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Saudi gigaproject awards drop in March

3 April 2024

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Saudi Arabia’s five official gigaproject developers added just $271m in March to the $57bn total value of contracts they have awarded since their launch, according to MEED’s Saudi Gigaprojects Tracker. The tracker is compiled using data from regional projects tracker MEED Projects.

There were only three awards during March. The largest, valued at $187m, was a public-private partnership (PPP) deal for a district cooling plant. The other two contracts, valued at $44m and $40m, cover road and infrastructure work at Amaala.

The March total is about half of the total recorded for February, when there were $509m of awards. The totals for both March and February are significantly less than the $5.6bn of awards recorded in January.

Project reviews

The decline in awards coincides with reports of projects in Saudi Arabia being reprioritised and budgets under review. The performance of the five gigaprojects in the coming months will be a crucial indicator, revealing whether this drop is part of a longer-lasting trend or merely reflects the cyclical nature of the construction industry, which is often driven by major contract awards rather than a steady stream of smaller deals.

It is also important to note that the March total is not the lowest in recent months. In November 2023, the five gigaproject developers awarded $96m of contracts.

Regarding the gigaprojects’ impact on the Saudi projects market, their significance remains the same in March. The $57bn total for the five official gigaprojects’ awards represents a substantial 19% of the $301bn of contract awards made across all clients and sectors in Saudi Arabia since the initial gigaproject contracts were awarded in May 2017. 

What is a gigaproject?
In January 2023, Saudi Arabia’s Crown Prince Mohammed Bin Salman Bin Abdulaziz Al Saud confirmed five official gigaprojects in the kingdom: the Diriyah, Neom, Qiddiya, Red Sea and Roshn projects.
 

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Colin Foreman

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