meed-logo

line1 line2 line3
SIGN IN / REGISTER

Neom to fix construction

25 April 2023

 

The global construction industry is in a parlous state. Construction companies typically operate with low single-digit margins if they are doing well, and one bad project could mean they join a growing list of bankruptcies. 

Developing the world’s largest project may seem like a step too far against this backdrop, but for David Heron, Neom’s director of industrialised design and construction, the scale of development at the $500bn Saudi gigaproject offers the scope and continuity required to solve the industry’s problems.

“There is a general recognition within the industry that it is broken. The challenge has been that individual companies are too small to have the required level of impact to change the industry,” says Heron. 

“Neom is a unique opportunity because of its scale, in terms of spending and the longevity of the project. It will be able to build up the evidence base that demonstrates that things can be done differently.”

Neom has grand ambitions as it sets about transforming the construction industry. “We want to achieve 30 per cent reductions in cost, speed and time, and we think we can go beyond that,” he adds.

World’s largest piling project shifts to The Line’s marina

Improving efficiency

The key to unlocking those efficiency improvements is integrating the design and the construction processes. “When we say design and construction, most people think construction, but we are constantly trying to shift the conversation back to design,” says Heron.

Before design work can start, the brief has to be clear. “The starting point is understanding what people want, and most construction projects today are too small to warrant that kind of investment.

“You need to do market research to really understand what you want, so what happens in most construction projects is that 40 per cent of the design spend goes on during the course of construction as people figure out what it is they actually wanted to build,” says Heron.

“If we understand more clearly what we are designing, we can deliver it more efficiently. We call that an end-to-end process, or industrialised design and construction, because we are industrialising both the design process and the delivery. 

“We would even love to not use the word construction because it is really much more about manufacturing and assembly. When you say construction, people think concrete blocks and mortar. We are trying to shift away from that.” 

The proposed shift requires moving construction activity off-site and rethinking how projects are delivered. “It is completely rethinking the whole process for understanding what we are trying to create, as an experience.

“The starting point for Neom is that we are the investor, so it is incumbent on us to be clearer about what we want,” he adds. 

“When we start thinking about the design process, we need to be clear. We will probably be much clearer than on many other projects about who the target population is and what the experiences are that we want to create for that population.”

Neom will build up the evidence base that demonstrates that things can be done differently
David Heron, Neom 

Manufacturing approach

Heron explains that manufacturing environments are far safer and provide higher-quality jobs with more diversity. 

Gender diversity has been easier to achieve in the manufacturing environment than on the construction site. Quality control is also easier in a manufacturing environment, as it can be monitored from both a process and product perspective. 

For a manufacturing approach to work, different processes must be adopted from the beginning of the architectural design process.

“Typically, it is the general contractor that starts to think about how the site is organised. If we are going down a prefabricated route, you start to think about it at the beginning. Logistics becomes an issue for architects because the access to the site influences the way we design buildings,” says Heron.

Innovation is essential to Neom’s vision of transforming the industry. “If we are going to transform the industry, the opportunity is absolutely massive. We are not talking about incremental innovation, we are talking about fundamentally transformative innovation, and we want that to be done here at Neom,” Heron says.

“Because of the scale of Neom, there is a massive economic return on investing in innovations that just do not exist outside of Neom,” he adds.

The benefits are not just financial. In the modern world, construction has come under pressure for its carbon emissions, and while it is developing large projects, Neom is reducing the impact on the environment. 

“Thirty-eight per cent of global carbon dioxide emissions come from building, and 40 per cent of what goes to landfill is construction and demolition waste. Something like 70 per cent of all the embodied carbon in a building is from the concrete. 

“We are building big buildings, so one of the very first things we did two years ago was to look at how we can significantly reduce emissions from concrete, and there is a whole host of levers that we are pulling,” says Heron.

“We are working closely with local industry. On the cement side, we are looking at different cement mixes, looking at using alternatives to clinker, looking at Neom-specific concrete mixes that maximise the use of locally available materials, and we have minimised the logistics. 

“We are also looking at design and challenging the engineers that are designing buildings. We see that as a massive opportunity. Everyone talks about construction, but really the opportunities lie in design.” 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10786799/main.gif
Colin Foreman

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

Click here to register
Exclusive from Meed
Related Articles
  • Dubai property bubble risk rises as price growth stalls

    25 September 2026

    Register for MEED’s 14-day trial access 

    Dubai’s residential property market remains in elevated bubble-risk territory after a sharp slowdown in price growth, according to UBS.

    The emirate’s housing boom came to an abrupt halt at the onset of the regional conflict, the Swiss bank said in its Global Real Estate Bubble Index 2026 report. Inflation-adjusted house prices have fallen back to mid-2025 levels, after real growth of more than 10% in 2025.

    Dubai scored 1.16 on the index, up on last year, placing it fourth among the 23 cities covered. Only Zurich and Tokyo, at 1.69 and 1.54 respectively, are classed as high risk. Miami, Seoul, Geneva and Lisbon join Dubai in the elevated category, which covers scores between 1.0 and 1.5.

    Real prices in Dubai rose by 0.4% in the year to Q2 2026, while real rents fell by 4%. UBS said bubble risk remained elevated despite some easing since March.

    Ownership costs

    UBS said existing tenants were likely to take advantage of the pause in price growth and, in some cases, price concessions to buy homes. Despite elevated mortgage rates, Dubai remains one of the few markets where ownership is relatively attractive given the high cost of renting, according to the bank.

    A skilled service worker in Dubai needs about five years of average income to buy a 60-square-metre apartment near the city centre, compared with about 15 years in Hong Kong and 11 years in London. It takes 16 years of rent to pay for an equivalent apartment, one of the lowest ratios in the study. UBS attributed the low price-to-rent ratios in Dubai, Sao Paulo and the US cities surveyed to less regulated rental markets and higher interest rates, as well as elevated risk premiums in Dubai and Sao Paulo.

    The bank said uncertainty over whether the inflow of high-income earners would recover was weighing on the premium segment. It added that Dubai’s structural advantages, including its strategic location and its appeal as an international business hub, remained intact, and that an improvement in the geopolitical environment was likely to support a rapid recovery in market sentiment and price expectations.

    Supply is a further source of uncertainty. Some developments have stalled, and others may be delivered later than planned, although UBS said the market remained exposed to heightened volatility because of persistent concerns about structural oversupply.

    Global slowdown

    Across the cities analysed, real residential prices rose by an average of 0.5% in the year, down from 1.4% in mid-2025. Seoul recorded the strongest real growth, at 11%, while Toronto and Vancouver fell by about 10%.

    The report also points to Gulf capital supporting other markets. UBS said interest from Middle Eastern buyers could further lift prices in Geneva, and that investors from the Middle East, the US and Asia had supported London’s prime segment.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19987757/main.jpg
    Colin Foreman
  • UAE vehicle manufacturing push moves into production

    25 September 2026

     

    Register for MEED’s 14-day trial access 

    Chinese-linked carmaker Rox has begun vehicle production at Khalifa Economic Zones Abu Dhabi (Kezad). The start-up represents the most significant output so far from the UAE’s efforts to build an automotive manufacturing industry.

    The first three Rox Adamas vehicles, carrying the Made in the Emirates mark, came off the production line at the company’s new Abu Dhabi facility in early September. The 10,000-square-metre plant is expected to reach an initial capacity of 20,000 vehicles a year by 2027, rising to 300,000 vehicles a year by 2030.

    The facility can sub-assemble more than 80 types of vehicle components and also carries out complete vehicle assembly, calibration, rain and road testing, and final inspection. Rox moved its global headquarters to the UAE last year and plans to supply local and export markets.

    The project forms part of Rox’s partnership with the Abu Dhabi Investment Office (Adio) and is supported by the UAE Ministry of Industry & Advanced Technology. Kezad Group signed the lease agreement for the facility in May.

    Programme targets

    The Rox plant is the first major output of a state-led strategy that has gathered pace over the past 18 months. Adio launched its automotive programme at the Make it in the Emirates forum in May 2025, with the aim of creating a hub for vehicle manufacturing and assembly, research and development, restoration, auctions and luxury cars.

    The programme is projected to contribute AED100bn ($27.2bn) to Abu Dhabi’s GDP by 2045, attract more than AED8bn ($2.2bn) in foreign direct investment and create 7,000 skilled jobs. Adio has also introduced an automotive artificial intelligence curriculum with universities to develop Emirati talent in the sector.

    In October last year, Adio and AD Ports Group agreed to work with Netherlands-based Stellantis to develop the emirate’s automotive ecosystem. The memorandum of understanding covers expansion into Middle East and Africa markets, an ecosystem for autonomous taxi services, and research into next-generation mobility technologies.

    Under the agreement, Stellantis will explore investment opportunities in Abu Dhabi, while Adio and AD Ports Group will provide market intelligence and logistics support. The announcements did not include a commitment to build a production facility.

    Kezad already hosts smaller electric vehicle (EV) operations. In 2024, UAE-headquartered NWTN signed a lease for a Kezad facility with capacity to assemble 5,000-10,000 semi-knocked-down EVs a year, with plans to expand to 50,000 units in a second phase.

    Trading hub

    Dubai has focused on vehicle trade rather than manufacturing. In November last year, Dubai Municipality signed a partnership agreement with DP World’s Economic Zones division to establish and manage the Dubai Auto Market, a 22 million-square-foot complex with more than 1,500 showrooms that is designed to handle over 800,000 new and used vehicles a year.

    Enabling works are under way, carried out by local contractor Rad International Road Construction, with US-based Aecom serving as project consultant. Sheikh Maktoum Bin Mohammed Bin Rashid Al-Maktoum, first deputy ruler of Dubai, said at the launch that the project would foster a cluster of light industries for vehicle assembly and trade.

    The market builds on an established base. Jebel Ali Free Zone hosts more than 940 automotive and spare-parts companies, including Ford, General Motors, Honda, Hyundai, Nissan and Volkswagen. In 2022, M Glory Group laid the foundation stone for a AED1.5bn ($408m) EV plant at Dubai Industrial City, with a planned capacity of 55,000 cars a year.

    Regional competition

    The UAE is not alone in pursuing automotive manufacturing. In Saudi Arabia, the Public Investment Fund (PIF) owns 70% of Hyundai Motor Manufacturing Middle East, which will roll out its first vehicle by Q4 2026 and targets annual production of 50,000 vehicles. Ceer, the kingdom’s first EV manufacturer, intends to roll its first vehicle off the production line in late 2026.

    Saudi Arabia’s National Industrial Strategy aims to attract three to four manufacturers capable of producing more than 300,000 vehicles a year within a single automotive cluster. In Qatar, JTA International Investment Holding said last month that it was working with the UK’s Watt Electric Vehicle Company to set up a factory.

    The two leading Gulf economies are taking different approaches. Saudi Arabia has relied on direct PIF shareholdings in manufacturers. In the UAE, investment offices, port groups and economic zone operators have led the effort, using land, logistics and incentives to attract privately owned carmakers.

    Scaling up is the next test. Rox’s plan to increase output fifteen-fold between 2027 and 2030 will show whether Abu Dhabi’s model can support volume manufacturing. Achieving it would give the UAE production capacity comparable to the level Saudi Arabia is targeting across its entire automotive cluster.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19986887/main.jpeg
    Colin Foreman
  • SAR prepares phosphate rail second section contract award

    25 September 2026

     

    Saudi Arabian Railways (SAR) is preparing to formally award another multibillion-riyal contract to double the tracks on the existing phosphate transport railway network connecting the Waad Al-Shamal mines to Ras Al-Khair in the kingdom’s Eastern Province.

    The contract covers construction works on the second section of the railway line, spanning more than 150 kilometres (km).

    The scope of work includes civil works, alignment modifications, track and loop construction, and associated infrastructure such as bridges and culverts, as well as enhancements to signalling and telecommunications systems.

    SAR floated the tender in February, and bids were submitted in April.

    SAR is making significant progress on its Phosphate 3 rail programme. Last month, MEED exclusively reported that SAR had awarded an estimated SR4bn-plus ($1.1bn) contract to add another track to the first section of the existing phosphate transport railway network.

    The contract was awarded to local firm Alomaier Trading & Contracting Company.

    The scope includes track doubling, alignment modifications, utility bridges, culvert widening and hydrological structures, as well as the conversion of the AZ1 siding into a mainline track. It also covers support works for signalling and telecommunications systems.

    The existing railway runs from the Waad Al-Shamal mines to Ras Al-Khair. The first-section works will cover about 100km, connecting the AZ1/Nariyah Yard to Ras Al-Khair.

    Switzerland-based engineering firm ARX is the project consultant.

    Formerly known as the North-South Railway, the North Train is a 1,550km freight line running from the phosphate and bauxite mines in the far north of the kingdom to the Al-Baithah junction. From there, it diverges into a line south to Riyadh and another line east to downstream fertiliser production and alumina refining facilities at Ras Al-Khair on the Gulf coast.

    Adding a second track and freight yards will significantly increase the network’s cargo-carrying capacity and support growth in industrial production. Project implementation is expected to take four years.

    State-owned SAR is also considering increasing the localisation of railway materials and equipment, including developing a cement sleeper manufacturing facility.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19983928/main.jpg
    Yasir Iqbal
  • Meraas awards $272m Nad Al-Sheba Gardens villas deal

    25 September 2026

    Dubai-based real estate developer Meraas Holding, part of Dubai Holding, has awarded a AED1bn ($272m) contract for the construction of the seventh phase of the Nad Al-Sheba Gardens community.

    The contract, which covers the delivery of 272 villas and townhouses, was awarded to local firm GCC Contracting.

    The scope of work includes 130 villas, 142 three-bedroom townhouses, and associated utilities and infrastructure.

    Construction has started, and the project is slated for completion in 2028.

    Last year, Meraas awarded a AED690m ($188m) contract for the construction of the fourth phase of the Nad Al-Sheba Gardens community in Dubai.

    Meraas awarded the contract to local firm Bhatia General Contracting.

    The scope of that contract covers the construction of 92 townhouses, 96 villas and two pool houses.

    In December last year, Meraas announced the eleventh and final phase of its Nad Al-Sheba Gardens residential community. This phase includes the development of 210 new villas and townhouses, as well as a school, located in the northwest corner of the development.

    According to UK analytics firm GlobalData, the UAE’s construction industry will register annual growth of 3.9% between 2025 and 2027, supported by investments in infrastructure, renewable energy, oil and gas, housing, industrial and tourism projects.

    The residential construction sector is expected to record an average annual growth rate of 2.7% between 2025 and 2028, supported by private investment in residential housing, along with government initiatives to meet rising demand.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19983032/main.png
    Yasir Iqbal
  • KBR opens new office in Libya

    25 September 2026

     

    US-based KBR has opened a local branch office in Libya as it seeks to expand operations in the country, according to industry sources.

    The local branch opening follows several significant contract wins in the country.

    In March, KBR announced that it had been awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the South Refinery Project in Libya’s southern city of Ubari.

    Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the engineering, procurement and construction (EPC) phases of the project, according to a company statement.

    The EPC work is expected to be executed over a 50-month period.

    In its statement, KBR said that the project was aligned with its “long-standing commitment to advancing vital oil and gas infrastructure in Libya”.

    KBR is currently re-evaluating the front-end engineering and design (feed) for the project to develop the J6 North Gialo field in Libya.

    In February this year, KBR officials said registration procedures to open a local branch were being finalised and that the company was seeking the necessary operating permits.

    KBR has previously provided engineering services for major national projects in Libya, but was forced to shut down its office in the country several times amid political instability and security issues.

    When the company was known as Brown & Root, it worked on the Great Man-Made River Project in Libya, which is widely recognised as the largest irrigation project in the world.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19981331/main.png
    Wil Crisp