meed-logo

line1 line2 line3
SIGN IN / REGISTER

Heady times for biggest construction markets

22 December 2023

 

It was a whirlwind couple of months at the end of 2023 with major global announcements that will positively impact the region’s largest construction market for years to come.

On 31 October, Saudi Arabia was effectively confirmed as the 2034 Fifa World Cup host after the only other potential bidder for the tournament withdrew from the race. 

Then, on 28 November, Saudi Arabia was selected as the host country for the World Expo 2030 after securing 72 per cent of the votes cast by Bureau International des Expositions member states. 

Recent experience from elsewhere in the GCC has shown that hosting these events comes with a plethora of construction projects.

Qatar invested billions of dollars in infrastructure ahead of the Fifa World Cup 2022; similarly, Dubai spent heavily on infrastructure for Expo 2020.

Crucially, these events, global pandemics withstanding, are immovable deadlines that must be met, which means construction projects have to be delivered on time. 

Significant undertakings

While the investment required for the 2034 World Cup remains to be determined, the Saudi bid must include a minimum of 14 all-seater stadiums, of which at least four should be existing structures. The capacity needed is at least 80,000 seats for the opening and final matches, and at least 60,000 seats for the semi-finals. For all other matches, a minimum of 40,000 seats are necessary. 

Meanwhile, the Royal Commission for Riyadh City, which led the Expo 2030 bid, has said the Expo site masterplan, which is located north of Riyadh close to King Khalid International airport, will cost $7.8bn to develop. 

While both programmes of work are significant undertakings, they are not expected to be as transformative for the Saudi economy as they were for Qatar and Dubai, which were both smaller and dwindling construction markets when they secured the rights to host their events. 

The same cannot be said for Saudi Arabia, where the construction market is already overheated as construction activity ramps up on a series of self-styled gigaprojects, including Neom, Diriyah Gate and Qiddiya, that aim to transform the economy as part of Vision 2030. 

In a report on the Saudi economy released on 2 November, London-based Capital Economics said: “We don’t expect this to be the fillip to the Saudi economy as it was for Qatar, which hosted the World Cup in 2022.

“First, Saudi Arabia already has much of the infrastructure in place, including stadiums, meaning there is unlikely to be a World Cup-related construction boom like Qatar saw.

“Second, even with 104 games scheduled compared to 64 in Qatar, tournament-related tourism spending we estimate could be equal to just 2 per cent of non-hydrocarbon GDP (compared to 6 per cent in Qatar).”

Capital Economics made similar comments on the impact of the 2030 Expo.

In a report issued on 30 November, it said: “[While] hosting the event may support the kingdom’s longer-term goals of boosting tourism, it is highly unlikely that the Expo itself will provide a boost to the economy of the same magnitude as it did in Dubai.

“The Saudi economy is 10 times larger than that of Dubai, so even a similar sized nominal impact will be a much smaller boost as a share of GDP.”

In terms of construction and transport awards, 2023 has been the best year in recent times and could potentially be the best year on record.

By 1 December, there had been $36.3bn of construction and transport awards in Saudi Arabia, which already exceeds the 2022 total of $35.7bn. The record was achieved in 2013 when there were $41.7bn of contract awards, with a significant portion coming from the $23bn of contracts signed that year for the six lines of the Riyadh metro system.

UAE in 2023

It was also a good 2023 for the UAE, which recorded its best contract awards total in over a decade. There were $34.3bn of contract awards by 1 December 2023, higher than the 2014 high of $34.1bn, but still significantly short of 2008, when there were $40.2bn of construction and transport contract awards.

The UAE’s strongly performing property market has driven the country’s construction sector.

Next year, spending on projects by the government and its related entities will play a larger role as tendering starts for projects such as the $4.9bn extension to Dubai Metro’s Blue Line.

Runners up

For the other four GCC markets, the performance in 2023 and outlook for 2024 is more subdued. The hope is that as activity continues in the region’s two largest markets, the others will follow with ambitious projects. There are tentative signs that this is starting to happen as major projects restart or move into tendering. 

The region’s other major construction market is Egypt. This year, its performance has stuttered as the total value of contract awards fell to $9.1bn from $29bn. As the economy continues to struggle with ongoing currency issues, the outlook for 2024 is subdued.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11342964/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Kuwait receives bids for Al-Khairan phase one IWPP

    2 June 2026

     

    Two developer consortiums have submitted bids for the first phase of Kuwait’s Al-Khairan independent water and power producer (IWPP) project, according to a source.

    Bids were received by the Kuwait Authority for Partnership Projects (Kapp) on 1 June.

    The facility will have a capacity of 1,800MW and 150,000 cubic metres a day of desalinated water. It will be located in Al-Khairan, adjacent to the Al-Zour South thermal plant. 

    The bidders include:

    • Abu Dhabi National Energy Company (Taqa) / A H Al-Sagar & Brothers (Saudi Arabia) 
    • Acwa (Saudi Arabia) / Gulf Investment Corporation (Kuwait)

    The Al-Khairan IWPP is being procured by Kapp in partnership with the Ministry of Electricity, Water & Renewable Energy (MEWRE).

    The main contract was tendered last September. Three consortiums and two individual companies were previously prequalified to participate in the tender.

    Ernst & Young, BNP Paribas, AtkinsRealis and Addleshaw Goddard are financial advisers on the project. Chadbourne & Parke is acting as legal adviser.

    The winning bidder will sign a set of public-private partnership agreements covering financing, design, construction, operation and transfer of the project. The energy conversion and water-purchase agreement is expected to cover a 25-year supply period.

    Future phases

    The Al-Khairan IWPP project is expected to run on low-sulphur fuel oil as the primary fuel and to accommodate crude oil, gas oil and natural gas as backup fuels. Future phases will further expand capacity.

    It is understood that the estimated $750m second phase of the Al-Khairan IWPP project will add a further 1,800MW of generation capacity through a combined-cycle gas-fired power plant.

    The project, first mooted over a decade ago, remains in the early development stages, with no plans currently to advance to procurement in 2026, a source said.

    According to the source, the immediate focus is on advancing plans for the 3,600MW Nuwaiseeb power and water desalination IWPP project.

    The Nuwaiseeb IWPP plant will have a desalination capacity of 75 million imperial gallons a day.

    Kapp plans to release a transaction advisory tender for the project by the end of the year.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17072685/main.jpg
    Mark Dowdall
  • Doosan confirms Saudi Jafurah 2 cogen contract

    2 June 2026

    South Korea’s Doosan Enerbility has confirmed it has signed an engineering, procurement and construction (EPC) contract worth about $556m for the second phase of the Jafurah combined heat and power (CHP) plant in Saudi Arabia.

    The project is being developed by Korea Electric Power Corporation (Kepco) in partnership with Saudi Aramco.

    Doosan said the contract covers design, equipment supply, installation, construction and commissioning of the facility.

    The Jafurah CHP phase 2 project will be built near the Jafurah gas field, about 400 kilometres east of Riyadh. Once operational, it will generate 330MW of electricity and produce 465 tonnes of steam an hour for the nearby gas field.

    According to the firm, the project’s main steam turbine will be supplied by Doosan Skoda Power, a subsidiary of Doosan Enerbility.

    WSP is acting as the project management consultant for the project, which is scheduled for completion in 2029.

    The Jafurah gas development is part of Aramco’s $3.2bn unconventional resources programme, which aims to develop shale gas in three areas. Jafurah lies southeast of Ghawar, the world’s largest conventional oil field.

    The programme is part of Riyadh’s plans under Vision 20230 to ensure the kingdom remains self-sufficient in gas supply amid rising demand from the residential and industrial power sectors.

    Jafurah phase one

    In February 2025, MEED exclusively reported that talks were under way to expand the capacity of the $500m Jafurah cogeneration independent steam and power plant (ISPP).

    Construction works were completed on the facility last November.

    At the time of its procurement, the plant’s first phase was to have a power capacity of 270-320MW, and a low-pressure (LP) steam demand of 77-166 thousand pounds an hour (klb/hr) and high-pressure (HP) steam demand of 29-126 klb/hour by 2023.

    The LP and HP steam demand will increase to 283-373 klb/hr and 66-321 klb/hr by 2027, respectively.

    The oil giant issued the letter of award to Kepco for the contract to develop the Jafurah ISPP scheme in July 2022.

    Kepco subsequently awarded South Korea’s Doosan Heavy Industries & Construction the project’s EPC contract.

    US/India-based Synergy Consulting provided financial advisory services to Kepco on its bid.

    Sumitomo Mitsui Banking Corporation (SMBC) served as the client’s financial adviser for the project. Germany’s Fichtner Consulting Engineers is technical consultant, while the UK’s Wood Group is project management consultant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17072199/main.jpg
    Mark Dowdall
  • Al-Mabanee submits lowest bids for Kuwait infrastructure

    2 June 2026

    Kuwait’s Public Authority for Housing Welfare (PAHW) has opened commercial bids for two major infrastructure and public buildings packages at South Al-Mutlaa Residential City.

    Local firm Al-Mabanee United Company has emerged as the lowest bidder for both contracts, submitting combined offers worth KD44m. Both packages entail the construction, completion and maintenance of services, infrastructure works and public buildings for different district centres within the city.

    The first contract covers the infrastructure and public buildings for the N3 District Centre. PAHW received proposals from eight bidders, with Al-Mabanee United Company submitting the lowest price at KD20.9m. The second-lowest offer was submitted by The Contractor General Trading & Contracting Company at KD22.4m, followed by Golden Engineering Group for General Trading & Contracting at KD22.7m, though Golden Engineering Group was flagged for not providing a bid bond.

    Al-Khonaini General Trading & Contracting Company, operating as Inshat Al-Khonaini, ranked fourth with a bid of KD22.7m, followed closely by Kuwait Industrial Centre Company at KD22.8m. Combined Group Contracting Company submitted a bid of KD23.8m, Al-Dar Engineering & Construction Company bid KD25.7m, and China’s Sichuan Road & Bridge Group Corporation submitted the highest active proposal at KD29m. 

    The second contract is for identical infrastructure and public building works at the N1 District Centre. Al-Mabanee United Company submitted the lowest bid of KD22.8m. Its closest competitor was The Contractor General Trading & Contracting Company, which submitted an offer of KD23.9m.

    Al-Khonaini General Trading & Contracting Company came in third with a bid of KD24.2m, followed by Kuwait Industrial Centre Company at KD24.4m and Golden Engineering Group for General Trading & Contracting at KD24.4m. Combined Group Contracting Company placed a bid of KD26m, Al-Dar Engineering & Construction Company bid KD26.5m, and United Construction Company, known as Al-Inshat Al-Muttahida, submitted an offer of KD 30.9m. Al-Ghanim International General Trading & Contracting filed the highest bid at KD344m and was also noted for lacking a bid bond.

    South Mutlaa Residential City is a large-scale planned development designed to accommodate around 400,000 residents in a modern, fully serviced urban environment. Once completed, it will offer contemporary housing alongside extensive logistical services and a wide range of public and commercial areas, including hospitals, schools and other social services.

    The project also includes major infrastructure works such as approximately 150 kilometres of roads and related structures, lighting and other public works, as well as integrated systems for water distribution, rainwater collection and sewage. In addition, it will provide the civil infrastructure needed for electricity distribution, telecommunications networks and traffic control to support a well-connected, functional city.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17071938/main.gif
    Colin Foreman
  • Local developer secures finance for three Riyadh projects

    2 June 2026

    Qimam Noshoz for Real Estate Development Company, a subsidiary of Saudi Arabia’s Banan Real Estate Company, has signed a sharia-compliant credit facility agreement worth SR84m ($22.4m) with Riyad Bank to fund three commercial, hospitality and sports developments in the kingdom.

    The financing agreement is split into two distinct tranches to align with the projects’ development timelines. The first tranche consists of SR49m with a maturity duration of seven years, while the remaining SR35m has been secured for an eight-year term.

    Qimam Noshoz will utilise the capital to fund construction works for the Al-Rahmaniyah Gem and Al-Wadi District Gem projects. Both of these projects are already leased to the fitness operator Armah Sports Company. The other project is an independent hotel located within the Al-Wadi District.

    The Al-Wadi development is designed as an integrated commercial complex spanning approximately 7,818.5 square metres of land, with a built-up area of about 975 square metres. It includes a men’s gym, a women’s gym and a hotel building.

    The Al-Rahmaniyah project is an integrated commercial development combining fitness facilities with retail. The asset features men’s and women’s gyms operating alongside an independent commercial zone.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17071628/main.jpg
    Colin Foreman
  • SLB wins $385m contract for Kuwait oil research centre

    2 June 2026

    Schlumberger Oilfield Eastern, a unit of the US-headquartered oilfield services company SLB, has been awarded a KD118m ($385m) contract to develop an oil and gas research centre in Kuwait.

    The contract was awarded by the state-owned upstream operator Kuwait Oil Company (KOC), according to a report by Kuwait’s Al-Rai newspaper.

    The Ahmadi Innovation Valley (AIV) project is planned as an advanced research and innovation hub equipped with specialised facilities and technical teams focused on applied research for Kuwait’s oil and gas sector.

    The contract was awarded after the Higher Purchase Committee (HPC) of Kuwait’s national oil and gas company Kuwait Petroleum Corporation (KPC) determined the bid to be compliant with the project’s technical and commercial requirements.

    In February 2025, KOC signed memorandums of understanding (MoUs) with five international oilfield service companies to support the development of the AIV initiative.

    These companies were:

    • SLB (US)
    • Baker Hughes (US)
    • Weatherford (US)
    • Halliburton (US)
    • National Energy Services Reunited (US)

    Under the preliminary agreements, each of the five companies agreed to establish a world-class research and development centre at the project site, focused on helping KOC meet challenges in the upstream sector.

    KOC’s CEO Ahmad Jaber Al-Eidan had said in February 2025 that the project will enable Kuwait to keep pace with global transformations while investing in advanced technologies to ensure the sector’s sustainability and achieve operational excellence.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17063475/main.gif
    Wil Crisp