meed-logo

line1 line2 line3
SIGN IN / REGISTER

Muted public spending hinders global tunnelling

4 April 2025

 

This package also includes: Traffic drives construction underground

The pipeline of tunnel construction projects around the world as tracked by GlobalData stands at $1.3tn, encompassing projects from announcement to execution.

The total pipeline value reflects the overall values of projects that are either entirely tunnels or that have tunnels as an integral part of the work. The project pipeline includes tunnelling works across a range of sectors, including road and railway development, as well as water and sewerage.

The pipeline of tunnel construction projects around the world currently stands at $1.3tn

Subdued spending

Public spending is anticipated to remain muted globally in the short term, as governments are still trying to curtail expenditure to reduce public debt, thereby constraining investments in public infrastructure. This is affecting the demand for tunnel construction, which heavily relies on public infrastructure development. Elevated construction material prices, high interest rates and labour and skill shortages are expected to discourage new investment, further reducing demand for tunnel construction.

These challenges have already impacted project viability, leading to the withdrawal or postponement of funding for 50 projects in Australia’s $78.6bn infrastructure investment programme due to cost increases of over $21bn. The conflicts in Russia and Ukraine, the situation in Gaza and disruptions to shipping in the Red Sea are weighing on new investment levels, particularly in Eastern Europe and the Middle East and North Africa region due to increased uncertainty.

However, this decrease in new tunnel investment is not expected to be uniform globally, as China’s significant infrastructure investment drive, the US’ Infrastructure and Jobs Act and India’s various infrastructure investment programmes are driving new investment in their respective regions.

> Middle East and North Africa (Mena)
The Mena region has a tunnel construction pipeline valued at $128.6bn. The UAE is one of the leading markets, with $25.4bn of projects that are mainly for metro systems and water and sewage tunnels. Across the region, economic factors like high debt and lower oil revenues may hinder the progress of these projects in the future.
> Western Europe

Western Europe has a tunnel construction project pipeline valued at $329.5bn, with Switzerland leading with $60.6bn of projects, follwed by Germany with $56.8bn. Notable projects include the Turin-Lyon tunnel and the Genoa underwater tunnel. Projects in pre-execution and execution stages total $222.8bn, with the highest-value project being Zurich’s $38.8bn CST (underground cargo) Freight Metro Tunnel.

> Northeast Asia

Northeast Asia’s tunnel construction pipeline is valued at $327.7bn, with China contributing $220.3bn, including the $42.4bn Dalian-Yantai undersea railway tunnel. Japan has projects worth $101.3bn, primarily the $65.2bn Tokyo to Nagoya Maglev Railway Line. Most projects are in later development stages, totalling $198.3bn, or 69.8% of the pipeline.

> Australasia

Australasia’s tunnel construction pipeline totals $150.1bn, with Australia holding $112.9bn, about 75% of the region’s value. The largest project is the $87bn Melbourne Suburban Rail Loop, a 90km rail loop with 13 stations. Construction on six stations began in 2022, with the entire project expected to finish by 2050, though rising costs and labour shortages may affect this.

> North America

North America’s tunnel projects are valued at $92.4bn, with $63.6bn in pre-execution and execution stages. The pipeline includes 921.8km of tunnels, primarily in the US. Railway tunnels are the largest segment at $40.7bn, with the Hudson River Rail Tunnel being the highest-value project at $16bn.

> Southeast Asia

Southeast Asia’s tunnel pipeline is valued at $91.3bn, with $55.1bn under construction. Singapore leads with $45.2bn, mainly from rail tunnel projects. The Land Transport Authority awarded a $199m contract for tunnels connecting MRT stations as part of the Cross Island Line’s second phase.

> Eastern Europe

Eastern Europe’s pipeline is valued at $56.3bn, with $46.9bn in pre-execution and execution stages. Major contributors include Turkiye, Czechia and Romania, which has the largest share at $16.3bn. The $9bn Bucharest Metro Line 5 is a key project expected to complete by 2033, with spending projected to rise in the coming years.

> South Asia

South Asia’s tunnel construction pipeline is valued at $47.9bn, with India contributing $31.9bn, primarily from road tunnels. A notable project is the $1.3bn Thane to Borivali underground tunnel. The pipeline includes 2,043.7km of developments, with spending expected to reach $1.8bn in 2024.

> Latin America

Latin America has a growing tunnel construction pipeline valued at $30.3bn, with $28.7bn in later development stages. The region includes 276.2km of projects, with Colombia leading at 92.1km. The highest-value project is the $9.6bn Bogota Metro, which began construction in early 2021.

> Sub-Saharan Africa

Sub-Saharan Africa’s tunnel construction pipeline is valued at $6.7bn, with 63.7% in pre-execution and execution stages. The pipeline includes 1,580km of projects, primarily in Tanzania, Ethiopia and Kenya. Spending may reach $685.4m in 2025, but investment constraints may limit new projects.

In conclusion, while the global tunnel construction industry faces challenges due to muted spending, high construction material prices and geopolitical uncertainties, significant infrastructure investment initiatives in countries like China, the US and India are expected to continue driving new investment.

Traffic drives construction underground 

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/13568541/main.gif
Colin Foreman

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

Click here to register
Exclusive from Meed
Related Articles
  • Deadlines extended for Kuwait oil projects worth $2.5bn

    30 July 2025

    Register for MEED’s 14-day trial access 

    Kuwait’s state-owned upstream operator Kuwait Oil Company (KOC) has extended bid deadlines for six vital oil projects, which are estimated to be worth a total of $2.5bn.

    The first contract, estimated to be worth KD292m ($951m), is focused on developing a separation facility in the NK SA/BA Area, close to Gathering Centre 23 (GC-23) and GC-24.

    The scope of the contract also includes a new injection facility at GC-31 and effluent water injection networks in north Kuwait. The project’s latest bid deadline has been set for 5 August.

    The second contract is to develop the planned Mutriba remote boosting facility in northwest Kuwait. It was originally tendered earlier this year with a bid submission deadline of 29 June. The deadline has now been extended to 17 August.

    The project has an estimated budget of about KD130m ($420m) and its scope includes:

    • Development of the Mutriba oil field
    • Installation of the degassing station
    • Installation of manifolds
    • Installation of condensate facilities
    • Installation of wellhead separation units
    • Installation of the pumping system
    • Installation of wellhead facilities
    • Installation of oil and gas treatment plants
    • Installation of a natural gas liquids plant
    • Installation of a water and gas injection plant
    • Construction of associated utilities and facilities

    The onshore Mutriba oil field is located in northwest Kuwait.

    In October 2024, KOC announced that it was preparing to tender a project management contract for a scheme to develop the field.

    At the time, it said four international companies had been invited to participate in the tender process. These were:

    • Schlumberger (US)
    • Halliburton (US)
    • Baker Hughes (US)
    • Weatherford International (US)

    KOC also said that the list of qualified companies could be extended before the invitation to bid was issued.

    The third project, estimated to be worth $100m, is for an effluent water injection network in north Kuwait. The bid deadline has been extended to 5 August.

    Effluent water injection or water flooding is a secondary hydrocarbons recovery technique where produced water is injected into a well’s formation under high pressure and temperature conditions to recover more of the oil initially in place.

    The fourth project is estimated to be worth around $100m and is focused on the construction of a new injection network in north Kuwait that will service the Sabriyah/Bahra (SA/BA) area. Its bid deadline has also been extended to 5 August.

    The fifth project that has had its deadline extended is focused on developing Jurassic Light Oil (JLO) export facilities and upgrading the existing export network.

    The main contract bid submission date for the project, which is understood to have a budget of KD175m ($569m), has been changed to 3 August.

    The project was originally tendered in November last year with a bid deadline of 1 December 2024. Other recent deadlines have included 15 July, 24 June, 27 May, 27 April and 6 April.

    In an announcement in April last year, KOC prequalified up to 15 contractors to bid for these projects:

    • CTCI (Taiwan)
    • Daewoo Engineering & Construction (South Korea)
    • Fluor (US)
    • Hyundai Engineering & Construction (South Korea)
    • Hyundai Engineering Company (South Korea)
    • Hyundai Heavy Industries (South Korea)
    • JGC Corporation (Japan)
    • Larsen & Toubro Energy Hydrocarbon (India)
    • NMDC Energy (UAE)
    • Petrofac (UK)
    • Saipem (Italy)
    • Samsung E&A (South Korea)
    • Sinopec Engineering Corporation (China)
    • Sinopec Luoyang Engineering Company (China)
    • Tecnicas Reunidas (Spain)

    In September 2024, KOC announced a second list of 13 prequalified contractors, with Hyundai Heavy Industries and NMDC Energy removed from the list.

    At the time, KOC said that companies not included on the list could file a complaint against their non-inclusion before the official invitation to bid on the project.

    It is unclear whether more prequalified companies have been added or removed from the list since September.

    The sixth project that has seen its bid deadline extended is focused on developing separation facilities at GC-25 and a water injection facility at GC-30.

    The contract is estimated to be worth KD104m ($338m). In the latest extension, the bid deadline has been set for 10 August.

    Kuwait is in the middle of an upstream projects push, in line with its goal of producing 4 million barrels a day of oil by 2035.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14364081/main4907.jpg
    Wil Crisp
  • Arada awards $16m retail complex construction deal

    30 July 2025

    Sharjah-based real estate developer Arada has awarded a AED60m ($16m) contract to build the Masaar Central project in the Suyouh district of Sharjah.

    The contract was given to the local firm Intermass Engineering & Contracting.

    Masaar Central will serve as the retail hub at the centre of the Masaar project.

    Construction is expected to begin soon, with completion slated for 2026.

    Masaar Central will offer retail, dining, wellness and education facilities over an area of 53,000 square feet.

    In June last year, Arada awarded a AED830m ($226m) contract to Intermass Engineering & Contracting to build 597 units in the Saro cluster of the Masaar project.

    Intermass has previously completed the Sendian cluster, the first residential phase of Masaar, and is currently working on Robinia, Masaar’s third phase.

    Valued at AED8bn, the Masaar scheme includes 4,000 villas and townhouses across eight gated districts, featuring a nature-inspired masterplan with more than 50,000 trees.

    Arada’s new project launches reflect increased activity in the UAE real estate market, where projects worth over $323bn are in execution or planning stages.

    This aligns with a forecast from UK data analytics firm GlobalData, predicting that the UAE construction sector will grow by 4.2% in real terms in 2025, driven by infrastructure, energy, utilities and residential construction projects.

    READ THE AUGUST 2025 MEED BUSINESS REVIEW – click here to view PDF

    Gulf heads into a new era of aviation; Maghreb’s resilience rises despite global pressures; GCC banks expand issuance amid demand

    Distributed to senior decision-makers in the region and around the world, the August 2025 edition of MEED Business Review includes:

    > MAGHREB MARKET FOCUS: Maghreb pushes for stability
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14364351/main.jpg
    Yasir Iqbal
  • Contract award nears for King Salman airport runway

    30 July 2025

    Related stories:

    > Middle East invests in giant airports
    > Broader region upgrades its airports
    > Global air travel shifts east

     

    Register for MEED’s 14-day trial access 

    King Salman International Airport Development Company (KSIADC) has received best and final offers (bafos) for a design-and-build contract to develop the third runway at King Salman International airport (KSIA) in Riyadh.

    "Bafos were submitted earlier this month [in July] and the contract is expected to be finalised soon," a source close to the project told MEED.

    It is understood that the third and fourth runways will add to the two existing runways at Riyadh’s King Khalid International airport, which will eventually become part of KSIA.

    In February, MEED exclusively reported that firms had submitted prequalification documents on 18 January for a contract to develop the third runway and taxiways at KSIA.

    KSIADC, which is backed by Saudi sovereign wealth vehicle the Public Investment Fund, received interest from firms in December last year for the package.

    KSIADC previously prequalified firms for the main engineering, procurement and construction packages and early and enabling works, as well as other elements of the construction work. These included specialist systems and integration; materials and equipment; engineering and design; professional services; health, safety, security, environment and wellbeing services; modular installation and prefabrication; local content; and environmental, social and governance (ESG) and other services.

    The entire scheme is divided into eight assets:

    • Iconic Terminal
    • Terminal 6
    • Private aviation terminal 
    • Central runway and temporary apron
    • Hangars
    • Landside transport
    • Cargo buildings
    • Real estate

    In August last year, KSIADC appointed several architectural and design firms for the various elements of the project.

    KSIADC confirmed that it had signed up UK-based Foster + Partners to design the airport’s masterplan, including the terminals, six runways and a multi-asset real estate area.

    US-based engineering firm Jacobs will provide specialist consultancy services for the masterplan and the design of the new runways.

    The client also confirmed the appointment of UK-based engineering firm Mace for the delivery partner role on the project.

    The airspace design consultancy contract was awarded to local firm Nera.

    Mega airport project

    The project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways. It will include the existing terminals at King Khalid International airport, as well as 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.

    If the project is completed on time in 2030, it will become the world’s largest operating airport in terms of passenger capacity, according to UK analytics firm GlobalData.

    The airport aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. The goal for cargo is to process 3.5 million tonnes a year by 2050.

    Saudi Arabia plans to invest $100bn in its aviation sector. Riyadh’s Saudi Aviation Strategy, announced by the General Authority of Civil Aviation, aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.

    It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations. 

    READ THE AUGUST 2025 MEED BUSINESS REVIEW – click here to view PDF

    Gulf heads into a new era of aviation; Maghreb’s resilience rises despite global pressures; GCC banks expand issuance amid demand

    Distributed to senior decision-makers in the region and around the world, the August 2025 edition of MEED Business Review includes:

    > MAGHREB MARKET FOCUS: Maghreb pushes for stability
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14363916/main.jpg
    Yasir Iqbal
  • NMDC Energy begins fabrication at Saudi Arabia yard

    29 July 2025

    Register for MEED’s 14-day trial access 

    Abu Dhabi-owned contractor NMDC Energy has started fabrication activities at its new yard in Ras Al-Khair, Saudi Arabia.

    Built at a cost of AED200m ($54.5m), the yard covers 400,000 square metres within the Ras Al-Khair Special Economic Zone in the kingdom’s Eastern Province. It has a production capacity of 40,000 tonnes a year.

    NMDC Energy held a steel-cutting ceremony on 28 July to mark the start of operations at the Ras Al-Khair yard.

    The Abu Dhabi Securities Exchange-listed company inaugurated the facility in mid-January.

    NMDC Energy signed a memorandum of understanding with Aramco to build the facility in 2018, when it was known as National Petroleum Construction Company (NPCC).

    Nine offshore jackets are currently in production for NMDC Energy’s client, Saudi Aramco.

    More than 1,800 employees will be mobilised from Abu Dhabi to the Saudi Arabia yard, NMDC Energy said.

    “The Ras Al-Khair yard is central to NMDC Energy’s Saudi strategy and localisation roadmap. Over the past five years, the company has reinvested billions of riyals into the Saudi economy and is on track to increase its In-Kingdom Total Value Add score to 39% by 2025 and 51% by 2028,” NMDC Energy added.

    ALSO READ: Aramco offshore contract awards set to rebound

    READ THE AUGUST 2025 MEED BUSINESS REVIEW – click here to view PDF

    Gulf heads into a new era of aviation; Maghreb’s resilience rises despite global pressures; GCC banks expand issuance amid demand

    Distributed to senior decision-makers in the region and around the world, the August 2025 edition of MEED Business Review includes:

    > MAGHREB MARKET FOCUS: Maghreb pushes for stability
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14359665/main.jpg
    Indrajit Sen
  • Miral moves Harry Potter theme park bid deadline

    29 July 2025

     

    Register for MEED’s 14-day trial access 

    Abu Dhabi’s Miral has extended the bid submission deadline for a tender to build a Harry Potter-themed expansion at the Warner Bros World Yas Island entertainment destination in Abu Dhabi.

    Earlier this month, MEED exclusively reported that the tender for the estimated AED2bn-AED3bn ($545m-$816m) main construction works had been issued to contractors, with bids initially due on 28 July.

    Miral has extended the bid submission deadline until 4 August, according to sources.

    The scope of the Warner Bros World phase two expansion includes adding 40,000 square metres (sq m) to the existing theme park. This will include a Harry Potter-themed zone with three new rides, retail outlets, and food and beverage facilities.

    Enabling works for the project have begun and are being undertaken by local firm NSCC International. Another local firm, Emirates Electrical & Instrumentation Company, is carrying out the early works.

    Canadian engineering firm EllisDon is the project consultant, and French firm Egis is the lead designer.

    According to media reports, the Abu Dhabi project will be the world’s sixth Harry Potter-themed park. The others are in Florida and California in the US, Beijing in China, Osaka in Japan and Leavesden in the UK.

    The Abu Dhabi project was first announced in November 2022.

    Yas Waterworld

    Miral has developed a series of theme parks and other entertainment-related attractions on Yas Island, working with several local and international contractors.

    On 1 July, Miral opened a new 16,900 sq m expansion of its Yas Waterworld park to the public.

    The expansion added 3.3 kilometres of slide sections to the park. The addition of 18 new rides and attractions, bringing the total number of rides to more than 60, is expected to increase visitor capacity by 20%.

    Construction was carried out by local contractor Alec.

    Disney park

    In May, The Walt Disney Company and Miral signed an agreement to build a Disney theme park resort on Yas Island.

    Disney, which is based in the US, said the Abu Dhabi site will be its seventh theme park resort. The others are in California and Florida in the US, Paris in France, Hong Kong and Shanghai in China, and Tokyo in Japan.

    In a statement, Disney noted that the UAE is located within a four-hour flight of one-third of the world’s population, making it a significant gateway for tourism. It is also home to one of the world's busiest airline hubs, with 120 million passengers travelling through Abu Dhabi and Dubai each year.

    The Disney theme park resort in Abu Dhabi will include entertainment areas, themed accommodations, dining venues and retail experiences.

    In 2023, Miral opened SeaWorld Abu Dhabi, also on Yas Island. Alec was the contractor for the estimated $565m project.

    In 2018, Miral opened the Warner Bros theme park on Yas Island. Belgium’s Besix was the contractor for the estimated $531m project.

    Other Miral projects have included the Etihad Arena and the indoor climbing and skydive centre Clymb. Bam International of the Netherlands was the contractor for the arena and Germany’s Zublin was the contractor for Clymb.

    Yas Island was launched as a project in 2006 by local developer Aldar Properties. The original centrepiece attractions were the Yas Marina Circuit, which hosts Formula 1 motor racing’s annual Abu Dhabi Grand Prix, and the Ferrari World theme park.

    READ THE AUGUST 2025 MEED BUSINESS REVIEW – click here to view PDF

    Gulf heads into a new era of aviation; Maghreb’s resilience rises despite global pressures; GCC banks expand issuance amid demand

    Distributed to senior decision-makers in the region and around the world, the August 2025 edition of MEED Business Review includes:

    > MAGHREB MARKET FOCUS: Maghreb pushes for stability
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14358463/main.jpg
    Yasir Iqbal