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
  • Arada awards $408m W Residences Dubai Harbour contract

    23 February 2026

    Register for MEED’s 14-day trial access 

    Sharjah-based real estate developer Arada has awarded a AED1.5bn ($408m) contract for the main construction works on its W Residences project at Dubai Harbour.

    The contract was awarded to the local Engineering Contracting Company.

    The development comprises 490 branded residences across three towers.

    The project's enabling works, including excavation and piling, have begun and are being carried out by another local firm, APCC Piling & Marine Contracting.

     Arada has awarded APCC a separate AED51m ($14m) contract to undertake the enabling works.

    The development will consist of residential, retail and leisure facilities and will be operated by US-based Marriott International.

    Arada launched the project in October 2024, as MEED reported.

    The latest contract award follows Arada's award of two contracts, worth AED2.7bn ($735m), for construction work on all four phases of the Masaar 2 residential community in the Rowdat district of Sharjah.

    Arada awarded Sharjah-based Intermass Contracting a contract for the construction of phases one, three and four.

    Abu Dhabi-based contractor Pivot Engineering & General Contracting won a contract to build the second phase of the project.

    The overall scheme encompasses the construction of 1,997 residential units across all four phases.

    Construction is expected to begin shortly, and the project is slated for completion by 2028.

    Arada is the developer behind three masterplanned residential communities in Sharjah. The Aljada, Masaar and Nasma Residences communities are valued at a combined AED33bn.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15717440/main.jpg
    Yasir Iqbal
  • Seven companies show interest in $3.3bn Kuwait gas project

    23 February 2026

     

    At least seven companies have shown interest in participating in the planned tender for a Kuwait Gulf Oil Company (KGOC) project to develop an onshore gas plant, according to industry sources.

    The project budget is estimated to be $3.3bn and the last meeting with contractors to discuss the project took place in Kuwait on 10 February.

    Previous meetings with contractors took place at the offices of Technip Energies in Abu Dhabi.

    Contractors that have sent representatives to the meetings include:

    • Samsung E&A (South Korea)
    • Larsen & Toubro (India)
    • Tecnicas Reunidas (Spain)
    • Saipem (Italy)
    • Hyundai Engineering & Construction (South Korea)
    • Hyundai Engineering Company (South Korea)
    • JGC (Japan)

    At the last meeting, contractors were told that the invitation to bid is currently scheduled to be issued at the end of March.

    It was also confirmed that Kuwait’s Central Agency for Public Tenders (Capt) will not be involved in the tender process.

    Capt is supposed to review technical and commercial evaluations of bids and verify that bidding is competitive.

    It is understood that not requiring Capt to approve this tender will speed up the tender process.

    The plant will have the capacity to process up to 632 million cubic feet a day of gas and 88.9 million barrels a day of condensates from the Dorra offshore field, located in Gulf waters in the Saudi-Kuwait Neutral Zone.

    In July last year, MEED reported that KGOC had initiated the project by launching an early engagement process with contractors for the main engineering, procurement and construction tender.

    France-based Technip Energies completed the contract for the front-end engineering and design.

    The facility will be developed next to Kuwait’s Al-Zour refinery.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15717358/main.png
    Wil Crisp
  • Egypt tenders 500MW solar IPP

    19 February 2026

    Register for MEED’s 14-day trial access 

    Egyptian Electricity Transmission Company (EETC) has issued a request for qualifications for a 500MW solar photovoltaic (PV) independent power producer project in Egypt’s West of Nile area.

    The bid submission deadline is 11 May.

    The project is being supported by the European Bank for Reconstruction & Development and will be developed under a build-own-operate model.

    Developers will be responsible for designing, financing, constructing, owning and operating the plant, with EETC acting as the offtaker for generated electricity.

    US/India-based Synergy Consulting is acting as lead, financial and commercial advisor for this transaction.

    The project forms part of Egypt’s strategy to strengthen long-term electricity supply and increase renewable generation capacity.

    Egypt is targeting 42% renewable energy in its power mix by 2030. The country aims to raise this share to 65% by 2040.

    EETC previously had plans to build a 200MW solar plant in a west Nile area but cancelled the tender for the project in 2020.

    Egypt's power sector had its strongest year in over a decade last year, accounting for $4.2bn of total contract awards.

    Despite dipping from the previous year, solar accounted for about $1bn of total awards. 

    In November, a consortium of local firms Hassan Allam Utilities and Infinity Power won contracts to develop two solar PV projects with a combined capacity of 1,200MW, supported by 720 megawatt-hours (MWh) of battery storage.

    The UAE’s Amea Power and Japan’s Kyuden International Corporation also recently reached financial close on a $700m project comprising a 1,000MW solar plant and 600MWh battery system in Aswan.

    The scheme is backed by a $570m debt package led by the International Finance Corporation and is expected to become Africa’s largest single-asset solar and storage facility when it enters operation later this year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15701778/main.jpg
    Mark Dowdall
  • Local contractor wins $143m Jeddah sewage contracts

    19 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s National Water Company (NWC) has awarded two sewage network contracts worth a combined SR536.3m ($143m) to local contractor Civil Works Company.

    The projects will be implemented over 32 months from site handover and will serve northern Jeddah districts.

    The first contract, valued at SR278.5m ($74.3m), covers incomplete main lines and secondary sewage networks serving parts of the Al-Bashair, Al-Asala and Al-Falah neighbourhoods.

    The scope includes pipelines ranging from 200mm to 800mm in diameter with a total length of about 54.8 kilometres (km).

    The package also includes sewage tunnels with diameters ranging from 600mm to 1,800mm and a total length of approximately 6.5km. Works will also serve the Taybah, Abhar Al-Shamaliyah and Al-Hamdaniyah districts.

    The second contract is valued at SR257.8m ($68.8m). It covers the implementation of main lines and sub-networks to serve part of the Al-Hamdaniya neighbourhood.

    The works include pipelines ranging from 200mm to 1,500mm in diameter with a total length of about 78.5km. The scope also includes horizontal drilling works for sewage tunnels with diameters from 1,200mm to 1,400mm and a total length of approximately 205 metres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15699620/main.jpg
    Mark Dowdall
  • Saudi Arabia prequalifies firms for gas transmission grids

    19 February 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia's Energy Ministry has prequalified companies to develop natural gas distribution networks in five industrial cities in the kingdom on a build-own-operate (BOO) basis.

    The industrial zones earmarked are Al-Kharj Industrial City; Sudair City for Industry and Business; and the First, Second and Third Industrial Cities in Jeddah, the Energy Ministry said in a statement.

    The contractors prequalified to bid for the natural gas transmission grids BOO scheme include eight standalone firms and seven consortiums:

    • East Gas (Egypt)
    • Natural Gas Distribution Company (Saudi Arabia)
    • Egyptian Kuwaiti Advanced Operation and Maintenance (Saudi Arabia)
    • Modern Gas (Egypt)
    • Saab Energy Solutions (Saudi Arabia)
    • Sergas Contracting (Saudi Arabia)
    • Bharat Petroleum Corporation (India)
    • UniGas Arabia (Saudi Arabia)
    • Best Gas Carrier / Khazeen / Mubadra (Saudi Arabia)
    • Al Sharif Contracting (Saudi Arabia) / Anton Oilfield Services Group (China) China Oil and Gas Group
    • Hulul (owned by Saudi Arabia’s National Gas and Industrialization Company) /Al-Fanar Gas Group (UAE)
    • Indraprastha Gas (India) / Masah Contracting (Saudi Arabia)
    • Expertise Contracting / PGL Pipelines (UK)
    • National Gas Company (Egypt) / Egypt Gas (Egypt)
    • Taqa Arabia (Egypt) / Taqa Group (UAE)

    The Energy Ministry has set a deadline of 23 April for these prequalified contractors to submit technical bids.

    The ministry added in its statement that it has identified a total of 36 industrial cities in Saudi Arabia for gas infrastructure development.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15699582/main0334.png
    Indrajit Sen