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
  • SLB passes evaluation for Kuwait upstream project

    12 December 2025

    The US-based oilfield services company SLB, formerly Schlumberger, has passed the technical bid evaluation for a major project to develop Kuwait’s Mutriba oil field.

    The Houston-headquartered company was the only bidder to pass the technical evaluation for the Mutriba integrated project management (IPM) contract.

    The minimum passing technical evaluation score was 75%.

    The full list of bidders was:

    • SLB (US): 97%
    • Halliburton (US): 72%
    • Weatherford (US): 61.5%

    The decision was finalised at a meeting of the Higher Purchase Committee (HPC) of state-owned Kuwait Petroleum Corporation (KPC) on 20 November 2025.

    According to a document published earlier this year by KOC, the IPM tender for the Mutriba field aims to “accelerate production through a comprehensive study that includes economic feasibility evaluation, well planning and long-term sustainability strategies”.

    The field was originally discovered in 2009.

    Commercial production from the Mutriba field started earlier this year, on 15 June, after several wells were connected to production facilities.

    The field is located in a relatively undeveloped area in northwest Kuwait and spans more than 230 square kilometres.

    The oil at the Mutriba field has unusually high hydrogen sulfide content, which can be as much as 40%.

    This presents operational challenges requiring specialised technologies and safety measures.

    In order to start producing oil at the field, KOC deployed multiphase pumps to increase hydrocarbon pressure and enable transportation to the nearest Jurassic production facilities in north Kuwait.

    The company also built long-distance pipelines stretching 50 to 70 kilometres, using high-grade corrosion-resistant materials engineered to withstand the high hydrogen sulfide levels and ensure long-term reliability.

    KOC also commissioned the Mutriba long-term testing facility in northwest Kuwait, with a nameplate capacity of around 5,000 barrels of oil a day (b/d) and 5 million standard cubic feet of gas a day (mmscf/d).

    Once this facility was commissioned, production stabilised at 5,000 b/d and 7 mmscf/d.

    In documents published earlier this year, KOC said that starting production from the field had “laid a solid foundation” for the IPM contract by generating essential reservoir and surface data that will guide future development.

    Future output from the field is expected to range between 80,000 and 120,000 b/d, in addition to approximately 150 mmscf/d of gas.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15235579/main.png
    Wil Crisp
  • Dana Gas makes onshore discovery in Egypt

    12 December 2025

    Register for MEED’s 14-day trial access 

    UAE-based Dana Gas has made an onshore gas discovery in Egypt’s Nile Delta area, according to a statement from the company.

    The discovery was made by the drilling of the North El-Basant 1 exploratory well, and initial well results indicate estimated reserves of 15-25 billion cubic feet of gas.

    Production from the reserve is expected to exceed 8 million cubic feet a day (cf/d) once the well is connected to the national network.

    The North El-Basant 1 exploratory well was the fourth well in a campaign of 11 development and exploration wells.

    The campaign is being executed as part of the company’s $100m investment programme to support domestic gas production, increase reserves and meet growing energy demand.

    Earlier this year, Dana Gas completed the drilling of three wells, adding 10 million cf/d.

    The programme is expected to increase long-term production and add approximately 80 billion cubic feet of recoverable gas reserves, according to Dana Gas.

    Dana Gas expects to start drilling the fifth well in the programme, the Daffodil exploration well, in the first week of January 2026.

    Richard Hall, the chief executive of Dana Gas, said: “The latest drilling success reinforces the value of our investment programme in Egypt and highlights the significant remaining potential within the Nile Delta.”

    He added: “By increasing local gas production, the programme will help reduce Egypt’s reliance on imported liquefied natural gas (LNG) and fuel oil and is expected to generate more than $1bn in savings for the national economy over time.”

    Previously, Dana Gas signed an agreement with state-owned Egyptian Natural Gas Holding Company (EGas) to secure additional acreage under improved fiscal terms, and to accelerate drilling activity.

    Hall said: “We appreciate the strong cooperation from EGas and the ministry, and we remain committed to delivering the majority of our planned programme next year.

    “Regular and timely payments from our partners are crucial to sustaining our investment programme in Egypt."

    In November, a new gas discovery was made in Egypt’s Western Desert region by Khalda Petroleum Company, a joint venture of state-owned Egyptian General Petroleum Corporation and US-headquartered Apache Corporation.

    Egypt also started gas production from the West Burullus field in the Mediterranean Sea, after connecting the first wells to the national gas grid.

    The country is currently pushing to increase gas production in order to meet domestic demand and reduce its import bill.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15235552/main.png
    Wil Crisp
  • SAR to tender new phosphate rail track section in January

    12 December 2025

     

    Register for MEED’s 14-day trial access 

    Saudi Arabian Railways (SAR) is expected to float another multibillion-riyal tender to double the tracks on the existing phosphate railway network connecting the Waad Al-Shamal mines to Ras Al-Khair in the Eastern Province.

    MEED understands that the new tender – covering the second section of the track-doubling works, spanning more than 150 kilometres (km) – will be issued in January.

    The new tender follows SAR’s issuance of the tender for the project's first phase in November, which spans about 100km from the AZ1/Nariyah Yard to Ras Al-Khair.

    The scope includes track doubling, alignment modifications, new utility bridges, culvert widening and hydrological structures, as well as the conversion of the AZ1 siding into a mainline track.

    The scope also covers support for signalling and telecommunications systems.

    The tender notice was issued in late November, with a bid submission deadline of 20 January 2026.

    Switzerland-based engineering firm ARX is the project consultant.

    MEED understands that these two packages are the first of four that SAR is expected to tender for the phosphate railway line.

    The other packages expected to be tendered shortly include the depot and the systems package.

    In 2023, MEED reported that SAR was planning two projects to increase its freight capacity, including an estimated SR4.2bn ($1.1bn) project to install a second track along the North Train Freight Line and construct three new freight yards.

    Formerly known as the North-South Railway, the North Train is a 1,550km-long freight line running from the phosphate and bauxite mines in the far north of the kingdom to the Al-Baithah junction. There, it diverges into a line southward to Riyadh and a second line running east to downstream fertiliser production and alumina refining facilities at Ras Al-Khair on the Gulf coast.

    Adding a second track and the freight yards will significantly increase the network’s cargo-carrying capacity and facilitate increased industrial production. Project implementation is expected to take four years.

    State-owned SAR is also considering increasing the localisation of railway materials and equipment, including the construction of a cement sleeper manufacturing facility.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15229624/main.jpg
    Yasir Iqbal
  • Dar Global to develop $4.2bn Oman mixed-use project

    10 December 2025

    Register for MEED’s 14-day trial access 

    Saudi Arabia-headquartered real estate developer Dar Global has announced that it will develop a mixed-use project in Muscat at an estimated investment of RO1.6bn ($4.2bn).

    Dar Global will co-develop the Muscat Marine, Art & Digital District project with Oman's Art District Real Estate Development Company.

    The project will cover an area of over 1.5 million square metres (sq m) and will be developed in several phases over 12 years.

    The development will comprise a mix of residential communities, cultural venues, marinas, retail spaces, finance and business parks and hotels.

    Dar Global, a subsidiary of Dar Al-Arkan, was one of the first Saudi brands to list on the London Stock Exchange.

    Dar Al-Arkan established Dar Global in 2017 to focus on developing projects in the Middle East and Europe, including in Dubai, Qatar, Oman, London and the Costa del Sol in southern Spain.

    Dar Global has $12bn-worth of projects under development in six countries: the UAE, Oman, Qatar, Saudi Arabia, the UK and Spain.

    It completed three developments – the Urban Oasis and Da Vinci towers in Dubai and the Sidra gated community in Bosnia – in 2023.

    The company collaborates with global brands including Missoni, W Hotels, Versace, Elie Saab, Automobili Pagani and Automobili Lamborghini.

    In Oman, Dar Global is also developing the Aida project. In May, it awarded a contract to develop the villas and apartments as part of the project.

    According to an official statement, the construction works are expected to start immediately and the project is slated for completion in 2026.

    The main contract was awarded to local firm Al-Adrak Trading & Contracting.

    The latest announcement follows the awarding of contracts in June last year for the development of the first phase of the Aida project.

    The Aida project is being developed as a joint venture with Omran Group and the first phase is expected to be completed in 2027.

    UK analytics firm GlobalData forecasts that the Omani construction industry will expand at an annual average growth rate of 4.2% in 2025-28. Growth in the country will be supported by rising government investments in renewable energy, the transport infrastructure and the housing sector, all as part of Oman's Vision 2040 strategy.

    Growth during the forecast period will also be supported by increasing hospitality sector investments, with the government planning to invest RO11.9bn ($31bn) in tourism development projects by 2040 and supporting the construction of several hospitality projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15222694/main.jpg
    Yasir Iqbal
  • Contract award nears for Saudi Defence Ministry headquarters

    10 December 2025

     

    Saudi Arabia’s Defence Ministry (MoD) is preparing to award the contract to build a new headquarters building, as part of its P-563 programme in Riyadh.

    MEED understands that bid evaluation has reached advanced stages and the contract award is imminent.

    The MoD issued the tender in April. The commercial bids were submitted in September, as MEED reported.

    Located to the northwest of Riyadh, the P-563 programme includes the development of facilities and infrastructure to support the MoD’s broader initiatives under the kingdom’s Vision 2030 strategy.

    It covers the construction of:

    • A new military city featuring the MoD headquarters, support and logistics facilities, a residential and commercial community and space for future command centres
    • A National Defence University with a library, conference centre and academic buildings
    • A self-sustaining Joint Forces Command compound located approximately 50 kilometres from the military city

    The budget for the entire programme is expected to be $10bn-$12bn.

    In September 2023, MEED reported that Spain-headquartered Typsa had won two contracts for the project.

    The first contract, worth $11.4m, included data management, geographic information systems management, geotechnical reporting and the preparation of the phase one final traffic report. The contract duration was 270 days from the notice to proceed.

    The second contract, valued at $10.8m, involved preparing four conceptual masterplans for the P-563 site. It was set to last 255 days from the notice to proceed.

    These followed a $290m consultancy contract awarded to Typsa in March of the same year. The single-award task order covered a three-year base period, with an optional two-year extension.

    Typsa’s scope of work included programme management planning, communications, change and quality management and cost and schedule tracking.

    It also included design requirements, codes, standards and submission requirements, programme guidance, study integration, risk analysis and management, design reviews and a programme-of-work breakdown plan.

    READ THE DECEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Prospects widen as Middle East rail projects are delivered; India’s L&T storms up MEED’s EPC contractor ranking; Manama balances growth with fiscal challenges

    Distributed to senior decision-makers in the region and around the world, the December 2025 edition of MEED Business Review includes:

    > BAHRAIN MARKET FOCUS: Manama pursues reform amid strain
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15222401/main.gif
    Yasir Iqbal