meed-logo

line1 line2 line3
SIGN IN / REGISTER

Saudi Arabia plans $1 trillion capital

26 July 2023

 

Register for MEED's guest programme 

In late June, a Saudi delegation led by Crown Prince Mohammed bin Salman visited Paris to present Riyadh’s bid for hosting Expo 2030 to the Bureau International des Expositions.

The reveal of the masterplan for the $7.8bn Expo site is the latest move by Riyadh to make the Saudi capital one of the world’s top 10 cities with a population of 15-20 million. 

Prince Mohammed set out the objectives in January 2021. “Our target is to have Riyadh become one of the top 10 largest city economies in the world.

“Today it is ranked among the top 40 largest city economies worldwide. Our target is to increase its population from 7.5 million to around 15-20 million in 2030,” he said in a broadcast interview with former Italian Prime Minister Matteo Renzi. 

Prince Mohammed explained the rationale for doubling the size of Riyadh. “There is no doubt that the world economies are not only based on countries but rather cities. Eighty-five per cent of the world economy comes from cities, and in the next few years, this number will increase to 95 per cent.” 

Riyadh’s assets

Developing Riyadh will build on its existing strengths. “Riyadh has very special features. Today Riyadh represents about 50 per cent of the non-oil economy in the Kingdom of Saudi Arabia,” said Prince Mohammed. 

“The cost of job creation is 30 per cent less than in other cities in Saudi Arabia. The cost of infrastructure and real estate development is 29 per cent less.”

Heading off any questions about Riyadh’s ability to deliver such ambitious plans, Prince Mohammed referred to the city’s historical growth.

“The infrastructure is already quite outstanding because of the work done by King Salman over a period of more than 58 years, during which he managed to grow a city of 150,000 residents into a metropolis of 7.5 million people,” he said. 

Turning these plans into reality will require massive investment. Speaking at the Expo presentation in June, Minister of Investment Khalid al-Falih revealed that $1tn of investment is planned for the Saudi capital. He said Saudi Vision 2030 targets national-level investments of over $3.3tn by the end of the decade, with at least 30 per cent allocated to the city of Riyadh. 

Construction boom

Riyadh is already experiencing an uptick in construction activity, according to data from regional projects tracker MEED Projects. Since bottoming out in 2017 during the austerity-driven years following the 2014 collapse in oil prices, the annual total of contract awards has been steadily climbing.

In 2022, there were $12.2bn in contract awards, the highest on record since 2013, when there were $32bn of awards. The total in 2013 was boosted by the $23bn of contract awards signed in one day for the Riyadh metro. Without those awards, 2022 would be Riyadh’s best year for project activity.

There were $12.2bn of awards in 2022, the highest since 2013

More awards are expected. There are nearly $9bn of contracts at the bid evaluation stage, which, if awarded this year, will push the annual total to over $20bn. Looking further ahead, there are another $9bn of contracts at the bidding stage and $6bn at prequalification. There are $110bn in design and $60bn under study. 

The future pipeline includes some of the most ambitious projects to be launched in Saudi Arabia over the past year.

In February, New Murabba Development Company was launched to develop the world’s largest modern downtown on 19 square kilometres of land at the intersection of King Salman and King Khalid roads to the northwest of the city. The project includes the cube-shaped Mukaab building, which will be 400 metres high, 400 metres wide and 400 metres long.

Contractors win New Murabba early works deals

In November last year, King Salman International airport was launched. If completed on time in 2030, it will become the world’s largest airport in terms of passenger capacity, accommodating up to 120 million passengers by 2030 and 185 million by 2050. It will cover an area of about 57 square kilometres, allowing for six parallel runways.

There are also projects that have not yet been announced. The Public Investment Fund is understood to be close to appointing an architect for a 2-kilometre-tall tower in the north of the city. Once the project is completed, it will be more than double the height of the world’s tallest building: Dubai’s 828-metre-tall Burj Khalifa.

Another major building programme could emerge if Riyadh succeeds in its bid to host football’s Fifa World Cup in 2030 with Egypt and Greece. 

These projects will join others that have moved into construction over the past few years, such as Diriyah Gate, King Salman Park, Sports Boulevard, Roshn’s Sedra and Warefa developments, Saudi Entertainment Ventures’ Exit 10 and Exit 15 projects and Qiddiya entertainment city. 

As the project workload builds, the race to deliver has started. Competition for resources has risen, putting upward pressure on prices. In its latest global construction costs report, UK consultant Turner & Townsend said the Riyadh market is already overheating and will warm further in the future. 

With so much activity pinned on Vision 2030 and possibly Expo 2030 and the 2030 World Cup, there are questions about what comes next. Unlike Doha after the 2022 World Cup, and to a lesser extent Dubai Expo, there are more major events coming to Riyadh, including the 2034 Asian Games, which it secured in December 2020.

Main image credit: Riyadh Expo 2030

https://image.digitalinsightresearch.in/uploads/NewsArticle/11030775/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 awards $272m Al-Maktoum airport runway deal

    9 May 2025

     

    Dubai Aviation Engineering Projects (DAEP) has awarded a AED1bn ($272m) deal to local firm Binladin Contracting Group to construct the second runway as part of the expansion of Dubai’s Al-Maktoum International airport.

    MEED understands that the contract was finalised in Q1 of this year, and the construction works have started.

    The airport, which will cover an area of 70 square kilometres south of Dubai, will have five parallel runways, five terminal buildings and 400 aircraft gates.

    It will be five times the size of the existing Dubai International airport and have the world’s largest passenger handling capacity of 260 million passengers a year. For cargo, it will have the capacity to handle 12 million tonnes a year.

    The construction works on the first phase of the project are expected to be completed by 2032.

    Dubai approved the updated designs and timelines for its largest construction project in April last year.

    The government of Dubai said that the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International airport within 10 years.

    The government statement added that the project will create housing demand for 1 million people around the airport.

    In September last year, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead master planning and design consultants on the expansion of Dubai’s Al-Maktoum International airport.

    Project history

    The expansion of Al-Maktoum International airport is a long-standing project. Also known as Dubai World Central (DWC), it was officially launched in 2014 with a different design from the one approved in April 2024. Back then, it involved building the biggest airport in the world by 2050, with the capacity to handle 255 million passengers a year.

    An initial phase, due to be completed in 2030, involved increasing the airport’s capacity to 130 million passengers a year. The development was to cover an area of 56 square kilometres.

    Progress on the project slipped as the region grappled with the impact of lower oil prices and Dubai focused on developing the Expo 2020 site. Tendering for work on the project then stalled with the onset of the Covid-19 pandemic in early 2020.

    MEED’s May 2025 report on the UAE includes:

    > COMMENT: UAE is poised to weather the storm
    > GOVERNMENT & ECONOMY: UAE looks to economic longevity
    > BANKING: UAE banks dig in for new era
    > UPSTREAM: Adnoc in cruise control with oil and gas targets
    > DOWNSTREAM: Abu Dhabi chemicals sector sees relentless growth
    > POWER: AI accelerates UAE power generation projects sector
    > CONSTRUCTION: Dubai construction continues to lead region
    > TRANSPORT: UAE accelerates its $60bn transport push
    > DATABANK: UAE growth prospects head north

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13847301/main.jpg
    Yasir Iqbal
  • Siemens Energy signs preliminary 14GW Iraq pact

    9 May 2025

    Register for MEED’s 14-day trial access 

    Germany’s Siemens Energy and Iraq’s Electricity Ministry have signed a preliminary agreement to add 14GW of electricity generation capacity to Iraq’s grid.

    The firms also signed two long-term service contracts for the Dibis and Al-Mussaib gas-fired power plants.

    The contract for the Dibis power plant covers two generating units with a combined capacity of 340MW.

    The five-year maintenance contract for the Al-Mussaib power station includes rehabilitating units with a capacity of 750MW and an additional 150MW, along with support for safe operations and performance optimisation.

    The announcement was made following a meeting between Siemens Energy CEO Christian Bruch and Iraqi Prime Minister Mohammed Al-Sudani, local media reported. 

    The deals were signed a few weeks after US-headquartered GE Vernova signed a memorandum of understanding (MoU) with the Iraqi government to establish 24GW of combined-cycle gas turbine (CCGT) power plants in the country.

    In late April, Iraq and Siemens Energy also announced breaking ground on a project to build a new CCGT power generation plant in Nasiriyah in Iraq’s southern Dhi Qar governorate.   

    The project is part of a $1.68bn development package that Al-Sudani recently launched.

    In addition to the CCGT plant, the other projects include the Nasiriyah Integrated Medical City, a 700-bed hospital complex and infrastructure works in the Suq Al-Shuyukh district.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13847219/main.jpg
    Jennifer Aguinaldo
  • Abu Dhabi hopes bigger is better with Disney theme park

    8 May 2025

    Commentary
    Colin Foreman
    Editor

    Ever since Aldar Properties first launched the Yas Island project with its Yas Marina Circuit for the Abu Dhabi Grand Prix in 2006, Abu Dhabi has been steadily adding theme parks to the island’s roster of attractions. First, there was the Ferrari theme park, then came a water park, a Warner Bros theme park and, most recently, SeaWorld. 

    The theory with theme park development is bigger is better. 

    A destination needs a series of parks to create a critical mass to attract visitors who can stay and enjoy multiple parks in one visit. The example always cited is Florida, which is home to many of the world’s largest theme parks, including Disney World. 

    The theory gained particular traction in the region when Dubai Parks and Resorts opened. The company, which was public until it was acquired by Meraas in 2021, reported significant losses as it struggled to attract enough visitors.

    Although it opened with Legoland, Legoland Waterpark, Motiongate and Bollywood theme parks, insiders said that the problem with the development was that it did not have enough attractions to turn it into a successful theme park destination. 

    The financial performance of theme parks on Yas Island has not been publicly disclosed. While it is accepted that they have been more successful than their counterparts in Dubai, some say that the island still does not have the critical mass required to establish itself as a global destination for theme park visitors.


    Miral has developed a series of theme parks and other entertainment-related attractions on Yas Island 

    Enter Disney

    Disney changes that. It is the largest brand in the theme park space and will be a major attraction, but with limited information released on the project so far, it is difficult to fully gauge how significant the project will be. 

    The official release said that the project will be developed and operated by Abu Dhabi developer Miral, adding that Disney’s in-house design and engineering unit, Walt Disney Imagineering, will lead creative design and operational oversight to provide a world-class experience. It did not give any details on the ownership of the project. 

    In Hong Kong, for example, a company, Hong Kong International Theme Parks, was established as a joint venture, with the Government of Hong Kong holding 57% and The Walt Disney Company holding 43%. 

    In Japan, the structure is different. The Tokyo Disney Resort is owned and operated by Oriental Land, and the company pays licences and royalties to The Walt Disney Company.

    In interviews following the launch announcement, Miral CEO Mohamed Abdalla Al-Zaabi confirmed the arrangement will be like Tokyo. 

    Waterfront location

    The official release for the Abu Dhabi launch also said that the project is on Yas Island, which only has limited areas of land to develop. The release also said that the land is waterfront, and imagery in the launch video shows the Abu Dhabi skyline in the background, suggesting the land is on the northern waterfront of Yas Island. 

    There is a substantial tract of undeveloped land on the north shore of the island, which measures about 2 square kilometres (sq km). This is larger than the site that Hong Kong Disneyland occupies, and much smaller than Disney World in Florida, which spans an area of 111 sq km – nearly five times the size of the whole of Yas Island and nearly double the size of Abu Dhabi Island.

    The hope is that Yas Island will become a leading global theme park destination and attract large numbers of visitors wanting a holiday with multiple theme park visits

    Exclusivity clause

    Another area of interest will be whether Abu Dhabi has an exclusivity agreement with Disney for the region. No exclusivity was mentioned at the launch, but in Hong Kong, the issue became contentious when Disney announced plans to build a park shortly after Disneyland Hong Kong opened. Local politicians criticised the Hong Kong government for not including an exclusivity clause in its deal with Disney. 

    Tourism gateway

    Like Hong Kong, Abu Dhabi is a smaller economy sitting next to a larger regional player. With Saudi Arabia’s ambitious Vision 2030 strategy and its existing roster of theme park developments at Qiddiya, which includes a Six Flags, a water park and a Dragon Ball Z theme park, developers in Riyadh would likely be keen to have a Disney theme park, too. 

    For now, with Disney on board in Abu Dhabi, the hope is that Yas Island will become a leading global theme park destination and attract large numbers of visitors wanting a holiday with multiple theme park visits.

    The potential is certainly there. During the project launch, Disney highlighted 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 the largest global airline hub in the world, with 120 million passengers travelling through Abu Dhabi and Dubai each year.

    If that potential is realised, then the bigger is better theory will be proved right. If the park’s performance disappoints, then it will suggest the region is not such a great destination for theme parks after all. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13840555/main.gif
    Colin Foreman
  • Firms bag $850m Qatar substation contracts

    8 May 2025

    Four local and international firms have won contracts for the construction of seven high-voltage substations in Qatar.

    State-backed Qatar General Electricity & Water Corporation (Kahramaa) signed the contracts, which have a total combined value of approximately QR3.1bn ($850m), with the following firms:

    • Elsewedy Cables Qatar Company (local/Egypt)
    • Voltage Engineering (local)
    • Best/Betas Consortium (Turkey)
    • Taihan Cable & Solution (South Korea)

    Kahramaa said the projects aim to “meet electrical network demand in light of the country's fast-growing …urban development”.

    The contracts include the provision and installation of underground cables and overhead lines extending around 212 kilometres to connect these substations.

    Qatari companies won the largest share, equivalent to 58.4% or QR1.8bn, of the total contract value.

    This reflects “our great confidence in the capabilities of the local private sector and its pivotal role in achieving our development vision and achieving Qatar National Vision 2030”, said Kahramaa president Abdulla Bin Ali Al-Theyab.

    Qatar Minister of State for Energy Affairs, Saad Sherida Al-Kaabi, and senior executives from Kahramaa and the contracting firms signed the deals at a ceremony held in Doha.

    Al-Kaabi said the projects will help “ensure our networks' continued and sustainable ability to accommodate the unprecedented growth of the power sector and meet the increasing electricity demand”.

    Kahramaa said the contractors will undertake the construction of electrical substations and the connection of cables and overhead lines, as well as the development of some existing substations to increase their capacity.

    Qatar has been ramping up its power generation capacity in recent years.  

    Qatar's Emir, Sheikh Tamim Bin Hamad Al-Thani, inaugurated the Ras Laffan and Mesaieed solar photovoltaic (PV) power plants on 28 April.

    The two plants have a combined capacity of 875MW and will more than double Qatar’s solar energy production to 1,675MW.

    In February, Qatar Electricity & Water Company (QEWC) and Kahramaa signed a power-purchase agreement for a 511MW peak electricity generation plant at Ras Abu Fontas, which will have a total cost of approximately QR1.6bn. The peak power plant is scheduled to become operational by January 2027.

    A consortium led by South Korea's Doosan Enerbility, and that includes Beijing-headquartered PowerChina, will undertake the Ras Abu Fontas peak power plant's engineering, procurement and construction contract, with Germany's Siemens Energy supplying the plant's gas turbines.

    Photo credit: Kahramaa

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13838850/main.jpg
    Jennifer Aguinaldo
  • OQ to take interest in Oman renewable projects

    8 May 2025

    OQ Alternative Energy (OQAE), part of Oman’s state-backed energy group OQ, will be taking shares in Oman’s renewable energy independent power projects (IPP), starting with the Ibri 3 solar scheme.

    “The direction seems to be for OQ Alternative Energy to own up to 25% shares in the upcoming solar and wind IPP projects in the sultanate,” says a source familiar with the plans.

    Before this development, private developers and investors owned the total shares in such projects, similar to the existing structure in Saudi Arabia.

    With this policy change, Oman will now be more closely aligned with the existing project structure in the UAE, where either Abu Dhabi National Energy Company (Taqa), Abu Dhabi Future Energy Company (Masdar) or the state utility, Dubai Electricity & Water Authority (Dewa), owns stakes in these projects.

    However, OQAE’s planned 25% ownership share will be slightly lower than the typical 40% to 60% shares that Taqa, Masdar or Dewa owns in the UAE’s renewable energy IPP projects.

    Currently, OQAE owns a 51% share in three renewable energy projects being developed in partnership with France’s TotalEnergies for the state-backed firm, Petroleum Development Oman (PDO).

    The Riyah-1 and Riyah-2 wind power plants will be located in the Amin and West Nimr fields in southern Oman, while the North Solar project will be situated in northern Oman.

    Each plant will have a capacity of 100MW, Total Energies announced in December.

    PDO will purchase the electricity from the plants through long-term power-purchase agreements with the developer team, whose 49% shares are owned by TotalEnergies.

    OQAE is also part of Hyport Coordination Company, a consortium comprising Belgium’s Deme Concessions and BP Oman. The consortium plans to develop a green hydrogen project in Duqm that can produce more than 50 tonnes a year of green hydrogen in its first phase by 2029.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13838800/main.jpg
    Jennifer Aguinaldo