Meed | Saudi construction project ramp-up accelerates

Saudi construction project ramp-up accelerates

8 March 2023

Saudi Arabia’s construction projects market is charting an ever-more dynamic growth trajectory, underpinned by progress on the kingdom’s mega and gigaprojects.

The country was the GCC’s most active projects market for construction contractors for the third year running in 2022, with $32.4bn-worth of construction and transport contracts awards, according to MEED Projects.

It was also the third consecutive year of growth for Saudi construction contract awards, which rose by 58 per cent last year, up from $20.6bn in 2021. This, in turn, was up 38 per cent from the $14.8bn-worth of awards in 2020.

Construction sector awards accounted for 58 per cent of the total $55bn-worth of Saudi contract awards in 2022 across all sectors.

Gigaprojects drive

After the 2022 reveal of The Line, the 170-kilometre-long structure planned for the $500bn Neom project, February 2023 saw the kingdom launch New Murabba, a masterplan to create the world’s largest modern downtown in Riyadh.

As its centrepiece, the masterplan will feature a cubic skyscraper titled the Mukaab, a Najdi-inspired landmark that will be one of the biggest buildings in the world upon completion, at 400 metres high, 400 metres wide and 400 metres long.

The overall development will cover an area of 19 square kilometres, nearly five times the size of Dubai’s downtown, which spans two square kilometres and was built at an estimated cost of AED73bn ($20bn). While the total budget for the Riyadh scheme is not yet announced, its estimated cost could exceed $100bn.

Saudi Arabia's sovereign wealth vehicle, the Public Investment Fund (PIF), is also considering plans for a 2km megatower in Riyadh. The proposed tower would be more than double the height of the world’s tallest building – Dubai’s Burj Khalifa, which is 828 metres tall. Depending on the final design, contractors that have priced megatall towers in the region say a 2km-tall structure could cost about $5bn to construct.

New Murabba will be developed by the New Murabba Development Company, which is backed by the PIF. It could also be added to the official list of PIF gigaproject developments, alongside Neom, the Red Sea Project, Qiddiya, Roshn and Diriyah Gate.

According to MEED’s Saudi Gigaprojects report, the kingdom's gigaprojects could award up to $569bn-worth of contracts from 2021 through 2025, financing and contracting capacity permitting.

However, even a fraction of such a total would be a step change for the regional projects market, which saw $172bn-worth of work awarded from 2016 to 2021.

Saudi Arabia’s contract awards in the last quarter of 2022 were dominated by Neom’s infrastructure and earthworks packages. Five of the top 10 largest construction awards in 2022 and 2023 so far have been for Neom projects.

Other dynamic projects include the $30bn King Salman International airport; the $15bn Al-Ula development; the Royal Commission for Riyadh City's $23bn King Salman International Park, Green Riyadh and Sports Boulevard projects; Saudi Entertainment Ventures' (Seven) $5bn entertainment complexes; the $3bn Asir project; and Neom's $2bn Trojena lake project known as ‘The Vault’.

Urban regeneration

Alongside the redevelopment of Riyadh, the kingdom is also pursuing a much broader series of regeneration schemes across its major cities as part of Saudi Vision 2030.

In February, the country kicked off a major Jeddah waterfront project, part of a 15-year Historic Jeddah Revitalisation programme. The same month, US-headquartered Parsons was awarded a $15m contract to provide construction project management consultancy and contract administration services (PMCM) for the Rua al-Madinah project in Medina city.

The Rua al-Madinah project represents the first phase of the Madinah Central Area development and is projected to add $37bn to Saudi’s GDP and create 93,000 jobs. Rua al-Madinah Holding Company, another PIF subsidiary, is developing the scheme.

Last October, PIF invited firms, through its Saudi Downtown Company (SDC), to submit bids for contracts to provide project management services for 12 $500m urban downtown redevelopment schemes in cities across the kingdom.

Prospects for 2023

With more than $120bn-worth of projects in the pipeline for 2023, the outlook remains strong for the construction and transport sectors. Alongside Saudi Arabia’s masterplans, there are also a variety of public transport projects, logistics platforms and railways in the procurement process as part of the kingdom’s National Transport and Logistics Strategy.

The planned rise in government capital expenditure to SR1,114bn in 2023, up from SR955bn in 2022, supports the ramp-up in project activity.

The Ministry of Finance’s key 2023 budget spending objectives in construction include building affordable housing for 120,000 families, developing nearly 1 million sq m of parks, and building 176 ready-made industrial units together with the infrastructure for a further 56 million sq m of industrial plots. The affordable housing plans are part of a Ministry of Housing Sakani programme to raise the home-ownership ratio to 70 per cent by 2030.

The Saudi budget also affirmed that by 2025, PIF plans to invest SR1tn in new projects.

Amid subdued activity in neighbouring countries, Saudi Arabia has become the prevailing focus for GCC contractors, with local and international contractors pivoting towards the kingdom and away from Qatar and the UAE.

“We are focusing on projects in Saudi Arabia. The job is there, not elsewhere anymore,” says a contracting source from a UAE national company.

Locally, the build-up of construction activity will be spearheaded by the creation of national champions in the contracting sector, with PIF investing $1.3bn in four local construction companies: Al-Bawani Holding Company, Almabani General Contractors Company, El-Seif Engineering Contracting Company and Nesma & Partners Contracting Company.

Image: Red Sea Global signs hotel management agreement with Fairmont to operate resort in first phase of development at the Red Sea Project

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Eva Levesque

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Jedco maps next phase of Jeddah airport expansion
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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.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

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

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> 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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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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Kuwait halves drilling contractor pool
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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.