meed-logo

line1 line2 line3
SIGN IN / REGISTER

Transport projects driven by key trends

24 December 2024

 

Two key trends are driving the region’s transport projects. The first is a longstanding competitive advantage based on the Middle East’s strategic location, while the second is a renewed drive for regional integration. 

Over the past 20 years, the Middle East’s aviation sector has been transformed. Dubai has established itself as the world’s busiest international airport, while other regional airports have become significant aviation hubs, albeit on a smaller scale. 

The logic is simple. The Gulf is within an eight-hour flight of most major destinations and two-thirds of the world’s population. It is also strategically located between established markets in Europe and North America and emerging markets in Africa and Asia. 

Over the past decade, major projects have been undertaken to upgrade capacity and harness more of the global aviation market. As these projects were completed, 2024 became a turning point and the focus pivoted to two new projects that will be the largest airports in the region by far.

Major airports

Riyadh’s King Salman International airport was launched at the end of 2022. The airport, which will be built to replace the existing King Khalid International airport, aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050.

In 2024, the project took several steps forward: it appointed UK-based Mace as a delivery partner; tendered contracts for delivery partner roles for the terminals, airside works and landside infrastructure; and began to approach contractors for construction work on the project. 

The region’s other major airport scheme is the $35bn expansion of Dubai’s Maktoum International airport. The project, which had been planned for over a decade, had new designs approved in April. It will have a passenger handling capacity of 260 million passengers annually – the world’s largest. 

Early infrastructure contracts have been awarded since the designs were approved, and contractors have been briefed on main construction packages that are expected to start in 2025. 

Building connections

The other key drive for the region’s transport projects is integration. Following the 2021 Al-Ula agreement, the GCC has been pressing to establish closer trade ties to accompany closer political links. At the same time, seaborne trade has been threatened by logistics bottlenecks and, more recently, by Houthi attacks in the Red Sea. These two factors combined have led to a push to build better overland transport links across the region.

The best demonstration of the renewed focus on overland transport links connecting the region came in April 2024, when Oman-Etihad Rail Company awarded contracts for the Hafeet Rail project connecting the UAE with Oman. 

The estimated AED5.5bn ($1.5bn) design-and-build contract for the civil works was secured by Abu Dhabi-based National Projects Construction, National Infrastructure Construction Company and Tristar Engineering & Construction with Oman’s Galfar Engineering & Contracting. A contract for the rolling stock systems and integration contracts went to German firm Siemens and Egyptian contractor Hassan Allam Construction. 

The speed at which the Hafeet Rail contracts were awarded was an anomaly, as other major rail projects have taken much longer to be awarded and move into construction. This has become a source of frustration for companies that invest considerable time and financial resources in tendering for contracts. 

One of the longest-running contract negotiations in the region is for the $7bn Saudi Landbridge project that will link the western Red Sea coast of the kingdom to the eastern Gulf coast through Riyadh. 

Saudi China Landbridge Consortium signed a memorandum of understanding to develop the project in October 2018. After six years of negotiations, there is now an expectation that construction will start in 2025, although there have been false dawns in the past.

The Mecca Metro project also has a long history. MEED reported in June 2024 that a feasibility study for the $8bn first phase of the scheme had restarted. Contracts for construction work were tendered and close to being awarded
in 2014. 

Another rail project that has been slow to progress is Bahrain’s planned metro scheme. Launched in 2021, Bahrain’s Transportation & Telecommunications Ministry prequalified seven groups for the contract to deliver the first phase of the network on a public-private partnership basis in early 2023. Since then, it is understood that the project has shifted back to the study phase as the government considers the best way to proceed with the scheme. 

Airport projects also take time. The construction contract for the substructure of Al-Maktoum International airport was close to being awarded in early 2020 before the Covid-19 pandemic. That tender then ceased to be a priority as the focus for Dubai’s aviation sector shifted to supporting airlines Emirates and Flydubai and airport operations during the lockdown period, enabling the sector to reopen more quickly than its competition. 

Now, expanding Dubai’s airport capacity is once again a strategic priority. Dubai International’s constrained site means it cannot add to its two existing runways, which means it is becoming vulnerable to being overtaken by other emerging hubs in the region.

At the tail end of the construction process, the completion of large-scale transportation projects is often delayed. The largest ongoing transport scheme in the region by value is Riyadh’s $23bn six-line metro network, for which construction contracts were awarded in 2013. It was rumoured in late 2024 that it would open by the end of the year, although no opening date has been confirmed. 

There are examples of rail projects being completed more quickly. The Doha Metro network was opened as planned before Qatar hosted football’s Fifa World Cup 2022. The second and third phases of the UAE’s Etihad Rail network were also completed promptly, which has allowed Etihad Rail to focus on other schemes such as the passenger rail service, the Hafeet Rail project and the proposed high-speed rail scheme. 

Like railways, there are examples of delayed airport schemes that ran over budget. The Midfield Terminal Complex at Abu Dhabi International airport was delayed for years, as was the opening of the first phase of Hamad International airport in Qatar and Muscat International airport in Oman. 

Although delays were a significant problem for the construction companies involved in the projects, it is worth
noting that once the projects were completed, they were broadly praised for their quality and step-change in passenger experience.

 

Future focus

Looking ahead to 2025, the region’s strategic location and competitive edge in aviation will remain, which will support the business case for airport projects. The more interesting challenge will be the region’s ability to fund projects as large as King Salman International airport and Al-Maktoum International airport. 

In Saudi Arabia, project spending is being more closely managed than it was in the past, and although people close to the King Salman International airport scheme insist that it remains a strategic priority, the same can be said of many other major projects in the kingdom. 

There are also funding questions to be answered for Al-Maktoum International airport. Dubai does not have the financial resources to match Saudi Arabia, and with other infrastructure spending commitments – such as the $5bn Blue Line extension to Dubai Metro and an $8bn stormwater drainage scheme – funding the $35bn airport project will be a challenging undertaking. 

High-level concerns are also present for transport links within the region. The warm relations that countries within the region enjoy today may change in the future, and should that happen, the impetus to complete regional rail links will quickly subside. 

On the operational level, securing contractors and resources from the supply chain will be an ongoing problem. The record levels of construction awards in recent years mean that construction companies can afford to be selective about the projects they work on, and when they do choose to bid, they no longer feel obliged to slash their prices.

According to regional projects tracker MEED Projects, there were $37.8bn of transport contract awards in 2023, up from the $36.8bn of awards recorded in 2022. 

By the end of October 2024, there had been $30.8bn of transport project contract awards. If extrapolated, this suggests a $37bn total for 2024, which is only slightly below the 2023 annual total. 

The ability of contractors to hold firm when bidding was evidenced in October 2024, when initial offers were submitted for Dubai Metro’s Blue Line extension. The lowest bids were about $1bn over the project’s official $5bn budget, and a subsequent round of revised prices did not reduce that gap significantly. 

Dubai Metro is just one of several major rail schemes due to be awarded soon. As well as the Saudi Landbridge, contractors are also competing for a contract to complete the extension to Riyadh Metro’s Line 2, which is at the bid evaluation stage. A contract to build an entirely new Line 7 was also tendered in September 2024 with a closing date in March 2025. 

While it is not entirely reliant on these metro projects and the airports in Riyadh and Dubai moving into construction, their progress will go a long way to determining whether 2025 is a good year or not for transport projects in the region. 

https://image.digitalinsightresearch.in/uploads/NewsArticle/13147137/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Egypt signs $420m Gabal El-Zeit wind agreements

    10 June 2026

    Egypt has signed agreements worth $420m for the investment, operation and power purchase of the 580MW Gabal El-Zeit wind power complex in the Red Sea region.

    Gabal El-Zeit 1 has a capacity of 240MW, while Gabal El-Zeit 2 and 3 have capacities of 220MW and 120MW, respectively.

    The agreements were signed between Egypt’s New and Renewable Energy Authority (NREA), the Egyptian Electricity Transmission Company (EETC) and Dubai-based Alcazar Energy.

    Under the agreements, Alcazar Energy will invest in, operate and manage the farms through a project company established under Egyptian law.

    The company will be responsible for technical operations, maintenance and efficiency upgrades while maintaining a minimum capacity of 580MW throughout the contract period.

    The Egyptian Electricity Transmission Company will purchase the electricity generated by the plant.

    The agreements follow earlier efforts to privatise the Gabal El-Zeit wind complex, involving a deal with UK-headquartered private equity firm Actis.

    According to the Egyptian government, the project supports the country’s state ownership policy and national energy strategy, which aim to increase the share of renewable energy in the electricity mix to 45%.

    The Gabal El-Zeit area on Egypt’s Red Sea coast is one of the country’s most established wind power development zones. The latest Gabal El-Zeit wind farm was completed in 2014, according to MEED Projects data. Germany’s Siemens Gamesa was the main contractor. 

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17170360/main.jpg
    Mark Dowdall
  • Majid Al-Futtaim awards $545m Ghaf Woods contract to ECC

    10 June 2026

    Majid Al-Futtaim Properties has appointed Engineering Contracting Company (ECC) as the main contractor for the Capria East, Capria West and Maravelle Residences developments at its Ghaf Woods community in Dubai, in a deal valued at AED2bn ($545m).

    The contract covers the construction of one-, two- and three-bedroom apartments and duplex residences across the two Capria clusters.

    The award adds to a series of major construction contracts Majid Al-Futtaim has issued across its Dubai communities in recent years.

    In May, local contractor Al-Sahel Contracting was awarded a AED700m contract for the Distrikt development, also at Ghaf Woods.

    In 2024, Majid Al-Futtaim awarded AED3bn in contracts for its Tilal Al-Ghaf community, appointing Innovo Build to build 94 waterfront villas at Elysian Mansions and United Engineering Construction (Unec) to deliver 130 villas at the Alaya development.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17170744/main.jpg
    Colin Foreman
  • Saudi Arabia and Turkiye sign railway agreements

    10 June 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia and Turkiye have signed two memorandums of understanding (MoUs) to strengthen bilateral cooperation in the railway and logistics sectors, advancing Riyadh’s ambitions to become a global logistics hub.

    Transport and Logistics Services Minister Saleh Al-Jasser and Turkish Transport and Infrastructure Minister Abdulkadir Uraloglu signed the agreements at the ministry’s headquarters in Riyadh on 9 June, following ministerial talks held with a high-level Turkish delegation. Transport General Authority president Fawaz Al-Sahli and officials from the kingdom’s transport and logistics sector were also present.

    Agreement scope

    The first MoU covers logistics services and operations, including the exchange of expertise, policies and regulations. The second focuses on railway technologies, signalling and communication systems, railway digitalisation, human capacity development, the localisation of the railway industry and measures to reduce the sector’s environmental impact.

    More broadly, the agreements cover cooperation on railway standards and related innovations, the exchange of expertise on the design, operation and maintenance of rail projects, and engineering, infrastructure and safety standards.

    The two sides will also cooperate on research and development, with provision for joint workforce training through specialist railway academies.

    Riyadh said the agreements will help support its National Strategy for Transport and Logistics Services and Saudi Vision 2030, which seeks to position the kingdom as a logistics bridge connecting three continents.

    Turkish projects

    Turkish contractors have already established themselves as key players in the region’s rail sector. In 2012, Yapi Merkezi secured a $2.1bn contract for work on the Haramain high-speed rail network in Saudi Arabia, while Turkish firms Mapa and Limak are leading the ongoing civil works on Dubai’s $5.5bn Metro Blue Line project as part of a China Railway Rolling Stock Corporation (CRRC) consortium. Turkish consultancy Proyapi Muhendislik ve Musavirlik Anonim Sirketi has also won design contracts for the 111km Kuwait National Rail Road project.

    The agreements signed by Saudi Arabia and Turkiye may also give momentum to longstanding discussions around a rail corridor linking the GCC with Turkiye. The route, which has been discussed for years, has gained renewed impetus in recent months as the effective closure of the Strait of Hormuz has pushed regional governments to accelerate the development of overland trade alternatives.

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

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17169958/main.gif
    Colin Foreman
  • Joint venture tenders Algeria field development contract

    10 June 2026

     

    Register for MEED’s 14-day trial access 

    Hassi Bir Rekaiz Group (GHBR), which operates Algeria’s Hassi Bir Rekaiz field, has issued a tender for phase 2A of the asset’s field development project.

    GHBR is a joint venture of Algeria’s national oil and gas company Sonatrach and Thailand’s national exploration and production company PTTEP.

    The scope of the contract focuses on the “provision of engineering and supervision services”, according to documents published by Sonatrach.

    The tender has been issued with a bid deadline of 16 June 2026.

    In May, GHBR signed a $1.1bn contract for phase two of the Hassi Bir Rekaiz development project.

    The contract was won by a consortium of Egypt’s Petrojet and Italian engineering and contracting company Arkad.

    Petrojet’s portion of the project was estimated to be worth around $600m, and Arkad’s portion was estimated to be worth $500m.

    The contract used the engineering, procurement, construction and commissioning model.

    The scope of the project contract is focused on the construction of a central processing facility (CPF) capable of processing crude oil and associated gas.

    It also includes developing off-plot pipelines, as well as related utilities and infrastructure.

    The CPF will have the capacity to process 32,000 barrels a day (b/d) and will be designed to support future expansions.

    The related infrastructure will include an extensive pipeline network spanning approximately 217 kilometres, as well as a road network.

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

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17163750/main3325.jpg
    Wil Crisp
  • Algeria extends deadline for urea-formaldehyde project

    10 June 2026

     

    Algeria’s national oil and gas company Sonatrach has extended the bid deadline for a project to develop a new concentrated urea-formaldehyde unit in its Arzew industrial zone.

    The latest bid deadline is 15 June.  

    The contract uses the engineering, procurement, construction and commissioning model, and the bid deadline for technical tender submissions was originally set for early April.

    The condensed urea-formaldehyde unit will be located at the CP1-Z facility.

    The CP1-Z facility began operations in 1975 and has a capacity of 152,000 tonnes a year. It produces products including methanol, resin and formol.

    It is a two-phase tender. The first phase is a technical bid submission, and the second phase is a commercial bid submission.

    To be eligible to win this contract, companies must specialise in petrochemical industrial installation projects.

    They also need to have a share capital of at least $7m and more than 15 years of relevant experience.

    The new unit, UFC85, will have the capacity to produce 40,000 metric tonnes of concentrated and condensed urea-formaldehyde annually.

    The project’s scope also includes the development of auxiliary equipment and installations.

    Urea-formaldehyde has a wide range of uses, including the production of laminates, textiles and paper.

    In the wood industry, it is used as a thermosetting adhesive to bond wood to create plywood and particleboard. In agriculture, urea-formaldehyde is widely used as a slow-release fertiliser.

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

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17163657/main.jpg
    Wil Crisp