Traffic drives construction underground
3 April 2025

On 14 February, Dubai construction was thrust again onto the global stage when Elon Musk, the world’s richest man, announced plans to explore the development of an underground Dubai Loop transportation system, along the lines of the Las Vegas Convention Centre Loop project in the US.
Dubai has typically made headlines globally by constructing the world’s tallest towers. As the city becomes increasingly congested on the surface, it is taking some of its largest construction projects underground.
With Musk’s backing, the Dubai Loop scheme is the most high-profile tunnelling project launched to date. It involves carving a futuristic transport system underneath Dubai. The initial phase of the project is currently being studied by Dubai’s Roads & Transport Authority (RTA) in partnership with The Boring Company, which is owned by Musk. It will cover 17 kilometres (km) and have 11 stations, with the capacity to transport over 20,000 passengers an hour.
The project highlights the importance of expanding underground infrastructure in the Middle East region. This is mostly necessitated by the pressure that rapidly growing cities have put on existing transport and utility networks, particularly in major urban centres such as Dubai, Riyadh and Doha.
Underground opportunities
Projects that involve tunnelling, such as metro rail systems, underground highways and pedestrian walkways, are deemed key enablers in reducing congestion and optimising land use.
The recently completed metro systems in Riyadh and Doha are examples of how underground rail networks can facilitate efficient urban mobility, and more such schemes are planned.
Without these subterranean projects, cities risk being stuck in a permanent state of gridlock, with longer commute times and decreased productivity. At the same time, tunnelling allows urban planners to integrate sustainable transport solutions, as well as large-scale utilities networks, without disturbing existing cityscapes, thereby enhancing connectivity and economic growth.
These developments signal a major shift in engineering priorities, with regional governments investing in underground transport, sewerage and metro extensions to accommodate their growing populations and infrastructure needs.
While the tower crane-dotted skylines of urban centres in the GCC attract attention, delivering major projects underground is an equally impressive engineering feat. Tunnelling under busy cities requires advanced excavation techniques, careful planning and coordination to avoid disruptions.
More tunnelling work is expected as Dubai takes another significant step forward in tackling its ongoing traffic problems [with] a new metro link
UAE tunnelling projects
Tunnelling work forms a significant portion of the Dubai Metro Blue Line extension. Awarded in December for AED20.5bn ($5.5bn), the project includes 15.5km of underground track and five subterranean stations. When operational in 2029, the Blue Line will significantly expand Dubai’s metro capacity, linking major residential and commercial hubs.
More tunnelling work is expected as Dubai takes another significant step forward in tackling its ongoing traffic problems by starting the procurement process for its next metro link: the Gold Line.
Although the technical details of the project have yet to be revealed, it is expected that tunnels will form a major component of the scheme given that the new line will run through busy urban areas where there is little space to build overground.
The Gold Line will start at Al-Ghubaiba in Bur Dubai. It will run parallel to – and alleviate pressure on – the existing Red Line, before heading inland to Business Bay, Meydan, Global Village and residential developments in Dubailand.
As a first step, the RTA has sent a request for proposals to companies for the lead consultancy role on the multibillion-dollar project.
The UAE’s Etihad Rail also began a study of the tunnels required for the high-speed railway line connecting Abu Dhabi and Dubai in January. The survey works are ongoing on the Jaddaf and Dusup tunnels that will serve the high-speed rail link. Initial plans for the project include tunnelling works totalling 31km.
Another major tunnelling project in the UAE is the $22bn Dubai Strategic Sewerage Tunnels scheme. The client, Dubai Municipality, is preparing to tender its first packages, which include deep tunnels that will stretch 42km in Jebel Ali and 16km in Warsan.
The project will be delivered under a public-private partnership model, with international consortiums competing for contracts. Once completed, these tunnels will replace the traditional wastewater network, reducing energy consumption and enhancing long-term sustainability.
Saudi schemes
In Saudi Arabia, Riyadh is preparing to expand its metro network with the addition of a Line 7 and an extension to the existing Line 2.
The total length of Line 7 will be about 65km, of which 47km will be underground. The line will have 19 stations, 14 of which will be underground.
The project involves constructing a metro line linking the Qiddiya entertainment city development, King Abdullah International Gardens, King Salman Park, Misk City and Diriyah Gate.
In March, the Royal Commission for Riyadh City (RCRC) gave consortiums until 15 June to submit their bids for a design-and-build contract for the construction of Line 7.
The planned Line 2 extension is 8.4km long, of which 7.1km is underground, and three out of its five stations will be built underground. The RCRC is expected to award the construction contract this year.
In January, the kingdom also completed the phased roll-out of the Riyadh Metro network. The current network comprises six lines spanning about 176km, of which 74km is constructed underground.
These numbers indicate that over 42% of the overall network is underground, highlighting the growing importance of tunnels in the kingdom’s plans to improve infrastructure in its most densely populated cities.
Tunnelling works are also a key component of the plans to improve the stormwater drainage system in Jeddah, where the municipality is preparing for the construction of the King Abdullah Road-Falasteen Road tunnel.
The three-year scheme involves constructing 5.3km of tunnels with an internal diameter of 7.2 metres using tunnel boring machines (TBMs) and another 3.4km of tunnels with a diameter of 3.5 metres driven by pipe jacking or TBMs.
At the kingdom’s Neom gigaproject, city planners are looking to find solutions to many of the problems faced in existing cities and, as a result, tunnels and large-scale underground utilities corridors are being built at the beginning of the project. For example, the development’s Delta Junction tunnels will serve as a railway junction connecting the Spine infrastructure corridor with the Neom Connector rail link to the Oxagon industrial zone.
The project involves 26.5km of tunnelling work that will be split into a north and a south lot. The construction works are expected to begin this year as the client is evaluating the revised proposals submitted by firms in November last year.
Kuwait Metro will feature extensive tunnelling … ensuring minimal disruption to existing roads while integrating with future transport networks
Further tunnel projects
Beyond the Gulf, Egypt has a long history of tunnelling projects, as it has had to deal with crippling congestion and urban overcrowding for decades. In the 1980s, work was completed on two major projects that involved tunnelling: the first phase of the Cairo Metro system and the Greater Cairo wastewater project, which involved the construction of sewage tunnels on the east and west banks of the Nile.
Today, Cairo’s tunnelling projects include the Cairo Metro Line 4 project. Spanning 42km with 39 stations, it involves over 20km of tunnels.
Meanwhile, in Morocco, national railway operator L’Office National des Chemins de Fer (ONCF) is constructing a tunnel project in Rabat.
In February, ONCF announced a 3.3km tunnel to be constructed under the Bou Regreg river at an estimated cost of MD1.4bn ($140m). The tunnel will connect the Sale and Agdal stations in an effort to alleviate traffic.
Similarly, the long-awaited Kuwait Metro will feature extensive tunnelling to navigate the dense urban fabric of Kuwait City, ensuring minimal disruption to existing roads while integrating with future transport networks.
Qatar’s expansion of Doha Metro, meanwhile, requires additional underground infrastructure to connect developing areas and support the country’s vision for a comprehensive public transport system.
Mecca Metro, already serving millions of pilgrims, is also set for further expansion, likely involving significant tunnelling to facilitate smoother access to holy sites while overcoming geographic constraints.
In Oman, the Muscat Metro project is likewise expected to link key districts while preserving the city’s landscape and avoiding disruptions to arterial roads by introducing underground sections.
All of these projects show that tunnels will play an important role in the region’s future as it strives to create cities with more efficient and environmentally sustainable transit and utilities systems.
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Consortiums submit bids for Shagaya zone two plant27 July 2026

At least three consortiums have submitted bids for zone two of the third phase of Kuwait’s Al-Dibdibah power and Al-Shagaya renewable energy project.
The Kuwait Authority for Partnership Projects (Kapp) is procuring the 500MW solar photovoltaic (PV) independent power project (IPP) in partnership with Kuwait’s Ministry of Electricity, Water & Renewable Energy (MEWRE).
According to a source, bids were submitted on 26 July. The bidding consortiums are:
- Abu Dhabi Future Energy Company (Masdar, UAE) / Al-Ghanim International (Kuwait)
- Acwa (Saudi Arabia) / Arabian Engineering Projects Contracting Company (Kuwait)
- EDF Renewables (France) / Al-Kharafi & Sons (Kuwait) / Korea Western Power Company
Kapp issued a tender to develop the project last November. In October 2025, MEED reported that five consortiums and five individual companies had prequalified to participate in the project.
The Al-Dibdibah power and Al-Shagaya renewable energy phase three zone two project is located within the administrative boundaries of Kuwait’s Jahra governorate, west of Kuwait City.
The winning bidder will design, finance, construct and maintain the project.
The zone two scheme is the fourth renewable energy project to be developed under Kuwait’s public-private partnership programme.
Zone one
Kuwait aims to have a renewable energy installed capacity of 22,100MW by 2030 as part of the 20-year strategy announced in March 2025 and ending in 2050.
In July, MEED reported that a frontrunner had emerged for the Al-Dibdibah and Al-Shagaya phase three, zone one contract following the opening of financial bids.
The phase three, zone one IPP will have a total power generating capacity of 1,100MW.
Similar to the zone two project, EY and DLA Piper, together with DNV, are advising the client on the zone one solar IPP.
Separately, Kuwait-based contractor Power Grid Company recently won a KD48.6m ($158.7m) contract to build a 400kV overhead transmission line linking the Shagaya solar energy generation station with Wafra in southern Kuwait.
The transmission line will connect Shagaya to the Wafra (Z) transformer station and is part of the wider Shagaya masterplan. The contract was awarded by MEWRE, with Power Grid one of three firms that submitted bids last year.
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GCC banks prove resilient amid turmoil27 July 2026

Gulf banks are proving adept at navigating the economic and geopolitical turbulence that comes with operating in the region. These skills have come to the fore this year, as regional lenders draw on stable funding profiles and ample capital and liquidity buffers that protect them from near-term credit risks.
GCC banks’ fundamentals have proved remarkably resilient to the Iran-related turmoil, assuming the intensity of the February-April stage of the military conflict does not resume.
There have not been any significant outflows of external funding. While anecdotal evidence suggests some depositors briefly moved funds out of the region at the start of the war, ratings agency S&P Global notes that their return reflects confidence that the war will prove short-lived.
Funding strength
Metrics for the early part of the year revealed a robust picture. Domestic deposits held up strongly in the first quarter of 2026, total GCC domestic deposits rising by 16.9% in year-on-year terms, compensating for the decline in interbank funding.
State-linked deposits grew at a particularly rapid pace, led by the UAE and Kuwait, which offset decelerating private-sector deposit growth in those countries.
Domestic deposits accelerated in April, a pointer to GCC governments’ proactive stances in shielding their banking systems from undue stress. The inflow of public deposits accelerated quite significantly in this period, although that pace will likely subside as conditions gradually normalise.
Such deposits continue to underpin GCC banks’ wider performances. “Funding and liquidity is generally a strength for the region. Government deposits typically make up 20%-30% of the banking sector deposits. That is really important as these are sticky deposits,” says Redmond Ramsdale, head of Middle East ratings at Fitch Ratings.
Funding and liquidity is generally a strength for the region
Gulf states’ heavy reliance on public sector and government-related deposits has proved valuable in the current environment, anchoring banks’ funding profiles and helping reduce potential risks.
Fund outflows have not materialised to any significant degree. “We had some anecdotal evidence of funds being withdrawn, but they returned in the following weeks,” says Ramsdale.
Solid fundamentals
GCC banks entered the conflict period in strong shape. According to S&P, domestic private sector credit growth in the region remained robust in the first quarter – the annualised growth rate was 8% at the end of March.
Core capital buffers are about 15%-16% – higher still for the top lenders – ensuring total loss-absorbing capacity stays below 9% of equity. Regulatory ratios exceed relevant thresholds, providing a significant buffer, according to ratings agency Moody’s.
“If you look at the whole region, the proportion of the lending book that is non-performing, on a weighted average basis, sits around 2%,” says Badis Shubailat, a senior analyst at Moody’s.
“Against this solid level of asset quality, you have a cushion of provisions for expected losses that more than covers the existing stock of problem loans, which provides a strong first line of defence.”
Then, as a second line of defence, are core capital buffers that remain high by global standards, with levels around 15%-16%. Put together, this explains why the banks are sitting on comfortable positions in terms of loss-absorption capacity.
At the end of Q1 2025, the top 45 GCC banks reported an average Tier 1 capital ratio of 17%, with coverage ratios of 155.8%, according to S&P.
“Credit losses are at historical lows of 50 basis points (bps) for the region, and there are very good provisioning buffers – all of which helps to mitigate the negative consequences of the expected asset quality deterioration,” says Tatjana Lescova, director and lead analyst at S&P.
According to Shubailat, the fact that the conflict impact on GCC banks has not been as pronounced as on other sectors reflects that over the past three years – and until right before the conflict started – the region as a whole, and its banking systems, had demonstrated remarkable resilience. In contrast, major advanced economies were struggling with inflationary pressures and subdued economic growth.
“This was visible in Saudi Arabia and the UAE, the two largest economic diversification engines in the region, which happen to also represent more than two-thirds of total banking system assets,” says Shubailat.
Limited exposure
Gulf banks have also been helped by the fact that those economic sectors most impacted by conflict – tourism, hospitality, energy – do not generally form a large part of their collective loans books.
“There will be weaker performance of borrowers in the most obvious affected sectors like infrastructure, tourism, logistics, transport and real estate, but tourism is actually a pretty small exposure for the banks – less than 3% of loan books,” says Ramsdale. “There might be a bit of pressure on small and medium-sized enterprises (SMEs), which are less able to cope with the pressures than the larger corporates, but again, for banks, SME lending is not very big.”
Banks’ exposure to the real estate and construction sectors is highest in Qatar – 31% of total credit at the end of March – while the exposure in Kuwait stands at 25%, with Saudi Arabia at 16% and Bahrain at 12%, notes S&P. UAE banks have been consistently reducing their exposure to these sectors, down to 13% at the end of March, compared to 21% at year-end 2020.
Moody’s Shubailat says that developers in the UAE sit on solid balance sheets and strong revenue backlogs, while banks’ exposure to the construction sector has declined. “So the quantum is lower, the credit quality of the exposure is better, and the banks are sitting on higher capital and provisioning buffers,” he notes.
Gulf bankers are not resting on their laurels. They know that even if bad loans have been limited, they cannot forestall the possibility of problem exposures further down the road.
“Asset quality deterioration is a risk that we expect to materialise later in the year. This is because of weaker macro expectations, and negative impact on some of the corporate sectors, albeit varying across different GCC countries,” says Lescova.
On average, for the region, S&P expects 20 bps of increases in credit losses for this year. When it comes to asset quality, the regulatory forbearance measures announced by three central banks will help alleviate the impact.
Policy support
Central bank moves have added another layer of support. Forbearance measures from the UAE, Kuwait and Qatar central banks have allowed additional headroom.
For example, in mid-March, the Central Bank of the UAE launched a five-pillar resilience package that relaxed capital buffer stipulations, representing more than $272bn in support.
Kuwait eased liquidity requirements, raised maximum lending limits and released a portion of the capital conservation buffer to expand refinancing and credit quality absorption capacity. Qatar, meanwhile, has cut the reserve requirement from 4.5% to 3.5% for deposits.
Forbearance measures from the UAE, Kuwait and Qatar central banks have allowed additional headroom
Such measures were not a response to a banking crisis, says Ramsdale. “Some of the support packages that we have seen coming out of the central banks, in the UAE, Qatar and Kuwait, were preventative support measures,” he says.
“They were designed to boost confidence and limit that pass through from temporary deposit volatility. It was not to do with acute banking stress.”
Market confidence
Larger banks are better positioned to cope with straitened economic times. They are generally more geographically diversified beyond their domestic markets, and international operations have historically been a growth driver for them.
“When there is increased market uncertainty, larger banks may benefit from a flight-to-quality movement, with deposits moved away from smaller banks. Based on Q1 results, only a few smaller banks have reported a contraction in the customer deposits,” says Lescova.
The GCC’s largest banks, including Al-Rajhi Banking & Investment Corporation, Saudi National Bank, First Abu Dhabi Bank, Qatar National Bank, Abu Dhabi Commercial Bank and Emirates NBD, remain highly profitable, although they may not perform as strongly as they would have had the conflict not occurred.
“We already expected some softening in profitability before the conflict, because of the normalisation of the cost of risk upwards from incredibly low levels over the last three years, [which] were driven by a very strong recovery performance from the banks,” says Shubailat.
“In turn, this current situation adds a layer of pressure to the normalising profitability story by increasing provisioning needs in light of the recent economic shocks,” he adds.
Confidence in GCC banks was evident from the outset of the conflict. In early April, Emirates NBD priced a $750m AT1 capital issuance, the first international debt capital markets transaction by a GCC issuer since late February.
“The first ceasefire saw things like private placements start happening again, and that slowly translated into the opening up of public markets.
“Emirates NBD was one of the first banks to open up that market, and we are seeing the largest banks issuing again,” says Ramsdale.
The operating environment for Saudi Arabia is ranked BBB+ – a strong position, all things considered. Ramsdale notes that Riyadh’s reprioritisation of large projects associated with Vision 2030 “means growth will probably be slightly slower in Saudi Arabia”, but adds: “That is actually a good thing, because growth was so strong it was beginning to pressure funding, liquidity and capitalisation.
“Taking off some of that pressure is a positive for banks.”
Growth prospects
Stronger earnings performances will allow banks to bankroll mergers and acquisitions (M&A), building on inorganic routes to growth. Within the past year, the National Bank of Bahrain and Bank of Bahrain & Kuwait (BBK) have agreed to explore a merger, while BBK has also absorbed HSBC’s retail banking business.
Emirates NBD is reported to be looking to acquire HSBC’s business in Turkiye, a country where the Dubai bank already has a presence through its takeover of DenizBank in 2019. It also grew its stake in India’s RBL Bank this year to 60%.
“Certainly the big banks will remain opportunistic over M&A – where the value comes at the right price, then they are interested. And if the big international banks are going to pull out, they tend to have some of the best-quality assets, so you can understand why regional players might be interested in them,” says Ramsdale.
Such moves should provide reassurance that, despite recent challenges, GCC banks are well placed to ride out the remainder of 2026 and resume the positive trajectory that was evident before the Iran war shook the region.
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Saudi Arabia issues RFQ for third round of gas-fired IPPs27 July 2026

Saudi Power Procurement Company (SPPC) has issued the request for qualifications (RFQ) for the third round of its combined-cycle gas turbine (CCGT) independent power producer (IPP) programme.
According to the documents, the deadline for developers to submit statements of qualification is 16 August.
SPPC expects to issue notices of prequalification on 11 September, after which request for proposals documents will be issued to qualified applicants.
The latest date for the submission of clarification questions is 9 August.
The RFQ covers future CCGT IPPs, although the document does not specify the number, locations or capacities of the projects.
Earlier in July, MEED reported that Saudi Arabia had begun qualification for CCGT plants to be built with provision for future carbon capture units.
The projects will comprise new CCGT plants developed on a build-own-operate basis. Each project will be implemented through a special-purpose project company wholly owned by the successful bidder.
The project companies will sell the entire capacity and output of the plants to SPPC under 25-year power-purchase agreements starting from the respective commercial operation dates. SPPC will be responsible for dispatching electricity from the plants.
The plants will use advanced H-class or J-class gas turbine technology. Each IPP is expected to comprise two or three gas turbine generators, corresponding heat recovery steam generators with duct firing, and one or two steam turbine generators.
Natural gas will be the primary fuel, with diesel used as a backup. SPPC will be responsible for supplying both fuels under the power-purchase agreements.
CCGT IPP programme
SPPC said the procurement marks the next stage of its CCGT IPP programme.
The first four projects comprise Taiba 1, Taiba 2, Qassim 1 and Qassim 2, with a combined capacity of 7,200MW.
The second group comprises Rumah 1, Rumah 2, Nairyah 1 and Nairyah 2, also with a combined capacity of 7,200MW.
All eight plants are under construction, with Qassim 1 and Taiba 1 expected to reach commissioning in 2028.
Developers that were prequalified as financial or technical members for the Rumah and Nairyah projects can request to maintain the same qualification for the upcoming CCGT projects. They must submit the request and updated financial information by the 16 August deadline.
For new applicants, financial members must have reached financial close on at least two non-recourse IPP, IWPP, IWP or ISTP projects since January 2010. At least one must have involved senior debt of $500m or more. Applicants must also have a minimum net worth of $350m.
Technical members must demonstrate development experience on at least two conventional energy IPPs with a combined capacity of 2,000MW since January 2016. They must also have ownership experience on at least two such projects totalling 3,000MW and relevant operations and maintenance experience.
US/India-based Synergy Consulting is the financial adviser for the procurement, Germany’s Fichtner is the technical adviser and UK-headquartered Eversheds Sutherland is the legal adviser.
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Contractor wins The Chedi residences Dubai contract27 July 2026
Dubai-based firm Ancient Builders Constructions has won a contract to build The Chedi Private Residences, located in the Barsha Heights area near Sheikh Zayed Road.
The contract was awarded by local developer Al-Seeb Real Estate Development.
The project comprises a 250-metre-tall, 44-storey tower and will offer about 117 residential units upon completion.
Enabling works are under way and are being undertaken by local firm Soiltec Piling & Foundation.
Dubai-based High Art Engineering Consultancy is the project consultant.
Local architectural firms Bruno Guelaff and BG Group are the project designers.
Construction is expected to be completed by 2029.
Al-Seeb Real Estate Development’s latest contract award in the UAE market comes amid heightened real estate activity in the construction sector. Schemes worth more than $323bn are in the execution or planning stages, according to UK-based analytics firm GlobalData.
GlobalData forecasts that output from the UAE’s residential construction sector will grow by 3% in real terms over 2026-29, supported by infrastructure, energy and utilities developments, as well as residential construction projects.
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Saudi Arabia issues RFP for Group 2 bess projects27 July 2026

Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), has issued the request for proposals (RFP) for the second phase of its independent battery energy storage system (bess) projects in Saudi Arabia.
The Group 2 programme comprises six independent storage provider (ISP) projects with a total capacity of 3GW, equivalent to 12,000 megawatt-hours based on a four-hour storage duration.
According to a source, the RFP was issued earlier in July and developers have since submitted a first round of clarification requests to SPPC as they prepare their bids.
Developers have until October to submit proposals, the source said.
The six bess projects include:
- Samha bess ISP: 500MW (Qassim)
- Al-Leeth bess ISP: 500MW (Mecca)
- Al-Henakiyah bess ISP: 500MW (Medina)
- Khulis bess ISP: 500MW (Mecca)
- Sadawi bess ISP: 500MW (Eastern Province)
- Ashyrah bess ISP: 500MW (Mecca)
On 1 July, MEED reported that up to 27 firms had prequalified to participate in the second phase. SPPC previously received statements of qualification on 13 May.
It is understood that Abu Dhabi National Energy Company (Masdar, UAE), Acwa (Saudi Arabia), EDF (France), Korea Electric Power Corporation (Kepco, South Korea), International Power (Engie, France) and Marubeni Corporation (Japan) are among the companies likely to make offers for the contracts.
Winning bidders will hold 100% equity in a special purpose vehicle (SPV), with each SPV entering into a storage services agreement with SPPC as part of the independent storage provider structure.
The programme forms part of Saudi Arabia’s National Renewable Energy Programme (NREP) and supports the kingdom’s target of generating about 50% of its electricity from renewable energy by 2030. The projects will be developed under a build-own-operate model.
US/India-based Synergy Consulting is advising SPPC on the energy storage Group 1 and Group 2 programme.
Contracts are expected to be awarded for Group 1 Bess projects in the coming months, with both Acwa and Engie understood to be frontrunners for these contracts.
Separately, SPPC has extended the deadline for developers bidding for four solar projects under round seven of the NREP, led and supervised by the Ministry of Energy.
The deadline for the four solar photovoltaic independent power producer (IPP) projects with a combined capacity of 3,100MW has been extended to 30 August.
The deadline for the two wind IPPs with a combined capacity of 2,200MW has been extended to 14 September.
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