Market snapshot of the GCC’s 2023 planned awards

6 March 2023

Key points: 

> OUTLOOK FOR 2023: Taking contracts in tender and most likely to be awarded this year, we have visibility on more than $110bn-worth of projects. Saudi Arabia and the UAE could grow by 20 per cent this year, with even sharper increases in Kuwait, Oman and Bahrain, albeit from much smaller bases. The only market that could decline is Qatar.

> SECTOR FORECAST: The spread of sector performance in 2023 is evenly apportioned between segments. Construction appears to be well down on 2022, but this also reflects its lower short-term visibility and quick turnover of awards in a given year. Power, petrochemical and water projects are anticipated to perform exceptionally well.

> GCC FUTURE PIPELINE: Saudi is by far the largest projects market in terms of its projects pipeline, with more than $1.2tn of unawarded work. Construction continues to dominate the GCC's 2023 planned awards with more than half of known future projects by sector.

> TOP FUTURE CLIENTS: Neom is by far the largest future client as befits its status as the world’s biggest project. Aramco is a familiar face, as are Qatargas, Aldar and Adnoc. But other clients have emerged such as Roshn, Red Sea Global, Jeddah Central Development Company and Diriyah Gate Development Authority, which are developing the kingdom’s mega/gigaprojects.

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MEED Editorial
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    When Dean McGrail describes the performance of the region’s construction market, he keeps returning to a single word: “stable”.

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    “We have seen some projects re-evaluated – questions around whether the mix between residential and commercial is right, and whether it should be luxury residential,” he says. “But as of today, we have not seen any projects cancelled, which is a real sign of resilience in the market.”

    Under the surface

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    “None of the projects we are currently involved in have been put on hold or suspended,” he says. “It is more re-evaluation. Some of that is investor sentiment, but some of it is materials and logistics as well, which people do not necessarily consider.”

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    “Requests for proposals have not slowed down across any of our disciplines or business units,” he says. “We are definitely seeing an uptick in infrastructure.”

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    That focus points to where McGrail expects the next few years of growth to come from. Rail sits at the centre of the UAE story, alongside road upgrades and other major developments in Abu Dhabi. In Dubai, the clearest signal of intent is the expansion of Al-Maktoum International airport.

    “Al-Maktoum is a really good indicator of the future direction of travel,” he says. “That is not a project that is slowing down. There has been a commitment to Emirates that it will move there, and it is still progressing.”

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    “One of the beauties of this region is the ability of government to step in,” he says. “They can fund it. If the private sector does start to suffer, that is the backstop. They push money into infrastructure – roads, rail, airports – which keeps our industry moving.”

    Saudi reset

    In Saudi Arabia, the recalibration story predates the conflict, and McGrail says the change should be read as a strength rather than a retreat.

    “I am positive,” he says. “When the reprioritisation started at the beginning of 2025, having lived through the global financial crisis here, I saw the decision to stop, re-evaluate and reprioritise expenditure as a positive. When Vision 2030 was set, Saudi Arabia had not won Expo or the World Cup, so the reprioritisation was the right thing to do. Saudi Arabia will come out of it stronger. Short-term pain, long-term gain.”

    The nature of the work is shifting with the budget. McGrail sees the kingdom moving towards a model long familiar in the UAE, in which core infrastructure and a handful of landmark buildings are delivered first, before surrounding plots are carved up and sold on.

    “You establish a few key iconic buildings, then the plots on the outside are carved up and they look for external investment to come in and develop them,” he says. “It is no different from Downtown Dubai, where Emaar built the Burj Khalifa and a few buildings, then started selling plots.”

    That approach is increasingly tied to public-private partnerships (PPPs), although McGrail is measured on how far the model will stretch.

    “PPP is definitely becoming more prevalent on some of the larger infrastructure projects, though still not as significant as it was made out to be when they first started talking about it,” he says. He sees industrials, mining, healthcare and schools as a natural fit, rather than PPP becoming a blanket procurement route.

    Aviation is another priority. WSP was recently appointed to the rehabilitation of the existing terminal at Jeddah’s King Abdulaziz International airport, alongside a new terminal. It also recently secured a role on the expansion and upgrade of King Fahd International airport in Dammam.

    “Aviation is definitely a key area of focus for us as we head into the next 12, 24, 36 months,” McGrail says.

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