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.”
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
Turkish Airlines plans further growth1 July 2025
-
-
-
Levant states wrestle regional pressures1 July 2025
-
Jordan’s economy holds pace, for now1 July 2025
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Turkish Airlines plans further growth
1 July 2025
This package on UAE-Turkiye relations also includes:> UAE-Turkiye trade gains momentum
> Turkiye’s Kalyon goes global
> UAE-Turkiye financial links strengthen
With a network covering 30 more countries than its closest competitor, Turkish Airlines has been recognised by Guinness World Records for the most countries flown to by an airline since 2012. “Over the past two decades, Turkish Airlines has experienced rapid expansion, becoming one of the world’s most recognised airlines and the largest carrier in terms of destinations served,” says Erol Senol, vice-president of sales at Turkish Airlines.
The airline’s growth has meant it has become a competitor for the major Gulf carriers such as Emirates, Qatar Airways and Etihad. Senol says the growing aviation market offers opportunities for all carriers.
“The global centre of aviation is moving from the west to the east,” he says.
“This change is advantageous for all regions and carriers, provided there is the commitment to serve more effectively.”
Extending reachLike the airlines in the Gulf, Turkish Airlines is based in a strategically important geographic location. “Istanbul is within a three-hour flight distance to 78 cities in 41 countries, making it a central hub for connections between Europe, Asia and Africa,” says Senol.
Since 2019, the airline has also been based at one of the world’s largest airports, Istanbul Grand airport (IGA), which has enabled it to continue growing.
“The transition to Istanbul Grand airport has marked a new era for Turkish Airlines, enabling the company to sustain its ambitious growth trajectory,” says Senol.
“Approximately 80% of its capacity is dedicated to Turkish Airlines, offering the airline the operational flexibility and technological support required to manage large-scale passenger and cargo flows.”
The congestion and capacity limitations that previously constrained operations at Ataturk airport were effectively resolved through this relocation.
“Aircraft movement capacity increased from 70 per hour at Ataturk to 80 at the initial stage of Istanbul airport, eventually reaching 120 movements an hour with the commissioning of the third runway. This has significantly reduced aircraft waiting times from 5% to below 1%, improving both punctuality and fuel efficiency,” he adds.
IGA’s larger footprint, which Senol says is “seven times larger than Ataturk airport” has also enhanced passenger services and facilities, helping to improve customer satisfaction and streamline operations.
Turkish Airlines has also increased its annual cargo handling capacity from 1.2 million tons at Ataturk to 2.5 million tonnes at IGA, with projections of reaching 5-6 million tonnes as the airport develops further. “Turkish Airlines has advanced from ninth place in 2018 to third place in 2025 in global air cargo traffic rankings,” says Senol.
Supporting the cargo business is Turkish Cargo’s airport facility, SmartIST, which began operations in February 2022. In 2024, cargo volumes at SmartIST increased by 20% compared to 2023, reaching 1.99 million tonnes. Based on freight tonne kilometres, Turkish Cargo says its market share has reached 5.7%, ranking it third globally. Market share rose to 5.8% in the first quarter of 2025.
A second phase of expansion will further enhance Turkish Cargo’s operations capacity, allowing it to handle up to 4.5 million tonnes annually. The long-term target is to reach 3.9 million tonnes of cargo by 2033.
The relocation of Turkish Airlines’ operations to IGA presented many challenges.
“The relocation project involved extensive pre-planning and meticulous attention to detail,” says Senol.
One of the key challenges was maintaining uninterrupted flight operations during the transition. With real-time monitoring and contingency planning, Turkish Airlines completed the transfer within 33 hours.
The transition to Istanbul Grand airport has marked a new era for Turkish Airlines, enabling the company to sustain its ambitious growth trajectory
Erol Senol, Turkish AirlinesFuture growth
With major airport projects planned at other hubs, Senol offers some advice on how to ensure a seamless transition of operations. “Airlines should invest in full-scale simulations and contingency rehearsals well before the actual move, including load testing IT systems, coordinating logistics and stress-testing operational workflows,” he says.
“Success hinges on strong coordination across departments – operations, IT, cargo, ground services, human resources, safety and more. Turkish Airlines created interdisciplinary task forces and embedded decisionmakers in each operational unit to allow for real-time problem solving during the transition.
“A relocation isn’t just physical – it’s digital,” he notes. “Turkish Airlines used the move to accelerate digital transformation: implementing contactless systems, integrating cargo automation and upgrading passenger services. Airlines should use relocation as a catalyst to modernise infrastructure and adopt scalable technologies.”
Another factor is having room to grow. “Airlines should ensure their new base is not just sufficient, but expandable,” Senol adds.
By 2033, Turkish Airlines aims to serve 171 million passengers across 400 destinations with a fleet of 813 aircraft. “Our strategic plan is built on an annual average growth rate of 7.6%,” he says.
Turkish Airlines currently operates 481 aircraft, comprising 134 wide-body and 347 narrow-body planes. The airline has also placed orders for 355 new Airbus aircraft – 250 A321 Neos and 105 A350s – to support its growth strategy.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14178357/main.gif -
Qatar records largest local-currency bank bond issuance
1 July 2025
Register for MEED’s 14-day trial access
Qatar-based Commercial Bank has completed a QR500m ($137m) senior unsecured bond sale, marking the largest local-currency issuance by a Qatari bank to date.
The three-year bonds, priced with a 4.9% coupon, were issued under the bank’s Euro Medium Term Note (EMTN) programme. The notes are listed on Euronext Dublin. DBS Bank and Standard Chartered acted as joint lead managers.
The deal attracted strong demand from both regional and international investors, as lenders across the Gulf continue to diversify their funding bases amid high interest rates, Commercial Bank said in a statement.
The issuance comes as Qatar’s domestic debt market gains momentum, with banks seeking to tap liquidity in both riyal and hard currency formats.
Commercial Bank is rated A2 by Moody’s, A– by S&P, and A by Fitch, all with stable outlooks. The lender reported a net profit before tax of QR704.3m for Q1 2025, down from QR801.6m in the same period last year.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14177167/main3557.jpg -
New Murabba signs MoU for project delivery solutions
1 July 2025
Saudi Arabia’s New Murabba Development Company (NMDC) has signed a memorandum of understanding (MoU) with South Korea’s Naver Cloud Corporation to explore technological solutions for delivering its 14 square-kilometre (sq km) New Murabba downtown project.
New Murabba CEO Michael Dyke signed the agreement earlier this week during the company’s Investment and Partnership Forum in Seoul.
According to an official statement: “The three-year agreement covers exploring innovative technology and automation to support the delivery of New Murabba, including robotics, autonomous vehicles, a smart city platform and digital solutions for monitoring construction progress.”
NMDC is in Seoul to examine technological offerings, assess financing options and showcase the investment opportunities available for the New Murabba downtown development.
The statement added that the excavation works for The Mukaab, the centrepiece of the overall development, have now been completed.
The Mukaab is a Najdi-inspired landmark that will be one of the largest buildings in the world. It will be 400 metres high, 400 metres wide and 400 metres long. Internally, it will have a tower on top of a spiral base and a structure featuring 2 million square metres (sq m) of floor space designated for hospitality. It will feature commercial spaces, cultural and tourist attractions, residential and hotel units, as well as recreational facilities.
Downtown destination
The New Murabba destination will have a total floor area of more than 25 million sq m and feature more than 104,000 residential units, 9,000 hotel rooms and over 980,000 sq m of retail space.
The scheme will include 1.4 million sq m of office space, 620,000 sq m of leisure facilities and 1.8 million sq m of space dedicated to community facilities.
The project will be developed around the concept of sustainability and will include green spaces and walking and cycling paths to promote active lifestyles and community activities.
The living, working and entertainment facilities will be developed within a 15-minute walking radius. The area will use an internal transport system and will be about a 20-minute drive from the airport.
The downtown area will feature a museum, a technology and design university, an immersive, multipurpose theatre, and more than 80 entertainment and cultural venues.
https://image.digitalinsightresearch.in/uploads/NewsArticle/14177612/main.jpg -
Levant states wrestle regional pressures
1 July 2025
Commentary
John Bambridge
Analysis editorThe Levant countries of Jordan, Lebanon and Syria are all in various degrees of distress, and collectively represent the Israel-Palestine-adjacent geography most severely impacted by that conflict, including in the latest phase initiated by Israel’s attack on Iran. In all three cases, however, recent developments have provided tentative hope for the improvement of their political and economic situations in 2025.
In the case of Lebanon, still reeling from Israel’s invasion and occupation of the country’s southern territories in retaliation for Hezbollah’s missile attacks on northern Israeli cities, the hope has come in the form of the country’s first elected president since 2022, and a new prime minister.
The task before both leaders is to stabilise a deeply fragile political and economic situation while avoiding further degradation to Lebanon’s weakened state capacity. If the country can ride through present circumstances to the upcoming parliamentary elections in May 2026, the possibility could also emerge for a more comprehensive shake-up of its stagnant politics.
In civil war-wracked Syria, the toppling of the Bashar Al-Assad government in December and the swift takeover by forces loyal to Ahmed Al-Sharaa have heralded a political transition – even if it is not the secular one that Syria’s population might have once hoped for.
The new president has already made progress in reaching agreements for the rollback of EU and US sanctions and an influx of foreign investment that his predecessor could only have dreamt of securing. This opens the door to a future of economic recovery for the country.
The reopening and reconstruction of the Syrian economy also has the potential to benefit the entire region, by rebooting trade and providing growth opportunities.
For Jordan, the recent conflict in Israel and the occupied Palestinian territories has hit tourism hard, while also pitching the country’s anti-Israel street against its US-allied government. Washington’s threats to cut aid and to raise tariffs on Jordan have added to the political strain on the country, and this has only been staved off by in-person overtures by King Abdullah II to the US government.
The outbreak of hostilities between Israel and Iran has only worsened the economic climate for Jordan, with both Israeli jets and Iranian munitions frequenting Jordanian airspace and providing a constant reminder of how close the country is to being dragged into regional unrest. Yet Jordan has avoided conflict to date, and the country’s GDP growth is expected to rise modestly in 2025 as an increase in exports and projects activity stimulates the economy, despite the wider regional headwinds.
The overall picture for this region is therefore one of tentative recovery from recent shocks, ripe with potential for a better path forward as the Levant rebuilds and works together to overcome the challenges that have so long afflicted the region.
MEED’s July 2025 report on the Levant includes:
> COMMENT: Levant states wrestle regional pressures
JORDAN
> ECONOMY: Jordan economy nears inflection point
> GAS: Jordan pushes ahead with gas plans
> POWER & WATER: Record-breaking year for Jordan’s water sector
> CONSTRUCTION: PPP schemes to drive Jordan construction
> DATABANK: Jordan’s economy holds pace, for nowLEBANON
> ECONOMY: Lebanon’s outlook remains fraughtSYRIA
> RECONSTRUCTION: Who will fund Syria’s $1tn rebuild?To see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14122966/main.gif -
Jordan’s economy holds pace, for now
1 July 2025
MEED’s July 2025 report on the Levant includes:
> COMMENT: Levant states wrestle regional pressures
JORDAN
> ECONOMY: Jordan economy nears inflection point
> GAS: Jordan pushes ahead with gas plans
> POWER & WATER: Record-breaking year for Jordan’s water sector
> CONSTRUCTION: PPP schemes to drive Jordan construction
> DATABANK: Jordan’s economy holds pace, for nowLEBANON
> ECONOMY: Lebanon’s outlook remains fraughtSYRIA
> RECONSTRUCTION: Who will fund Syria’s $1tn rebuild?To see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14177596/main.gif