trajectory. By the end of August this year, there had been $72bn of contract awards compared to $44.5bn of contract awards during the same period of 2023. During August 2024, there were $14bn of contract awards, and if the market replicates this performance again, it will have already outperformed the $86bn total recorded for all of 2023.

Major highlights include the National Housing Company (NHC) signing an agreement with Beijing-headquartered China Machinery Engineering Corporation (CMEC) to construct 20,000 housing units for projects being developed by NHC. Another major signing was the Royal Commission for Riyadh City (RCRC) awarding a SR4bn ($1bn) design-and-build contract to upgrade the Wadi Laban cable bridge to the joint venture of Turkish contracting firm IC Ictas and Riyadh-based Al-Rashid Trading & Contracting Company.

Outside of the construction sector, Saudi Aramco has awarded billions of dollars worth of contracts for major projects such as the third phase of the kingdom’s Master Gas System and the Fadhili gas plant.

For some contractors, it is not the volume of work being awarded that is the main issue but rather the pace at which contracts are awarded.

“We were rushed to submit bids for a major project before the end of last year. There have been changes to the scope and clarifications, but ultimately, there is still no decision on a contract award,” says an international contractor working in Saudi Arabia.

Payments are another perennial concern for companies working on projects in Saudi Arabia and the rest of the GCC. Despite the buoyant market conditions, most companies still say that getting paid on time is a problem. During the MEED webinar in August, attendees were asked if their companies were being paid on time for work on projects in the GCC. Of the 382 respondents, 64% said they were not being paid on time, while 36% said they were being paid on time.

While contractors remain optimistic about the volume of work planned in Saudi Arabia, the slowdown in spending is forcing a shift in contractors’ bidding strategies.

“Saudi Arabia is booming,” says an international contractor working in the kingdom. “A lot of oil and gas projects are moving forward, but for the civil construction, we have noticed a slowdown and some challenges with cashflow. We expect this trend to continue, and to avoid these problems, we will focus our efforts on the revenue-generating projects.”

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Colin Foreman

Exclusive from Meed

Tender issued for Libyan gas project
17 September 2026
Nakheel awards $218m Dubai Islands buildings deal
17 September 2026
Aldar and Mubadala acquire Masdar City Square
17 September 2026
Dubai announces new 80km highway corridor
16 September 2026
Contractors submit Expo 2030 convention centre interest
16 September 2026

Tender issued for Libyan gas project
17 September 2026
An invitation to bid has been issued for a contract to conduct environmental assessments for the project to expand the Mellitah oil and gas complex in Libya.

The bid submission deadline is 2pm today (17 September) Libyan time.

The scope of the project includes provision of:
- An environmental baseline study (EBS)
- An environmental impact assessment (EIA)
- An environmental management plan (EMP)
The client is Mellitah Oil & Gas (MOG), which is a joint venture of Italy’s Eni and Libya’s National Oil Corporation (NOC).

MOG is based in Tripoli and operates both onshore and offshore oil and gas facilities.

The joint venture owns and operates six major oil and gas fields across the North African country.

According to the tender documents, the company that is awarded the contract will need to prepare environmental management measures in compliance with:
- Libyan environmental legislation
- Ministry of Environment requirements
- NOC environmental guidelines
- Applicable international environmental standards and best practices
The expansion of the Mellitah oil and gas complex is part of a project estimated to be worth $8bn.

The wider project is known as the Mellitah Complex Expansion & CO2 Management Integrated Development Project.

It has six main packages:
- Onshore package
- Offshore Structure A
- Offshore Structure E
- Subsea pipeline package
- Site preparation work
- Carbon capture and storage facility
Security issues and political instability have been a major problem for Libya’s oil and gas sector since the country’s civil war started in 2011.

Earlier this month, the Mellitah oil and gas complex was forced to shut down temporarily due to a protest over deteriorating public services.

The existing onshore complex includes housing, processing units, storage facilities and export facilities.

It also serves as the launch point for the Greenstream pipeline, which delivers Libyan gas directly to Italy.

The planned expansion of the complex will involve:
- Construction of a new fourth gas processing train
- Construction of a third condensate train
- Construction of a third natural gas liquids fractionation train
- Construction of a fourth sulphur recovery unit train
- Installation of a hydrogen sulphide enrichment unit
- Installation of a sulphur recovery unit
- Construction of other associated facilities
The Mellitah complex is located about 100 kilometres west of Tripoli and is a key energy facility in the west of the country.
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Wil Crisp

Nakheel awards $218m Dubai Islands buildings deal

17 September 2026

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Dubai-based developer Nakheel, now part of Dubai Holding, has awarded a main construction contract worth more than AED800m ($218m) for phases one and three of Bay Grove Residences at Dubai Islands.

The contract was awarded to the local firm Metac General Contracting Company.

It covers the construction of 537 apartments, comprising one- to four-bedroom units, across seven residential buildings.

Phase one includes 296 units in four buildings, while phase three comprises 241 units across three buildings.

The works are scheduled for completion in late 2028.

Bay Grove Residences will ultimately comprise 1,154 homes across 15 buildings. Planning is under way for the remaining 617 homes in phases two and four, with further contract awards expected.

In August last year, Nakheel awarded a AED2.6bn ($708m) contract to Abu Dhabi-based Fibrex Contracting to build the Bay Villas project at Dubai Islands. The contract includes constructing 636 villas.

In April this year, another AED527m ($143m) contract was awarded to local firm Al-Nasr Contracting Company to construct the primary infrastructure and utilities works on Island B at the development.

The Dubai Islands development consists of five islands spanning 18.6 square kilometres. It features more than 59 kilometres (km) of waterfront and 20km of beaches, as well as parks, golf courses, promenades and cycling paths.

The offshore island project gained renewed momentum in 2022, when Nakheel unveiled a new masterplan and rebranded it as Dubai Islands.

The reclaimed islands were originally part of the Palm Deira project, which was partially completed before being put on hold in 2008.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

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

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Yasir Iqbal

Aldar and Mubadala acquire Masdar City Square
17 September 2026

Abu Dhabi-based sovereign wealth fund Mubadala Investment Company and local developer Aldar have completed the acquisition of Masdar City Square at Masdar City, in a transaction valued at AED918m ($250m).

The deal was executed through their joint venture established in 2024.

Masdar City Square comprises more than 47,000 square metres (sq m) of net leasable area across seven office buildings.

Completed in Q1 2026, the development is 99% occupied. Tenants include Taqa, the Department of Energy, Emirates College and the Mohamed Bin Zayed University of Artificial Intelligence.

The transaction expands the joint venture’s real estate portfolio in Masdar City, which is now valued at AED4.7bn ($1.3bn).

Masdar City is one of the region’s leading hubs for clean energy, artificial intelligence, advanced research and sustainable urban development.

The joint venture acquired The Link project at Masdar City for AED654m ($178m) in April.

Comprising about 32,000 sq m of net leasable area across five buildings, The Link is fully leased to a portfolio of major tenants, including Abu Dhabi Future Energy Company (Masdar) and the Mohamed Bin Zayed University of Artificial Intelligence.

The asset includes Grade A, Leed Platinum office space, a net-zero-energy headquarters building, a multi-use hall and residential accommodation, supporting its position as a high-performing, integrated component of Masdar City.

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Yasir Iqbal
Dubai announces new 80km highway corridor
16 September 2026

Dubai has approved the construction of the new fourth corridor, a major highway programme aimed at boosting inter-emirate connectivity, increasing road capacity and easing congestion.

The corridor will extend 80 kilometres, from Al-Faya Road in Abu Dhabi to Al-Shanouf Road in Sharjah.

It will include 12 lanes, 72 bridges and 17 tunnels.

The project is expected to reduce travel times by up to 60% and serve more than 3.1 million people, while providing links to Al-Maktoum International airport and Etihad Rail.

It will have the capacity to accommodate 24,000 vehicles per hour in each direction.

The project will be delivered in two phases. The first phase, running from Al-Shanouf Road to Dubai-Al Ain Road, will be delivered at a cost of AED3.5bn ($953m).

The second phase will stretch from Dubai-Al Ain Road to Al-Faya Road in Abu Dhabi.

Hamdan bin Mohammed: In line with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum to boost investment in infrastructure, I approved the New Fourth Corridor to strengthen Dubai’s road network and enhance connectivity with the UAE’s federal road network.… pic.twitter.com/zlIyY2yKBN

— Dubai Media Office (@DXBMediaOffice) September 16, 2026

The scheme adds a fourth spine to a network that has long relied on three main corridors: the E11 (Sheikh Zayed Road/Al-Ittihad Road); the E311 (Sheikh Mohamed Bin Zayed Road) and the E611 (Emirates Road), which together carry more than 850,000 vehicles commuting between Dubai and the northern emirates daily.

That concentration has made the route one of the country’s most congested, with peak-hour bottlenecks a persistent problem for residents. The new corridor is designed to divert a significant share of that traffic onto a higher-capacity route, rather than add pressure to the existing network.

The project also aligns with the Dubai 2040 Urban Master Plan, which anticipates population growth to 5.8 million by 2040 and calls for the expansion of roads, railways, airports and ports to support that growth and reinforce Dubai’s position as a global trading hub. This is reflected in the corridor’s direct links to Al-Maktoum International airport and Etihad Rail.

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Yasir Iqbal

Contractors submit Expo 2030 convention centre interest

16 September 2026

Register for MEED’s 14-day trial access

Expo 2030 Riyadh Company (ERC), responsible for delivering the Expo 2030 Riyadh venue, received contractor interest on 14 September for a contract to design and build a convention centre in the site's Collaboration District.

Construction is slated to begin in January 2027 and take 29 months. The development will cover a total gross external area of more than 28,000 square metres (sq m). The total programme area will be about 22,000 sq m and the gross floor area will be 17,000 sq m. The maximum height of the building will be 41.5 metres.

The venue will be laid out across two levels, with a mezzanine, roof terraces and a 4,030 sq m basement, in addition to mechanical, electrical and plumbing and back-of-house spaces.

Two flexible exhibition halls are planned, covering a combined 7,280 sq m, as well as 3,800 sq m of pre-function space, 650 sq m dedicated to meeting rooms and 2,200 sq m of outdoor exhibition space in the north and south plazas.

The appointed main contractor will assume responsibility for packages including the early works substructure and the lead design consultant's deliverables, while carrying out the full scope of superstructure, above-ground waterproofing, external facades, masonry, base build and specialised fit-outs for VVIP, VIP and visitor areas.

Further scope includes delivering comprehensive MEP services; vertical transportation; final infrastructure tie-points; public-realm hard and soft landscaping; testing, commissioning, handover documentation; and management of the defects liability period.

The expression of interest notice was floated on 13 September.

The unusually brief expression of interest deadline of just one day underscores a compressed procurement timeline.

This accelerated tender and evaluation schedule signals that project organisers are operating under time pressure to secure contractors and maintain the tight schedule required ahead of the event's opening.

ERC expects to award the formal contract by the end of this year and begin construction in January next year.

The project is due for completion in early 2030, in time for the main event in October of that year.

Site progress

Construction activity at the Expo site is accelerating, with Riyadh moving to award its first major vertical contracts and advancing infrastructure works across the programme.

Earlier this month, MEED exclusively reported that ERC has tendered a contract to deliver the Souq areas within the expo site.

These areas are divided into five precincts, with a total development area of about 300,000 sq m.

In September, Saudi Arabia’s Royal Commission for Riyadh City awarded a design-and-build contract for the construction of a new metro station catering to the Expo 2030 site.

In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Alyamama Company.

The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle (EV) charging.

These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners.

That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems and EV charging stations.

The masterplan covers 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.