meed-logo

line1 line2 line3
SIGN IN / REGISTER

Infrastructure projects support Riyadh’s logistics ambitions

12 September 2023

This package on Saudi Arabia’s transport sector also includes: 

> Contractors bid to build Ceer car plant
> Spark logistics zone to start operations in 2024
> Neom awards mountain tunnel package for The Line
> Neom tenders The Line railway track works
> Neom invites revised bids for Oxagon project
> Gaca awards Riyadh airport cargo package

 

Saudi Arabia reiterated its ambition to become a global logistics hub in late August when Prince Mohammed bin Salman bin Abdulaziz al-Saud, Crown Prince, Prime Minister and Chairman of the Supreme Committee for Transport and Logistics, launched the Master Plan for Logistics Centres.

The logistics centres plan, which involves developing 59 hubs across the kingdom, is part of a package of ongoing initiatives to overhaul the transport and logistics sectors first outlined by Prince Mohammed when he launched the National Transport and Logistics Strategy (NTLS) in mid-2021.

The strategy’s ultimate goal is to raise the transport sector’s GDP contribution to 10 per cent from 6 per cent in 2021.

Airport ambitions 

Developing infrastructure will be crucial for the success of the strategy. According to regional projects tracker MEED Projects, there are $195bn-worth of active transport projects in Saudi Arabia.

The most significant subsector is airports, for which $85bn of projects are planned or under way. This is about 43 per cent of the transport total. 

The largest upcoming airport project is the development of King Salman International airport (KSIA), which will ultimately expand and replace the existing King Khaled International airport (KKIA). 

Launched in November 2022, the Foster + Partners-designed masterplan for KSIA involves building the largest airport in the world for passenger capacity. It aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. For cargo, the goal is to process 3.5 million tonnes a year by 2050.

While design work proceeds on KSIA, the KKIA continues to be upgraded. In June, a joint venture of Turkey’s IC Ictas and the local Al-Rashid Trading & Contracting was awarded the contract to complete the renovation of Terminal 1 and Terminal 2.

The joint venture recently completed the renovation of Terminal 3 and Terminal 4 at the airport.

In August, local contractor First Fix secured a contract to construct a taxiway and apron for cargo, as well as civil and infrastructure works.

There are two other major airport projects planned in the kingdom. A design competition is expected to start later this year for a new Terminal 2 at Jeddah’s King Abdulaziz International airport (KAIA). It will be part of an estimated SR115bn ($31bn) expansion plan to make KAIA one of the world’s largest airports by increasing its capacity to 114 million passengers a year.

Jeddah plans $31bn airport expansion

The other major airport is planned for Neom. US firm Aecom confirmed in March that it had been awarded a contract to provide project management consultancy (PMC) services for the new airport project, which will be built close to Tabuk.

Although not confirmed, it is understood that the first phase of the airport will have the capacity to handle 25 million passengers a year. A second phase could take the capacity up to 50 million. There is an aspiration for the airport to become the largest in the world, with a capacity of 100 million passengers annually. 

Smaller domestic airports are also being developed. In March this year, France’s Egis Group was appointed to provide technical support and project management services for 26 smaller regional airports across Saudi Arabia.

These airport projects will support Saudi Arabia’s new airlines. Riyadh Air, which will fly out of the Saudi capital, was launched earlier this year, and there are also plans to launch Neom Airlines. 

Port projects

There are $16bn of port projects planned or under way in the kingdom.

The largest is the expansion of Duba Port at Neom’s industrial city development, Oxagon. That project, which is already under construction, involves turning a small regional port into a major international port that will initially support construction activity at Neom.

Other port schemes in Saudi Arabia that are planned or under way include the expansion and upgrade of Jeddah Islamic Port, Ras al-Khair Port, King Abdulaziz Port and King Fahd Port.

Mawani implements $950m of Saudi port projects

Rail renaissance 

The ports will connect to Saudi Arabia’s growing rail network. Rail accounts for about 20 per cent of the transport projects total, with almost $40bn of active projects. 

The port at Oxagon will be connected to Neom’s rail network, which will link developments including The Line and the airport. 

Nationally, the largest upcoming rail scheme is the long-awaited Saudi Landbridge project, which involves building railways to connect ports and industrial areas on the Red Sea coast in the west with Riyadh in the centre of the kingdom and the Gulf coast in the east.

Other rail projects planned include high-speed connections between Riyadh and other GCC capitals, including Doha and Kuwait City, urban rail projects in Riyadh and the Saudi sections of the GCC railway network.  

Completing the transport infrastructure roll-out is expanding the Saudi road network. There are $54bn of road projects under development in the kingdom, which accounts for about 28 per cent of the transport total. These highways will provide vital links between the new and expanded airport and ports and the other projects under development in the kingdom.

More related reads:

> National champion Saudi Logistics Services is helping the kingdom meet its ambitious targets
> Neom seeks firms for Oxagon light rail
> Neom concludes air taxi tests
> Gigaproject seeks firms for Riyadh rail link
> Riyadh Air signs Boeing engines deal

https://image.digitalinsightresearch.in/uploads/NewsArticle/11139569/main.gif
Colin Foreman

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

Click here to register
Exclusive from Meed
Related Articles
  • Abu Dhabi extends battery storage bid deadline

    14 March 2025

    Prequalified bidders were given a three-week extension to submit their proposals for a contract to develop and operate a battery energy storage system (bess) plant project in Abu Dhabi.

    The project client, Abu Dhabi-based utility offtaker Emirates Water & Electricity Company (Ewec), expects to receive bids by 24 March, three weeks from the previous tender closing date, according to a source familiar with the project.

    Called Bess 1, the 400MW project will closely follow the model of Abu Dhabi’s independent power project (IPP) programme, in which developers enter into a long-term energy storage agreement (ESA) with Ewec as the sole procurer.

    The first plant will be in Al-Bihouth, about 45 kilometres (km) southwest of Abu Dhabi, and the second plant will be in Madinat Zayed, about 160km southwest of the city.

    Ewec issued the request for proposals to prequalified companies in July last year and initially set 30 November 2024 as the last day to submit proposals. 

    MEED previously reported that up to four consortiums comprising infrastructure investors, developers and contractors have been formed and are preparing to submit their proposals for the contract.

    Ewec prequalified 11 managing partners that can bid either individually or as part of a consortium with other prequalified bidders. These are:

    • Acwa Power (Saudi Arabia)
    • China Electrical Equipment International (China)
    • EDF (France)
    • International Power (Engie)
    • Jera (Japan)
    • Jinko Power (China)
    • Korea Electric Power Corporation (Kepco, South Korea)
    • Marubeni (Japan)
    • Sembcorp Utilities (Singapore)
    • SPIC Huanghe Hydropower Development Company (China) 
    • Sumitomo Corporation (Japan)

    Ewec prequalified 18 other companies that can bid as part of a consortium. These are:

    • Abrdn Investcorp Infrastructure Investments Manager (UK)
    • AGP Capital (US)
    • Al-Masaood (UAE)
    • Al-Fanar Company (Saudi Arabia)
    • Alghanim International (Kuwait)
    • Aljomaih Energy & Water Company (Jenwa, Saudi Arabia)
    • Amplex-Emirates (local)
    • ATGC Transport & General Trading (local)
    • Amea Power (local)
    • China Electric Power Equipment & Technology (China)
    • China Machinery Engineering Corporation (China)
    • GE Capital EFS Financing (US)
    • Itochu (Japan)
    • Korea Western Power Company (Kowepo, South Korea)
    • Pacific Green (US)
    • Samsung C&T (South Korea)
    • Swift Energy (Malaysia)
    • X-Noor Energy Equipment Trading  (UAE)

    The planned facility is expected to provide up to 800 megawatt-hours (MWh) of storage capacity.

    The ESA will be for 15 years, commencing on the project’s commercial operation date, which falls in the third quarter of 2026. 

    According to Ewec, the bess project will provide additional flexibility to the system and ancillary services such as frequency response and voltage regulation.

    Global bess market

    The overall capacity of deployed bess globally is expected to reach 127GW by 2027, up from an estimated cumulative deployment of 36.7GW at the end of 2023, according to a recent GlobalData report.

    The report named Chinese companies BYD and CATL and South Korean companies LG Energy Solutions and Samsung SDI among the top battery technology providers globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13484751/main.gif
    Jennifer Aguinaldo
  • Indian and Spanish team wins Ras Mohaisen EPC package

    13 March 2025

    A team of India's Larsen & Toubro (L&T) and Madrid-headquartered Lantania has won the engineering, procurement and construction (EPC) contract for the Ras Mohaisen independent water project (IWP) in Saudi Arabia.

    State utility offtaker Saudi Water Partnership Company (SWPC) signed the water-purchase agreement contract for the project with a consortium comprising Riyadh-headquartered utility developer Acwa Power, Hajj Abdullah Ali Reza & Partners and Al-Kifah Holding Company in February. 

    According to L&T,  its Water and Effluent Treatment business division will execute the EPC contract for the desalination facility.

    The state water offtaker received two bids for the contract in April last year. The other bidder was Spain’s Acciona.

    The Ras Mohaisen IWP will be able to treat 300,000 cubic metres of seawater a day (cm/d) using reverse osmosis technology.

    It will also include storage tanks with a capacity of 600,000 cubic metres, equivalent to two operating days, intake and outfall facilities, process units and pumping stations.

    The build, own and operate project will also include electrical, automation and instrumentation systems and a solar photovoltaic plant. 

    The project is expected to reach commercial operation by the second quarter of 2028.

    The plant will be located in Al-Qunfudhah Governorate, about 300 kilometres south of Mecca, on the Red Sea coast in Saudi Arabia’s Western Region.

    The project is expected to enhance water supply chains and is intended to serve the Mecca and Al-Baha regions.

    Netherlands-headquartered KPMG acted as SWPC’s financial adviser, with UK-based Eversheds Sutherland acting as the legal adviser for the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13485233/main.gif
    Jennifer Aguinaldo
  • Egypt faces complex economic reality

    13 March 2025

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13483136/main.gif
    MEED Editorial
  • LIVE WEBINAR: GCC Projects Market 2025

    13 March 2025

    Register now

    Topic: GCC Projects Market 2025

    Date & time: 11:00 AM GST, 20 March 2025

    Agenda:

    • Introduction and overview of the GCC projects market
    • Data-driven historical and current performance
    • Top clients and contractors
    • Assessment of main market drivers
    • Summary of the Saudi gigaprojects programme
    • Market overview by country and sector
    • Market pipeline and outlook for 2025 and beyond
    • Key trends, opportunities and challenges
    • Selected major projects to watch
    • Q&A session

    Hosted by: Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemicals market. He is considered one of the world’s foremost experts on the Mena projects market. He is a regular guest commentator on Middle East issues for news channels such as the BBC, CNN and ABC News and is a regular speaker at events in the region. 

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13483162/main.gif
    MEED Editorial
  • Dubai property market rebounds in February

    13 March 2025

    Property prices in Dubai rebounded in February following a decline in January. Average property prices hit a record high of AED1,505 ($410) per square foot, reflecting a month-on-month increase of 1.41% or a rise of AED20.94 compared to January 2025, according to a statement from property agent Better Homes.

    The report also said there was a 17% increase in sales volume, reaching AED41bn across 14,929 transactions, marking a 15% month-on-month rise. This resurgence underscores Dubai's resilience and enduring appeal as a global property investment hub.

    The rebound comes just a month after a slight decline in property prices, which had marked the first decrease in over two years.

    In January, average prices fell by 0.57% to AED1,484 per square foot, raising concerns about market stabilisation. The February figures indicate that the market has quickly regained its momentum, driven primarily by a surge in off-plan properties, which accounted for 59% of all sales.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13483150/main.jpg
    Colin Foreman