meed-logo

line1 line2 line3
SIGN IN / REGISTER

Legacy building at Diriyah

1 August 2024

It is impossible to talk about Saudi Arabia’s history without referencing Diriyah. Founded in 1446 in the Wadi Hanifa valley on the western outskirts of Riyadh, the historic town was the first capital of the Al-Saud dynasty and the launchpad for the kingdom’s unification campaign at the turn of the 20th century. In recognition, its central Turaif district was inscribed as a Unesco World Heritage site in 2010.

Today, the mud-brick settlement, built in the distinctive Najdi architectural style, has lent its name to one of the world’s most ambitious transformative developments. Sensitively conserving and building on its historical importance, it has created a unique cultural, educational, residential and tourism hub in the capital.

With an official budget of some $63bn, Diriyah is one of Saudi Arabia’s five official gigaprojects. It has held this label since early 2023, when responsibility for its development was handed to Diriyah Company, a project company formed as a Public Investment Fund (PIF) subsidiary a year earlier.

Covering an area of 14 square kilometres, Diriyah is targeting a population of 100,000 by its stated completion date of 2030. With more than 40 hotels, nine museums, 400 luxury boutiques, 100-plus restaurants and multiple educational institutions, it hopes to draw in more than 50 million annual visits.

Progress since ground was first broken four years ago has been rapid. As of May 2024, more than SR53bn ($14.1bn)-worth of construction contracts had been awarded. Today, visitors to the area can see hundreds of mobile cranes, plant and piling equipment rising over the boundary wall.

“We are in a good place,” says Mohammed Saad, Diriyah Company’s chief development officer. “We’ve finished our essential underground infrastructure and civil works, the super basement and all the tunnels that connect the basements together.”

But the real work has only just begun. Saad says a further SR30bn-35bn is scheduled to be awarded by the end of 2024, rising to SR40bn-45bn in 2025. By the end of this year, the public can expect to see substantial above-ground construction, particularly on the western side of the gigaproject, providing more tangible evidence of its advancement, which until now has been primarily below ground.

This is not to say that any vertical assets will be particularly tall. Because of the district's traditional low-rise nature, any building must be no higher than the historic structures. It should also emulate the Najdi style. For the same reason, most of the essential infrastructure, utilities and roads are hidden below ground.

Major project scopes

A significant step was made in early July when Diriyah Company awarded an estimated $2bn contract to a joint venture of El-Seif Engineering & Contracting and China State to build the North Cultural District. The deal, the largest let on the gigaproject to date, covers multiple assets, including hotels, the King Salman Foundation Library, King Salman University and the House of Saud Museum.

The work was originally planned as multiple construction packages until Diriyah Company took the commercial decision last year to bundle them into one contract. The decision to adopt super packages was driven by a dynamic market in which contractors have been almost overwhelmed with the volume of tenders from various gigaprojects and where cost inflation is taking hold.

“You will not get the attention of the big contractors if you offer small contracts,” Saad explains. By consolidating projects, contractors can focus their resources more effectively and efficiently and provide more competitive pricing.

“We have a hotel, we have an office building, we have a museum, and when we tendered them as one super package, there was a very solid response and interest from the big players because they could focus their resources and pricing and more efficiently engage their supply chains and subcontractors.”

The approach appears to be working. In late July, another estimated $2bn super package was awarded to a joint venture of local contractor Albawani and Qatar’s Urbacon to construct assets in the Wadi Safar district of the gigaproject. Featuring a mix of residential, residential farm plots, hotels, branded hotel villas, a golf course, an equestrian and polo club, and other leisure and entertainment facilities, including Aman, Chedi, Faena and Six Senses-branded hotels, Wadi Safar is positioned as the most upscale and exclusive development in Riyadh and indeed the kingdom as a whole.

The consolidated contract packages strategy reflects the supercharged nature of the Saudi projects market. With various clients, including the gigaprojects, all competing for a limited amount of contracting, material and labour resources, more innovative procurement strategies need to be adopted.

This is particularly critical for Diriyah and its enormous material requirements. For example, it has previously said that it will ultimately need some 350,000 doors, 1.5 million square metres of tiles, 1.2 million tonnes of rebar and 140,000 HVAC units.

Supply-side obstacles

Despite the progress, the project faces challenges related to contracting, engineering and material supply. The high demand for key materials, coupled with global supply chain disruptions, poses a significant conundrum. However, the delivery team has proactively secured and signed framework agreements with manufacturers to ensure a steady flow of required materials.

Transparent demand signalling is a core component of this. “We’ve analysed our material needs up to 2030 and prepared comprehensive requests for proposals for all key items,” says Saad. “We went out to the manufacturers and the supply chain in general to let them see the pipeline is tangible and secure. We are listening to vendors in order to speed things up and to lock down prices.”

Saad lists specific materials not naturally available in Saudi Arabia, such as finishing stones, as items that may be in short supply, in addition to some specialised MEP equipment that is only manufactured abroad. Overall, he is optimistic about the market’s ability to adapt. “The market will adjust itself,” he states. “Of course, there are challenges, but there are also opportunities for manufacturers to up their game.”

Likewise, contractors are being brought into discussions at earlier stages of contract planning. Diriyah is adopting strategies such as early contractor involvement in the design process to help better understand and manage construction risk. “We’re engaging with contractors and delivery partners as early as the concept design stages to get their feedback on the project’s constructability,” says Saad. “Later, these contractors can be invited to bid for the contract, which makes it easier for them and so they can be aware of any issues.”

Financial constraints

Another increasingly evident challenge is financing. As the gigaprojects programme steps up a gear, there have been growing strains on funding the huge costs associated with it, expenditure which in some cases is considerably higher than when first estimated during the initial master planning stages due to cost inflation and disruptions in the supply chain.

As with the other gigaprojects, Diriyah’s initial work has been fully funded by its PIF parent, but later phases will likely require other financing mechanisms. While some of this will come from the $100m in revenues it expects to make over the next year, the client company has been actively tapping into the capital markets, following in the footsteps of other gigaprojects such as Neom and Red Sea Global, which have concluded sizeable borrowing deals in the past two years.

This includes all options up to and including an initial public offering (IPO). The market consensus is that eventually all the PIF project company subsidiaries will go public when the time is right, and Diriyah is unlikely to be an exception.

For the same reason, the client is also exploring public-private partnerships (PPPs) to enable the private sector to take on some of the financial burden. For instance, City Cool Cooling Company recently won a $186m 25-year build-own-operate (BOO) concession to develop a 72,000-refrigeration-tonne district cooling plant. Future opportunities may include expansion of cooling capacity, other utilities and car parking operations.

“PPPs are a key component of our strategy,” says Saad. They provide a platform for private investors to participate in Diriyah's growth while leveraging the expertise and resources of the public sector. We realise we cannot build 10 million square metres alone. We need the private sector to participate and partner with us and give them an opportunity to be part of this journey.”

Another funding source will be off-plan property sales once its real estate offering comes to market. Based on the development plans, this is expected to be significant. With a mix of some 30,000 villas, apartments and townhouses, the ambition is to attract both local and expatriate residents, if or when the kingdom opens its property market to non-nationals.

Investment pathway

Eventually, third parties will also need to invest in the various real estate elements of the gigaproject. Diriyah Company, as a master developer, is actively seeking to attract other developers, family offices and financial institutions to develop land parcels for mixed-use, residential, hospitality, commercial, education and healthcare assets.

“We are already opening up to investors and meeting developers who are interested in partnering with us or buying land,” notes Saad. “It’s a good problem to have – there’s more interest than we can handle right now, which speaks volumes about the project's attractiveness.”

This is just as well. One criticism of the gigaprojects programme has been the shortfall in both local and international investment to date. A lack of understanding of what the gigaprojects are and will be, demand uncertainty, timeframe ambiguities and general market hesitancy have been identified as the stumbling blocks.

Diriyah is determined to change this situation. It is focusing on increasing public and investor awareness of the potential opportunity through initiatives such as its two-day Bashayer event last November, which showcased the masterplan and construction progress to selected key stakeholders. There has also been a push for greater transparency and publishing more specific details about the overall development to make it stand out from the crowded market.

The giant gigaproject is not being developed in isolation. Experience from successful developments worldwide highlights that connectivity and coordination with other government stakeholders are key. Diriyah is planned to be connected to an extension of Riyadh Metro’s Line 2 and a planned Line 7 linking it with King Khalid International airport and another gigaproject, Qiddiya. In total, four metro stations are planned for the development.

At the same time, talks are under way for Diriyah to be one of the main stations on the planned Q-Express high-speed rail link between the airport and Qiddiya, which will complement the metro network. For those arriving by car, there will be the opportunity to use the three-level, 1 million square-metre underground ‘super basement’ car park, which, with a capacity for 10,500 vehicles, will be the fifth-largest parking facility in the world, and by far the biggest in the region.

As Diriyah’s construction accelerates, it is already starting to define its identity more clearly. Building on the kingdom’s historical roots, it is set to create a new legacy for future generations.

https://image.digitalinsightresearch.in/uploads/NewsArticle/12260371/main.gif
Edward James

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

Click here to register
Exclusive from Meed
Related Articles
  • Kuwait awards oil contract to Baker Hughes

    18 August 2026

    Kuwait’s state-owned upstream operator Kuwait Oil Company (KOC) has awarded a multi-year contract to the Houston-based oil services company Baker Hughes, according to a statement from the US company.

    The contract is focused on accelerating technology innovation in the country’s upstream energy sector, the statement said.

    Baker Hughes did not disclose the contract value.

    It said that the deal positioned Baker Hughes as a key technology collaborator in the Ahmadi Innovation Valley (AIV), KOC’s flagship initiative aimed at establishing an in-country research and innovation hub to address its strategic oil and gas development priorities.

    Under the terms of the agreement, Baker Hughes and KOC will focus on developing and deploying technology solutions that optimise production as well as addressing other issues.

    Baker Hughes said it is planning to use its portfolio of digital and artificial intelligence (AI) automation solutions as part of the deal.

    These solutions are designed to help operators increase recovery from existing wells, lower operating costs, reduce water production and minimise power consumption, it said.

    Baker Hughes chairman and CEO Lorenzo Simonelli said: “Baker Hughes is committed to deeply understanding KOC’s development aspirations and providing the solutions needed to help achieve them.

    “Working together, we aim to deliver tailored technology solutions at scale that improve production performance and efficiency, supporting KOC’s goals to maximise value from their assets.”

    As part of the agreement, Baker Hughes will build a dedicated research and technology development centre in the AIV to deliver technology solutions and build local expertise.

    Kuwait’s oil and gas sector is currently in crisis due to the regional war that started after the US and Israel attacked Iran on 28 February.

    The war has severely disrupted exports through the Strait of Hormuz, which Kuwait relies on in order to ship crude exports.

    Shaikh Nawaf Saud Al-Sabah, deputy chairman and CEO of Kuwait Petroleum Corporation (KPC), the country’s state energy conglomerate, has described the current crisis as the biggest oil crisis the country has faced since Iraq’s 1990 invasion.

    Kuwait relies on the oil and gas sector for more than 90% of government revenues.

    Despite the dramatic reduction in crude exports, Kuwait’s state-owned oil companies continue to tender some projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18833241/main2359.jpg
    Wil Crisp
  • Firms submit Mid Island Parkway prequalifications

    18 August 2026

     

    Abu Dhabi’s Modon Infrastructure has received expressions of interest and prequalification statements for the next phase of Abu Dhabi’s Mid Island Parkway Project (MIPP), which will be developed as a public-private partnership.

    Modon Infrastructure will act as the lead developer and will hold a majority equity stake in the project company. It will award contracts for engineering, procurement and construction; operations and maintenance; and project advisory services.

    Phase two of the MIPP involves constructing about 11 kilometres (km) of highways, comprising a mix of three-, four- and five-lane sections. The highways will connect the Um-Yifeenah, Al-Jubail, Al-Sammaliyyah and Sas Al-Nakhl islands to Khalifa City and the E10 road.

    The scope also includes the construction of three interchanges – E20, E10 and Dumbbell – on Al-Sammaliyyah Island.

    The project includes several major structures, including the E20 interchange, which will feature cast-in-place box-girder and void-slab bridges, and the E10 interchange, which will feature cast-in-place box-girder bridges. It also includes I-girder bridges between Raha Beach West and Sas Al-Nakhl Island, as well as a causeway at Sas Al-Nakhl Island.

    Further elements include a cast-in-place balanced cantilever bridge between Sas Al-Nakhl Island and Al-Sammaliyyah Island; a tunnel between Al-Sammaliyyah Island and Bilrimaid Island; and a cut-and-cover tunnel on Bilrimaid Island. Another tunnel will connect Bilrimaid Island to Um-Yifeenah Island.

    Abu Dhabi awarded three packages for phase one of the MIPP in 2024. The contract for Package 1A was awarded to a joint venture of Turkish contractor Dogus Construction and UAE firm Gulf Contractors. Package 1B was awarded to a joint venture of Yas Projects (Alpha Dhabi Holding) and China Railway International Group. Beijing-headquartered China Harbour Engineering Company and the UAE’s Agility Engineering & Contracting Company won the contract for Package 1C.

    Phase one starts at the existing Saadiyat Interchange, connecting the E12 to the MIPP, and ends at the recently constructed Um-Yifeenah Highway.

    It comprises a dual main road with a total length of 8km, including four traffic lanes in each direction, two interchanges, a tunnel and associated infrastructure works.

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

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

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

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18830452/main.png
    Yasir Iqbal
  • Adnoc selects contractors for new LNG project in the UAE

    18 August 2026

     

    Abu Dhabi National Oil Company (Adnoc) has selected contractors for a design competition it is overseeing for a major project to build a new liquefied natural gas (LNG) export facility along the UAE’s eastern coast.

    The proposed onshore LNG liquefaction facility – whose precise location Adnoc has yet to reveal – will have a nameplate output capacity of 4 million tonnes a year (t/y) and will mainly serve export purposes, MEED reported in June. The facility will receive sales-gas-quality feedstock via pipelines from Adnoc’s gas processing facilities in Abu Dhabi and will export LNG via a loading jetty.

    MEED previously reported on Adnoc’s intention to execute work on the project through a design competition or front-end engineering and design (feed)-to-engineering, procurement and construction (EPC) contest.

    Under this model, the project operator selects contractors to carry out feed work. The operator then awards the EPC contract to the contractor with the most competitive feed proposal, while compensating the other contestants for their work.

    The Abu Dhabi energy giant has selected the following three entities to undertake feed work on the planned onshore LNG liquefaction facility, according to sources:

    • Saipem (Italy) / Larsen & Toubro Energy Hydrocarbon (India)
    • Technip Energies (France) / JGC Corporation (Japan)
    • Tecnimont (Italy)

    Adnoc issued draft letters of award to the selected contractors between 11 and 12 August, the sources added.

    In addition to the contractors picked by Adnoc, MEED previously reported that the following contractors were shortlisted for the feed-to-EPC contest:

    • McDermott (US)
    • Samsung E&A (South Korea)
    • Wison (China)

    MEED reported that Adnoc issued the expression of interest (EoI) document for the planned LNG facility project on 2 June, with contractors submitting responses by 5 June.

    Given the strategic importance of the project, Adnoc is understood to be fast-tracking the tendering exercise, issuing the main tender for the feed-to-EPC contest within days of the EoI submission. The company sought proposals from participating contractors by 1 July, sources said.

    In its EoI document, Adnoc said it intends to award the main EPC contract in the third quarter of this year.

    Adnoc has yet to specify where it plans to build the LNG complex, stating only in the EoI document that it will be located at a coastal site in the UAE.

    MEED understands Adnoc may be considering a site near one of the UAE’s eastern port facilities in the emirate of Fujairah. The blockade of the Strait of Hormuz in recent months has increased interest in prioritising exports and maritime trade through ports on the Gulf of Oman.

    The scope of work on the planned LNG facility covers the following units:

    LNG facilities:

    • An onshore LNG liquefaction facility in a coastal location, with a nominal output capacity of 4 million t/y;
    • Process units necessary to bring sales feed to a liquefaction-quality feed gas (i.e. carbon dioxide removal, dehydration, mercury removal and total sulphur reduction);
    • Common facilities including inlet receiving facilities, refrigerant storage and flares;
    • Utilities to support the facility, allowing it to be self-sufficient, including but not limited to local power generation and any necessary tie-ins;
    • LNG export facilities, including a jetty and berth;
    • Structures including control buildings, amenities, a laboratory, a warehouse, workshops and administration buildings, to fully support the plant operation.

    LNG storage facilities:

    • LNG storage tanks, handling of boil-off gases (BOG) and potentially a BOG reliquefaction unit to facilitate major shutdown operations for bidders opting to compete with a single liquefaction train option.

    Feed gas supply:

    • Supplying and installing an additional identical gas compressor to be located at an existing compression station near Adnoc Gas’ Habshan complex in Abu Dhabi, to provide additional capacity in an existing gas pipeline system;
    • A new feed gas pipeline, approximately 160 kilometres long, to route sales gas quality feed gas from an existing pipeline network to the LNG facility.

    Modifications to upstream facilities (alternative scope):

    • Installation of sulphur removal beds in Habshan to bring feed gas to required LNG quality at the upstream gas conditioning facility, rather than at the LNG facility. This may be selected by bidders to avoid additional investment for processing the regeneration gas.

    Construction facilities:

    • Temporary construction facilities, laydown area and material offloading facility, to support EPC execution requirements;
    • Construction labour accommodation camp.
    Adnoc LNG output capacity

    Adnoc has an LNG liquefaction capacity of 6 million t/y, which is set to more than double to 15 million t/y when its under-construction LNG terminal complex in Abu Dhabi’s Ruwais enters operations in 2028.

    The upcoming LNG export terminal in Ruwais will have the capacity to produce about 9.6 million t/y of LNG from two processing trains, each with a capacity of 4.8 million t/y.

    Adnoc awarded the full EPC contract and reached the final investment decision for the Ruwais LNG terminal project in June 2024. A consortium of France’s Technip Energies, Japan-based JGC Corporation and Abu Dhabi-owned NMDC Energy – a subsidiary of NMDC Group – was awarded the $5.5bn EPC contract. In March of that year, Adnoc issued a limited notice to proceed to the consortium of contractors led by Technip Energies for early EPC works on the Ruwais LNG terminal project.

    The complex will feature process units, storage tanks and an export jetty for loading cargoes and LNG bunkering, as well as utilities, flare handling systems and associated buildings.

    The planned LNG facility will run on electric-powered rotary equipment and compressors instead of gas-fired units. Adnoc awarded a $400m contract in October 2023 to US-based Baker Hughes for the supply of all-electric compression systems for the project. The LNG trains will run on energy-efficient Baker Hughes technology, including compressors driven by 75MW electric motors.

    Adnoc has also signed agreements with international energy companies to divest a total stake of 40% in the Ruwais LNG project. UK energy producer BP, Mitsui & Co, Shell and French energy producer TotalEnergies will each hold 10% stakes in the Ruwais LNG terminal project, with Adnoc retaining the majority 60% stake in the facility.

    Adnoc Group subsidiary Adnoc Gas will acquire its parent company’s 60% stake in the Ruwais LNG facility at cost in the second half of 2028, when first production from the complex is due.

    To date, Adnoc has secured offtake agreements totalling 8 million t/y, representing approximately 90% of the Ruwais LNG project’s output capacity.

    Photo for illustration only

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18829520/main.jpg
    Indrajit Sen
  • Saudi Arabia extends bid deadline for Round 7 solar projects

    18 August 2026

     

    Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), has extended the deadline for developers bidding for four solar projects under the seventh round of the National Renewable Energy Programme (NREP).

    Round seven of the NREP comprises solar photovoltaic (PV) and wind independent power producer (IPP) projects with a combined capacity of 5,300MW. The renewables programme is being led and supervised by the Ministry of Energy.

    The four solar PV projects comprise:

    • 1,400MW Tabjal 2 solar PV IPP (Tabrijal, Al-Jouf province)
    • 600MW Mawqqaq solar PV IPP (Mawqqaq, Hail province)
    • 600MW Tathleeth solar PV IPP (Tathleeth, Aseer province)
    • 500MW South Al-Ula solar PV IPP (Al-Ula, Medina province)

    The projects were tendered in January, with submissions previously expected by 30 August. The new deadline is 13 September.

    The programme also includes the 1,300MW Bilgah and 900MW Shagra wind IPPs. The bid submission deadline for these projects is 14 September.

    As previously reported by MEED, procurement for the seventh round of the NREP opened in August 2025 when SPPC issued a request for qualification. 

    In January, MEED reported that 16 developers qualified to bid as both managing and technical members for the four solar PV projects. A further six companies qualified to bid as a managing member only.

    For the wind IPPs, SPPC qualified 13 developers in the managing and technical members category, and a further six companies in the managing member category only. The request for proposals for both wind and solar IPPs was issued that same month. 

    The renewable energy programme aims to supply 50% of the kingdom’s electricity from renewable energy by 2030.

    Earlier rounds under the NREP have already put in place large capacities. Last October, SPPC awarded contracts to develop and operate five renewable energy projects under round six of the NREP.

    These comprise four solar PV IPP projects and one wind IPP project with a total combined capacity of 4,500MW.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18828963/main.jpg
    Mark Dowdall
  • Construction begins on phase two of Cairo Metro Line 4

    18 August 2026

    Egypt’s National Authority for Tunnels (NAT) has begun implementing the second phase of Cairo Metro’s Line 4, spanning about 27 kilometres.

    The main construction works contract was awarded to a joint venture of local firms, including Arab Contractors, Hassan Allam, Petrojet and Concord Engineering & Contracting.

    Cairo Metro Line 4 will stretch from Fustat station to Zahraa Nasr City station in New Cairo. The line will comprise 21 stations, 15 underground and six elevated.

    According to data from regional projects tracker MEED Projects, the scope also covers:

    • Construction of a tunnel route starting from Al-Fustat station, following Salah Salem Road, and intersecting with the sixth metro line at Sayeda Aisha station
    • An extension along Hafez Ibrahim Street, intersecting the Shinzo Abe Axis and linking Ahmed Al-Zomor and Al-Mithaq streets
    • A section running via Nasr Road and Nasr City to Anwar Al-Mufti Street, with an interchange with the East Nile Monorail at Aviation station
    • Construction of a depot at the Omra El-Gasima site
    • Integration of interchange stations with existing lines, including Line 1 and Line 2
    • Construction of structures over and under major roadways, including the Ring Road and Cairo-Suez Road
    • Earthworks and site preparation, including elevated foundations and underground excavations
    • Construction of all other associated infrastructure

    Local media reports said construction work on the first phase of Line 4 is expected to be completed in 2028.

    The joint venture of Arab Contractors, Hassan Allam, Petrojet and Concord Engineering & Contracting is also undertaking the main works on the first phase.

    The Japan International Cooperation Agency (Jica) provided half of the $4bn funding required for Line 4’s first phase.

    The media reports added that NAT is currently studying the third and fourth phases of Line 4.

    The third phase aims to connect the Ashgar Gardens and Al-Hosary areas via a rail line spanning more than 16km.

    The fourth phase will be more than 38km long and will connect the Al-Rehab area with the capital’s international airport east of Cairo.

    Once completed across all phases, Line 4 will link 6th of October City with southern and eastern Cairo, the New Administrative Capital and Capital International airport, making it one of the longest transport networks in the country.

    In April last year, MEED reported on Egypt’s future rail project plans, which include eight key projects spanning metro, high-speed rail and light rail transit.

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

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

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

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18825481/main.jpg
    Yasir Iqbal