Saudi demand-supply imbalance needs action
26 January 2024
Some $879bn-worth of giga projects are planned in Saudi Arabia, of which about $50bn has been awarded to date, according to regional projects tracker MEED Projects.
The data shows that 2023 was a record year for projects in Saudi Arabia.
However, the extensive scope of work associated with these projects has exposed the challenges of scaling up the local construction supply chain fast enough to meet the surge in demand.
With projects launching in quick succession, suppliers, contractors and subcontractors are struggling to keep up with the influx of new work into the market.
Riad Bsaibes, president and CEO of Amana Investments, says this shortage of resources is a critical issue, stating, “There is currently a bottleneck in the entire supply chain, from human capital and materials to subcontractors and general contractors.”
Moreover, the construction sector faces significant execution risks.
While some projects are subject to delays, efforts to accelerate others are exerting pressure on timelines and budgets.
Highlighting the disparity, Bsaibes notes, “This mismatch is leading to delays as schedules stretch out and costs rise above original tender amounts. This creates risks for contractors if they cannot deliver projects on schedule or within the costs estimated during the tendering process.”
Career investment
The launch of Saudi Arabia's Vision 2030 has spurred an era of growth and investment. The surge in construction projects aligns with the kingdom's goals, positively impacting employment opportunities.
Yet recruiting top local and expatriate talent across large-scale projects is becoming a challenge in Saudi Arabia, according to Bsaibes.
He acknowledges that attracting and retaining skilled workers is getting more difficult with time, stating: “This is particularly challenging due to the scale of expansion, coupled with the pressure of Saudi Arabia’s nationalisation policies that encourage contractors to recruit qualified Saudi nationals.”
As well as focusing on hiring practices, companies must also commit to nurturing and enhancing skills over time.
Continuous upskilling is crucial in the construction industry, where new technologies, techniques and regulations frequently emerge, requiring employees to adapt and stay relevant.
Bsaibes advocates a strategic approach to talent management that involves upskilling the existing workforce before hiring new talent.
He recommends a hands-on approach to learning and improving skills.
“A core part of skills development at Amana includes on-the-job training for all employees,” he adds.
“Skills development must extend to developing competency in cutting-edge technologies such as building information modelling (BIM), modular construction and other digital tools. This long-term effort should be a key priority for firms.
“Continuous learning and development are very important throughout an employee’s career, starting from their initial entry into the construction workforce.”
Bsaibes further highlights the significance of internships in providing candidates with practical experience before taking on permanent positions.
This approach aims to facilitate a smoother onboarding process for individuals entering the workforce, ensuring they are well-prepared for new roles.
“Companies should invest in the professional development of their employees,” he says. “This could include training programmes, workshops and educational initiatives aimed at enhancing the skills, knowledge and capabilities of the workforce.”
Credit challenge
Access to credit is another major issue in the construction sector. A strong financial profile enhances borrowing capacity and facilitates the smooth execution of projects by ensuring a steady flow of financial resources.
Addressing credit concerns is, therefore, essential for construction firms.
Bsaibes recommends adhering to a strategic financial approach, opting to retain significant cash reserves instead of incurring debt.
“This approach not only facilitates self-financing for projects when necessary, but also serves as collateral for the letters of guarantee frequently demanded in construction contracts.
“Moreover, it provides the company with the flexibility to navigate through any payment delays without succumbing to financial distress.
“Amana has a strong balance sheet and well-established banking relationships,” he adds. “Banks view Amana as low risk due to its solid cash reserves and strong track record of on-time payments across different regions/currencies.”
In contrast, Bsaibes points out that many other contractors struggle due to insufficient cash flow management and weaker balance sheets.
“Maintaining high cash levels on its balance sheet is a fundamental goal for Amana.”
Strong working capital allows the contractor to be selective in bidding for projects, avoiding low-margin work while still securing sizable contracts.
“Additionally, we have a positive history with lenders, which allows Amana to support its operations and capitalise on growth opportunities.”
Incentivising growth
Clearly, there is a need for industry-wide improvements.
Bsaibes says the most impactful change would be longer-term transparency across developers’ project pipelines.
“This approach contrasts with the unpredictable, stop-start demand cycles currently prevalent in the industry.
“It involves providing the supply chain with visibility into funding-backed plans over a three to five-year period. Such transparency is crucial for better resource planning and timely project delivery,” he adds.
Bsaibes also emphasises the importance of incentivising suppliers, subcontractors and contractors to scale up their capacity. “This will help them grow in a coordinated manner through financial/regulatory support from the government.”
Another area of improvement is the digitisation of government processes, although Bsaibes notes that progress is already being made.
Bsaibes also calls for changes in Saudi Arabia’s regulatory environment.
The continued maturation of Saudi Arabia’s evolving regulatory framework will reduce the complexities faced by international firms. Yet, greater alignment with global construction norms will stimulate competition and investment in the kingdom’s expanding market.
According to Bsaibes, transitioning contract law closer to international standards, such as those outlined by the standards organisation International Federation of Consulting Engineers (FIDIC), would significantly mitigate risks for new market entrants. Presently, the reliance on sharia law introduces an element of unpredictability into obligations, he says.
To achieve this, he recommends adopting contract laws aligned with common law systems, such as the UK’s, to provide foreign suppliers and partners with a clearer understanding of their obligations.
Bsaibes concludes that while the continued evolution of Saudi Arabia’s regulatory environment will take time, gradual alignment with international construction norms will ultimately ease risks and costs for both local and global industry players.
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Deadlines extended for Kuwait oil projects worth $2.5bn
30 July 2025
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Kuwait’s state-owned upstream operator Kuwait Oil Company (KOC) has extended bid deadlines for six vital oil projects, which are estimated to be worth a total of $2.5bn.
The first contract, estimated to be worth KD292m ($951m), is focused on developing a separation facility in the NK SA/BA Area, close to Gathering Centre 23 (GC-23) and GC-24.
The scope of the contract also includes a new injection facility at GC-31 and effluent water injection networks in north Kuwait. The project’s latest bid deadline has been set for 5 August.
The second contract is to develop the planned Mutriba remote boosting facility in northwest Kuwait. It was originally tendered earlier this year with a bid submission deadline of 29 June. The deadline has now been extended to 17 August.
The project has an estimated budget of about KD130m ($420m) and its scope includes:
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The onshore Mutriba oil field is located in northwest Kuwait.
In October 2024, KOC announced that it was preparing to tender a project management contract for a scheme to develop the field.
At the time, it said four international companies had been invited to participate in the tender process. These were:
- Schlumberger (US)
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KOC also said that the list of qualified companies could be extended before the invitation to bid was issued.
The third project, estimated to be worth $100m, is for an effluent water injection network in north Kuwait. The bid deadline has been extended to 5 August.
Effluent water injection or water flooding is a secondary hydrocarbons recovery technique where produced water is injected into a well’s formation under high pressure and temperature conditions to recover more of the oil initially in place.
The fourth project is estimated to be worth around $100m and is focused on the construction of a new injection network in north Kuwait that will service the Sabriyah/Bahra (SA/BA) area. Its bid deadline has also been extended to 5 August.
The fifth project that has had its deadline extended is focused on developing Jurassic Light Oil (JLO) export facilities and upgrading the existing export network.
The main contract bid submission date for the project, which is understood to have a budget of KD175m ($569m), has been changed to 3 August.
The project was originally tendered in November last year with a bid deadline of 1 December 2024. Other recent deadlines have included 15 July, 24 June, 27 May, 27 April and 6 April.
In an announcement in April last year, KOC prequalified up to 15 contractors to bid for these projects:
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In September 2024, KOC announced a second list of 13 prequalified contractors, with Hyundai Heavy Industries and NMDC Energy removed from the list.
At the time, KOC said that companies not included on the list could file a complaint against their non-inclusion before the official invitation to bid on the project.
It is unclear whether more prequalified companies have been added or removed from the list since September.
The sixth project that has seen its bid deadline extended is focused on developing separation facilities at GC-25 and a water injection facility at GC-30.
The contract is estimated to be worth KD104m ($338m). In the latest extension, the bid deadline has been set for 10 August.
Kuwait is in the middle of an upstream projects push, in line with its goal of producing 4 million barrels a day of oil by 2035.
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Arada awards $16m retail complex construction deal
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Sharjah-based real estate developer Arada has awarded a AED60m ($16m) contract to build the Masaar Central project in the Suyouh district of Sharjah.
The contract was given to the local firm Intermass Engineering & Contracting.
Masaar Central will serve as the retail hub at the centre of the Masaar project.
Construction is expected to begin soon, with completion slated for 2026.
Masaar Central will offer retail, dining, wellness and education facilities over an area of 53,000 square feet.
In June last year, Arada awarded a AED830m ($226m) contract to Intermass Engineering & Contracting to build 597 units in the Saro cluster of the Masaar project.
Intermass has previously completed the Sendian cluster, the first residential phase of Masaar, and is currently working on Robinia, Masaar’s third phase.
Valued at AED8bn, the Masaar scheme includes 4,000 villas and townhouses across eight gated districts, featuring a nature-inspired masterplan with more than 50,000 trees.
Arada’s new project launches reflect increased activity in the UAE real estate market, where projects worth over $323bn are in execution or planning stages.
This aligns with a forecast from UK data analytics firm GlobalData, predicting that the UAE construction sector will grow by 4.2% in real terms in 2025, driven by infrastructure, energy, utilities and residential construction projects.
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Contract award nears for King Salman airport runway
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King Salman International Airport Development Company (KSIADC) has received best and final offers (bafos) for a design-and-build contract to develop the third runway at King Salman International airport (KSIA) in Riyadh.
"Bafos were submitted earlier this month [in July] and the contract is expected to be finalised soon," a source close to the project told MEED.
It is understood that the third and fourth runways will add to the two existing runways at Riyadh’s King Khalid International airport, which will eventually become part of KSIA.
In February, MEED exclusively reported that firms had submitted prequalification documents on 18 January for a contract to develop the third runway and taxiways at KSIA.
KSIADC, which is backed by Saudi sovereign wealth vehicle the Public Investment Fund, received interest from firms in December last year for the package.
KSIADC previously prequalified firms for the main engineering, procurement and construction packages and early and enabling works, as well as other elements of the construction work. These included specialist systems and integration; materials and equipment; engineering and design; professional services; health, safety, security, environment and wellbeing services; modular installation and prefabrication; local content; and environmental, social and governance (ESG) and other services.
The entire scheme is divided into eight assets:
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In August last year, KSIADC appointed several architectural and design firms for the various elements of the project.
KSIADC confirmed that it had signed up UK-based Foster + Partners to design the airport’s masterplan, including the terminals, six runways and a multi-asset real estate area.
US-based engineering firm Jacobs will provide specialist consultancy services for the masterplan and the design of the new runways.
The client also confirmed the appointment of UK-based engineering firm Mace for the delivery partner role on the project.
The airspace design consultancy contract was awarded to local firm Nera.
Mega airport project
The project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways. It will include the existing terminals at King Khalid International airport, as well as 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.
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The airport aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. The goal for cargo is to process 3.5 million tonnes a year by 2050.
Saudi Arabia plans to invest $100bn in its aviation sector. Riyadh’s Saudi Aviation Strategy, announced by the General Authority of Civil Aviation, aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.
It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations.
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NMDC Energy begins fabrication at Saudi Arabia yard
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Abu Dhabi-owned contractor NMDC Energy has started fabrication activities at its new yard in Ras Al-Khair, Saudi Arabia.
Built at a cost of AED200m ($54.5m), the yard covers 400,000 square metres within the Ras Al-Khair Special Economic Zone in the kingdom’s Eastern Province. It has a production capacity of 40,000 tonnes a year.
NMDC Energy held a steel-cutting ceremony on 28 July to mark the start of operations at the Ras Al-Khair yard.
The Abu Dhabi Securities Exchange-listed company inaugurated the facility in mid-January.
NMDC Energy signed a memorandum of understanding with Aramco to build the facility in 2018, when it was known as National Petroleum Construction Company (NPCC).
Nine offshore jackets are currently in production for NMDC Energy’s client, Saudi Aramco.
More than 1,800 employees will be mobilised from Abu Dhabi to the Saudi Arabia yard, NMDC Energy said.
“The Ras Al-Khair yard is central to NMDC Energy’s Saudi strategy and localisation roadmap. Over the past five years, the company has reinvested billions of riyals into the Saudi economy and is on track to increase its In-Kingdom Total Value Add score to 39% by 2025 and 51% by 2028,” NMDC Energy added.
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Miral moves Harry Potter theme park bid deadline
29 July 2025
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Abu Dhabi’s Miral has extended the bid submission deadline for a tender to build a Harry Potter-themed expansion at the Warner Bros World Yas Island entertainment destination in Abu Dhabi.
Earlier this month, MEED exclusively reported that the tender for the estimated AED2bn-AED3bn ($545m-$816m) main construction works had been issued to contractors, with bids initially due on 28 July.
Miral has extended the bid submission deadline until 4 August, according to sources.
The scope of the Warner Bros World phase two expansion includes adding 40,000 square metres (sq m) to the existing theme park. This will include a Harry Potter-themed zone with three new rides, retail outlets, and food and beverage facilities.
Enabling works for the project have begun and are being undertaken by local firm NSCC International. Another local firm, Emirates Electrical & Instrumentation Company, is carrying out the early works.
Canadian engineering firm EllisDon is the project consultant, and French firm Egis is the lead designer.
According to media reports, the Abu Dhabi project will be the world’s sixth Harry Potter-themed park. The others are in Florida and California in the US, Beijing in China, Osaka in Japan and Leavesden in the UK.
The Abu Dhabi project was first announced in November 2022.
Yas Waterworld
Miral has developed a series of theme parks and other entertainment-related attractions on Yas Island, working with several local and international contractors.
On 1 July, Miral opened a new 16,900 sq m expansion of its Yas Waterworld park to the public.
The expansion added 3.3 kilometres of slide sections to the park. The addition of 18 new rides and attractions, bringing the total number of rides to more than 60, is expected to increase visitor capacity by 20%.
Construction was carried out by local contractor Alec.
Disney park
In May, The Walt Disney Company and Miral signed an agreement to build a Disney theme park resort on Yas Island.
Disney, which is based in the US, said the Abu Dhabi site will be its seventh theme park resort. The others are in California and Florida in the US, Paris in France, Hong Kong and Shanghai in China, and Tokyo in Japan.
In a statement, Disney noted 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 one of the world's busiest airline hubs, with 120 million passengers travelling through Abu Dhabi and Dubai each year.
The Disney theme park resort in Abu Dhabi will include entertainment areas, themed accommodations, dining venues and retail experiences.
In 2023, Miral opened SeaWorld Abu Dhabi, also on Yas Island. Alec was the contractor for the estimated $565m project.
In 2018, Miral opened the Warner Bros theme park on Yas Island. Belgium’s Besix was the contractor for the estimated $531m project.
Other Miral projects have included the Etihad Arena and the indoor climbing and skydive centre Clymb. Bam International of the Netherlands was the contractor for the arena and Germany’s Zublin was the contractor for Clymb.
Yas Island was launched as a project in 2006 by local developer Aldar Properties. The original centrepiece attractions were the Yas Marina Circuit, which hosts Formula 1 motor racing’s annual Abu Dhabi Grand Prix, and the Ferrari World theme park.
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Distributed to senior decision-makers in the region and around the world, the August 2025 edition of MEED Business Review includes:
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