Spanish firm wins work on Saudi military project
3 March 2023
The US Army Corps of Engineers’ Transatlantic Middle East District (Tam) has awarded a $290m consultancy contract to Madrid-headquartered Typsa for work on a $10bn-$15bn construction project in Saudi Arabia.
The single-award task order deal is for a three-year base period with one two-year option period. It covers work on the P563 programme for Saudi Arabia’s Defence Ministry (MoD).
Typsa’s scope of work includes the preparation and implementation of a programme management plan (PMP), communication, change management, quality management, cost and scheduling tracking, design requirements, codes, standards and submittal requirements, programme guidance, study integration, risk analysis and management, design reviews and programme work breakdown plan.
P563 programme
Located to the northwest of Riyadh, the P563 programme includes the development of facilities and infrastructure to support the overall MoD initiatives developed as part of the kingdom's Vision 2030 strategy.
It covers the construction of:
- A new military city with MoD headquarters consolidation, support and logistics facilities; a residential and commercial community; and other future commands
- A National Defence University with a library, conference centre and academic buildings
- A self-sustaining Joint Forces Command compound located approximately 50 kilometres from the military city
The Saudi MoD headquarters and the university are in the masterplanning stage. The budget for the design alone amounts to $990m and the construction is budgeted at $10bn-$12bn.
Exclusive from Meed
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Gigaproject spending finds a level
29 November 2024
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Joint venture wins Jeddah airport terminal deal
29 November 2024
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Saudi gigaprojects create long-term construction market
28 November 2024
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Adnoc launches energy and chemicals investment vehicle
28 November 2024
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Local firm bids $277m for Bahrain’s signature bridge
28 November 2024
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Related Articles
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Gigaproject spending finds a level
29 November 2024
By the end of October 2024, there had been $17bn of contract awards across Saudi Arabia’s five gigaprojects, according to regional projects tracker MEED Projects, up from the $16bn recorded during the same period in 2023.
The five official gigaprojects named by Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud are: Diriyah, Neom, Qiddiya, Roshn and the projects being developed by Red Sea Global.
While the growth in awards on these schemes in 2024 is positive, the pace of activity falls short of the strong growth that was expected as the gigaprojects move into the delivery phase.
The highlights for 2024 have been a $4.7bn contract to build dams at the Trojena mountain resort that was won by Italy’s WeBuild, a $2bn contract won by a joint venture (JV) of local firm Albawani and Qatar’s Urbacon Trading & Contracting for the construction of assets in the Wadi Safar development of the Diriyah project in Riyadh, and a $1bn contract secured by a JV of Spanish firm FCC Construction and local firm Nesma & Partners to build the Prince Mohammed Bin Salman Stadium at the Qiddiya City project on the outskirts of Riyadh.
These awards appear to confirm the consensus in Saudi Arabia that the focus for development is on projects underpinned by events. These are Trojena, which will host the Asian Winter Games in 2029; stadiums for the Asian Cup in 2027 and the Fifa World Cup in 2034; along with Expo 2030 Riyadh and the Asian Games in 2034.
There is also a view that projects in and around Riyadh are being prioritised ahead of schemes in remote areas.
The stabilisation of activity in 2024, rather than the expected growth, combined with the intermittent nature of contract awards, has led to concerns about the prospects for the future of the market.
The concerns peaked when no contract awards were recorded in August on any of the five official gigaprojects, but were abated when there were several high-profile awards in September and October, most notably the Qiddiya stadium deal.
The Line
The most scruntinised project in 2024 has been The Line at Neom.
Since January, there have been reports about how the delivery of The Line will be phased, as well as rephasing exercises for other projects as budgets came under strain. Neom effectively confirmed these reports in November, when it said it is focused on the initial phases of infrastructure and enabling works for the new city.
Neom commented on the next phase of the project when it replaced CEO Nadhmi Al-Nasr with Aiman Al-Mudaifer as acting CEO, saying: “As Neom enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project.”
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Joint venture wins Jeddah airport terminal deal
29 November 2024
Jeddah Airports Company (Jedco) has awarded a contract to a joint venture of the local Algihaz Contracting and Turkiye’s TAV for the rehabilitation of the South Terminal at King Abdulaziz International airport (KAIA) in Jeddah.
The project involves fully rehabilitating the old South Terminal to welcome pilgrims arriving in Jeddah for Umrah and Hajj pilgrimages.
Singapore’s Surbana Jurong is the consultant.
KAIA has three operational terminals. Opened in 2018, Terminal 1 is one of the world’s largest passenger terminals, and caters primarily for the state carrier Saudia and domestic flights. The North Terminal handles international airlines, while the Hajj Terminal is dedicated to pilgrim traffic. Operations from the South Terminal were transferred to Terminal 1 when it closed in 2020.
Jedco has plans to transform KAIA into one of the world’s largest airports with a SR115bn ($31bn) expansion plan that will increase its capacity to 114 million passengers a year.
The largest components of the plan cover the design and expansion of Terminal 1 and the construction of a new Terminal 2. In 2023, officials said the expected completion date for the expansion project is 2031.
Jedco is also building a new Hajj and Umrah terminal. Pilgrims comprise a large portion of passenger traffic, and the new arrivals and departures hall for budget airlines will be able to handle 15 million passengers a year. The project is expected to be completed by 2025.
The project investment programme is a result of Jedco’s forecast that annual demand will reach 114 million passengers by 2030.
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Saudi gigaprojects create long-term construction market
28 November 2024
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Speakers participating in a panel discussion on Saudi Arabia’s gigaprojects at MEED’s Mena Construction Summit 2024 in Dubai on 20 November discussed the progress of what is shaping up to be the world’s largest construction programme.
There are five official gigaprojects in the kingdom. They are Diriyah, Neom, Qiddiya, Red Sea Global’s projects and Roshn. All five are subsidiaries of the Public Investment Fund (PIF). In addition to these projects, there is a wide range of other very large schemes commonly referred to as gigaprojects, such as New Murabba and King Salman Park.
These projects, launched from 2017 onwards, have faced and continue to face considerable delivery challenges. Due to their vast scale, one of the main challenges has been attracting construction resources to the kingdom. The panellists said that while progress has been made in this regard, lots of work still needs to be done.
Several major European contractors have won work on the gigaprojects over the past five years. They include France’s Bouygues, Spain’s FCC and Italy’s Webuild.
Companies from the Far East include Hyundai Engineering & Construction, Samsung C+T, and a range of Chinese contractors including China State Construction Engineering Corporation, Powerchina and China Harbour Engineering Corporation.
Regional contractors have also played a role, with GCC-based contractors such as Dubai-based Alec and Qatar’s UCC securing major contracts. Egyptian companies have also played an important role with contractors such as Hassan Allam winning work.
Looking ahead, the panellists said that more contracting resources will need to be developed. This will involve roadshows to other markets around the world to promote awareness of the business opportunities available in Saudi Arabia to bring in new players and grow resources within the kingdom.
In 2023, the PIF invested in four contracting companies: Al-Bawani, Almabani, El-Seif Engineering Contracting and Nesma & Partners. In the future, more investment will be needed in the supply chain.
The business case for these investments is becoming stronger as the gigaprojects programme gathers momentum and demonstrates that it is creating a long-term market rather than discrete opportunities for construction companies in Saudi Arabia.
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Adnoc launches energy and chemicals investment vehicle
28 November 2024
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Abu Dhabi National Oil Company (Adnoc Group) has launched a new investment company named XRG that will focus on low-carbon energy sources and the chemicals value chain.
XRG has an enterprise value of over $80bn, Adnoc said in a statement on 27 November. The creation of the new investment vehicle was endorsed by Adnoc’s board of directors in a meeting chaired by Sheikh Mohamed Bin Zayed Al-Nahyan, UAE President and Ruler of Abu Dhabi.
XRG aims to more than double its asset value over the next decade by “capitalising on demand for low-carbon energy and chemicals”.
The independently operated investment company will initially focus on developing three value platforms, which are:
- Global chemicals – XRG aims to be a top five global chemicals player, producing and delivering chemical and specialty products, to help meet the projected 70% increase in global demand by 2050.
- International gas – XRG aims to build an integrated gas portfolio to help meet an anticipated 15% increase in global natural gas demand over the next decade, as a lower carbon transition fuel, as well as meet the expected 65% increase in demand for liquefied natural gas by 2050.
- Low-carbon energies – XRG seeks to invest in boosting the supply chain needed to meet increasing demands for low-carbon energies and decarbonisation technologies to drive the global energy transition. The market for low-carbon ammonia alone is expected to grow by between 70-90 million tonnes a year by 2040, from close to zero now.
XRG will formally begin operations in the first quarter of 2025, Adnoc said, adding that it will host a global strategy day next year.
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Local firm bids $277m for Bahrain’s signature bridge
28 November 2024
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Manama-based Haji Hassan Group has submitted the lowest bid for a contract to build package four of the Busaiteen Link road scheme.
The package involves the construction of a signature bridge connecting Muharraq to the existing North Manama Causeway and Bahrain Bay.
Bahrain’s Ministry of Works (MoW) received bids for the contract in June, and the Bahrain Tender Board opened prices on 25 November.
Haji Hassan offered to build the project’s package four for BD104.2m ($277.1m).
According to the Bahrain Tender Board, the other bidders and their offers are:
- Six Construct: BD221m
- Al-Rashid Trading & Contracting Company: BD181.2m
- Cebarco Bahrain: BD162.1
The three-year contract covers construction works on the Busaiteen Link from junction four to junction five, as well as the bridge and roads connecting the new Busaiteen Link to the existing North Manama Causeway.
The Saudi Fund for Development is financing the project.
According to GlobalData, the output of Bahrain’s construction industry is expected to grow by 3.4% in real terms this year, supported by developments in commercial, energy and utilities projects and an increase in foreign direct investment.
The infrastructure construction sector is expected to grow by 6% in 2024 and register an annual average growth of 4% in 2025-28, driven by the government’s efforts to upgrade the country’s transport infrastructure.
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