Meed | Rethinking how Saudi projects are delivered

Rethinking how Saudi projects are delivered

25 January 2024

In early January, Italian contractor WeBuild secured a $4.7bn contract to construct the three dams that will create a lake at the centre of Saudi Arabia’s Trojena mountain resort in Neom.

Like most in the kingdom, the project is large in scale and technically challenging. It also has an aggressive delivery schedule as the lake – and the surrounding resort and ski slopes – must be ready for the Asian Winter Games in 2029.

The project will also have to be completed at the same time as the rest of the growing volume of construction work in the kingdom. According to regional projects tracker MEED Projects, there were close to $95bn of contract awards across all sectors in the kingdom in 2023 – an all-time record and significantly higher than the $59bn recorded the previous year.

For construction specifically, there were $23bn-worth of awards made in 2023, which is marginally less than the total for 2022. With this level of awards expected to be maintained or exceeded in 2024, the challenges facing the kingdom’s construction sector will be amplified this year.

New approach

The development firms that have been tasked with delivering Riyadh’s five official gigaprojects – and the raft of other large masterplanned projects – are rethinking how projects in the kingdom are delivered.

The first area of concern is procurement, and securing sufficient resources to complete projects.

In the case of the Trojena dams, this was done by engaging with a group of construction firms on an early contractor involvement (ECI) basis. Contractors took part in a two-stage tender, with bidders submitting preliminary prices and then working with the client to arrive at a final price for the project.

By working on the project at an early stage, contractors have a better understanding of the work involved and are more likely to bid.

Neom is not the only giga- project developer using this approach. Last year, Qiddiya Investment Company appointed UAE-based Alec to build the motorsports Speed Park at its entertainment city project on the outskirts of Riyadh.

Qiddiya is also engaging with contractors on an ECI basis for its Prince Mohammed bin Salman Stadium, which features a complex design that will be built on top of a 200-metre cliff.

Other steps that have been taken to make projects in Saudi Arabia more attractive include better payment terms and an overhaul of the use of performance guarantees.

Red Sea Global (RSG), which is developing the Red Sea Project and Amaala gigaprojects, no longer requires contractors to submit bid bonds and returns performance bonds on completion of the project, along with half of the retention.

By working on the project at an early stage, contractors have a better understanding of the work involved

Packaging projects

Projects are also being packaged differently. For the Trojena dams, the work was packaged as a large infrastructure project. This route also appears to be the favoured solution for other developers undertaking large-scale infrastructure projects.

For building work, there are several approaches. RSG created much noise in the market when it decided to adopt a construction management approach for its projects. This meant breaking the project down into a series of smaller packages, which are then managed by an in-house construction management team.

The aim of this approach is to give the developer more control over the project. It also helps to overcome some of the deficiencies of the market that have existed for main contractors in the kingdom for the past decade.

Other clients are taking a different approach. In recent months, clients such as Diriyah Company and Rua al-Madinah have tendered contracts for constructing superblocks, which include the construction of a district within a development that comprises several buildings. This approach aims to offer contracts to major local, regional and international construction firms with enough scale for them to invest in the project.

The superblock approach was used in previous eras of Saudi construction when major firms – led by Saudi Binladin Group and Saudi Oger – would regularly take on large work packages.

Phasing is another way that the pressure in the market can be alleviated. Last year, executives of Saudi development companies spoke privately about the need for project priorities to be set so that they can focus on specific objectives.

At the end of last year, that notion was given more weight when Finance Minister Mohammed al-Jadaan told reporters at the launch of the state budget that Saudi Arabia needs more time to deliver its projects.

“A longer period is needed to build factories, build even sufficient human resources. The delay or rather the extension of some projects will serve the economy,” he said, adding: “There are strategies that have been postponed and there are strategies that will be financed after 2030.”

As the minister did not give specifics, it is not clear which projects will be delayed and which will remain on their original schedule. That said, projects with event-driven deadlines – such as the 2027 Asian Cup, the 2029 Asian Winter Games, Expo 2030 and the 2034 World Cup – will have to be delivered on time.

This package also includes:

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Colin Foreman

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Jedco maps next phase of Jeddah airport expansion
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Oman tenders Thumrait Industrial City infrastructure
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Abu Dhabi expects 45% emissions cut as electricity demand rises
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Jedco maps next phase of Jeddah airport expansion
22 September 2026

Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Yasir Iqbal

Contractor wins $105m Medina university hospital deal

22 September 2026

Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

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

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> TUNNELS: The Gulf’s next construction boom is happening underground

To see previous issues of MEED Business Review, please click here

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Yasir Iqbal

Oman tenders Thumrait Industrial City infrastructure
22 September 2026

Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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Yasir Iqbal
Kuwait halves drilling contractor pool
22 September 2026
State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
- Burgan Company for Well Drilling, Trading & Maintenance (Kuwait)
- Kuwait Drilling Company (Kuwait)
- Sun Drilling Kuwait (Kuwait)
- TDL Kuwait for Oil Rigs & Natural Gas Extraction Activities, Services and Facilities (Kuwait)
- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
- Adnoc Drilling Company (UAE)
- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
- CNPC Bohai Drilling Engineering Company (China)
- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.