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
  • Visa agrees to support digital payments in Syria

    5 December 2025

    Visa and the Central Bank of Syria have agreed on a strategic roadmap that will allow the US-based card and digital payments company to begin operations in Syria and support the development of a modern digital payments system.

    Under the agreement, Visa will work with licensed Syrian financial institutions under a phased plan to establish a secure foundation for digital payments.

    The early stages will involve Visa supporting the central bank in issuing Europay, Mastercard and Visa (EMV)-compliant payment cards and enabling tokenised digital wallets – bringing the country in line with internationally interoperable standards.

    Visa will also provide access to its platforms, including near-field communication (NFC) and QR-based payments, invest in local capacity building and support local entrepreneurs seeking to develop solutions leveraging Visa’s global platform.

    “A reliable and transparent payment system is the bedrock of economic recovery and a catalyst that builds the confidence required for broader investment to flow into the country,” noted Visa’s senior VP for the Levant, Leila Serhan. “This partnership is about choosing a path where Syria can leapfrog decades of legacy infrastructure development and immediately adopt the secure, open platforms that power modern commerce.”

    The move marks one of the most significant steps yet in Syria’s slow and uneven return to the formal global financial system and carries implications that reach beyond just payments technology.

    It lays the groundwork for overturning more than a decade of financial isolation in which Syria has operated largely outside global banking and settlement networks.

    Visa’s entry will not erase all existing barriers – as many restrictions remain in force and will continue to shape what is practically possible – but its support signals a reopening of channels that could smooth Syria’s reintegration into financial networks.

    The involvement of the US-based payments provider is also a further tacit sign of the US government’s enthusiastic bear hug of the new post-Assad Syrian government under President Ahmed Al-Sharaa.

    For investors assessing long-term opportunities, the presence of a globally recognised payments operator will provide reassurance that Syria’s financial system is returning to international norms, and the security and transparency that comes with it.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15207198/main.gif
    MEED Editorial
  • Meraas announces next phase of Nad Al-Sheba Gardens

    5 December 2025

    Dubai-based real estate developer Meraas Holding, which is part of Dubai Holding, has announced the eleventh and final phase of its Nad Al-Sheba Gardens residential community in Dubai.

    It includes the development of 210 new villas and townhouses and a school, which will be located at the northwest corner of the development.

    The latest announcement follows Meraas awarding a AED690m ($188m) contract for the construction of the fourth phase of the Nad Al-Sheba Gardens community in May, as MEED reported.

    The contract was awarded to local firm Bhatia General Contracting.

    The scope of the contract covers the construction of 92 townhouses, 96 villas and two pool houses.

    The contract award came after Dubai-based investment company Shamal Holding awarded an estimated AED80m ($21m) contract to UK-based McLaren Construction last year for the Nad Al-Sheba Gardens mall.

    The project covers the construction and interior fit-out of a two-storey mall, covering an area of approximately 12,600 square metres.

    The UAE’s heightened real estate activity is in line with UK analytics firm GlobalData’s forecast that the construction industry in the country will register annual growth of 3.9% in 2025-27, supported by investments in infrastructure, renewable energy, oil and gas, housing, industrial and tourism projects. 

    The residential construction sector is expected to record an annual average growth rate of 2.7% in 2025-28, supported by private investments in the residential housing sector, along with government initiatives to meet rising housing demand.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15206904/main.jpg
    Yasir Iqbal
  • Frontrunner emerges for Riyadh-Qassim IWTP

    5 December 2025

     

    Saudi Arabia’s Vision Invest has emerged as frontrunner for the contract to develop the Riyadh-Qassim independent water transmission pipeline (IWTP) project, according to sources.

    State water offtaker Saudi Water Partnership Company (SWPC) is preparing to award the contract for the IWTP "in the coming weeks", the sources told MEED.

    The project, valued at about $2bn, will have a transmission capacity of 685,000 cubic metres a day. It will include a pipeline length of 859 kilometres (km) and a total storage capacity of 1.59 million cubic metres.

    In September, MEED reported that bids had been submitted by two consortiums and one individual company.

    The first consortium comprises Saudi firms Al-Jomaih Energy & Water, Al-Khorayef Water & Power Technologies, AlBawani Capital and Buhur for Investment Company.

    The second consortium comprises Bahrain/Saudi Arabia-based Lamar Holding, the UAE's Etihad Water & Electricity (Ewec) and China’s Shaanxi Construction Installation Group.

    The third bid was submitted by Saudi Arabia's Vision Invest.

    It is understood that financial and technical bids have now been opened and Vision Invest is likely to be awarded the deal.

    The Riyadh-based investment and development company made a "very aggressive" offer, one source told MEED.

    In November, the firm announced it had sold a 10% stake in Saudi Arabia-based Miahona as part of a strategy to reallocate capital "towards new and diversified investments".

    The company did not disclose which projects the capital might be reallocated towards.

    As MEED recently reported, Vision Invest is also bidding for two major packages under Dubai's $22bn tunnels programme in a consortium with France's Suez Water Company.

    The Riyadh-Qassim transmission project is the third IWTP contract to be tendered by SWPC since 2022.   

    The first two are the 150km Rayis-Rabigh IWTP, which is under construction, and the 603km Jubail-Buraydah IWTP, the contract for which was awarded to a team of Riyadh-based companies comprising Al-Jomaih Energy & Water, Nesma Group and Buhur for Investment Company.

    Like the first two IWTPs, the Riyadh-Qassim IWTP project will be developed using a 35-year build-own-operate-transfer contracting model.

    Commercial operations are expected to commence in the first quarter of 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15206609/main.jpg
    Mark Dowdall
  • Adnoc creates new company to operate Ghasha concession

    5 December 2025

    Register for MEED’s 14-day trial access 

    The board of directors of Abu Dhabi National Oil Company (Adnoc Group) has approved the establishment of a new company to operate the Ghasha offshore sour gas concession in Abu Dhabi waters.

    The decision to create the new entity, to be called Adnoc Ghasha, was taken during a recent meeting of Adnoc Group’s board in Abu Dhabi, which was chaired by Sheikh Mohamed Bin Zayed Al-Nahyan, UAE President and Ruler of Abu Dhabi.

    Adnoc Group owns and operates the Ghasha concession, holding the majority 55% stake. The other stakeholders in the asset are Italian energy major Eni with a 25% stake, Thailand’s PTTEP Holding, which holds a 10% interest, and Russia’s Lukoil, owning the remaining 10% stake.

    The Ghasha concession consists of the Hail and Ghasha fields, along with the Hair Dalma, Satah al-Razboot (Sarb), Bu Haseer, Nasr, Shuwaihat and Mubarraz fields.

    Adnoc expects total gas production from the concession to ramp up to more than 1.8 billion cubic feet a day (cf/d) before the end of the decade, along with 150,000 barrels a day of oil and condensates. This target will mainly be achieved through the Hail and Ghasha sour gas development project.

    In October 2023, Adnoc and its partners awarded $16.94bn of engineering, procurement and construction (EPC) contracts for its Hail and Ghasha project – the biggest capital expenditure made by the Abu Dhabi energy company on a single project in its history.

    Adnoc awarded the onshore EPC package to Italian contractor Tecnimont, while the offshore EPC package was awarded to a consortium of Abu Dhabi’s NMDC Energy and Italian contractor Saipem.

    The $8.2bn contract relates to EPC work on offshore facilities, including facilities on artificial islands and subsea pipelines.

    The Hail and Ghasha development will also feature a plant that will capture and purify carbon dioxide (CO2) emissions for sequestration (CCS), in line with Adnoc’s committed investment for a carbon capture capacity of almost 4 million tonnes a year (t/y). The CO2 recovery plant will have a total capacity to capture and store 1.5 million t/y of emissions from the Hail and Ghasha scheme.

    Prior to reaching the final investment decision on the Hail and Ghasha project in 2023, the Ghasha concession partners, led by Adnoc, awarded two EPC contracts worth $1.46bn in November 2021 to execute offshore and onshore EPC works on the Dalma gas development project. The project will enable the Dalma field to produce about 340 million cf/d of natural gas.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15206382/main2754.jpg
    Indrajit Sen
  • Dubai RTA announces Al-Wasl road development project

    5 December 2025

    Register for MEED’s 14-day trial access 

    Dubai’s Roads & Transport Authority (RTA) has announced the Al-Wasl Road upgrade project, spanning 15 kilometres (km) from the intersection with Umm Suqeim Street to the junction with 2nd December Street.

    The scheme includes upgrading six intersections – Al-Thanya, Al-Manara, Umm Al-Sheif, Umm Amara, Al-Orouba and Al-Safa streets – along with upgrading Al-Thanya Street and constructing five tunnels totalling 3.8km.

    A new tunnel will be built at the intersection with Al-Manara Street. It will consist of three lanes and split into two routes: two lanes from Sheikh Zayed Road to Jumeirah Street and two lanes from Sheikh Zayed Road to Umm Suqeim Street, with a total capacity of 4,500 vehicles per hour.

    The project also includes a 750m-long tunnel on Umm Al-Sheif Street, comprising two lanes from Sheikh Zayed Road to Jumeirah Street, accommodating up to 3,200 vehicles per hour.

    A tunnel will be constructed at the intersection of Al-Wasl Road with Umm Amara Street, featuring two lanes in each direction, with a total length of 700m and a combined capacity of 6,400 vehicles per hour.

    The road will also be widened from two to three lanes in each direction.

    The project is expected to reduce travel times along Al-Wasl Road by 50% and increase capacity from 8,000 to 12,000 vehicles per hour in both directions.

    Planning for growth

    In March 2021, the government launched the Dubai 2040 Urban Master Plan. Its launch referenced studies indicating that the emirate’s population will reach 5.8 million by 2040, up from 3.3 million in 2020. The daytime population is set to increase from 4.5 million in 2020 to 7.8 million in 2040.

    In December 2022, Sheikh Mohammed Bin Rashid Al-Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, approved the 20-Minute City Policy as part of the second phase of the Dubai 2040 Urban Master Plan. 

    In addition to the road projects, the RTA’s Dubai Metro Blue Line extension forms part of Dubai’s plans to improve residents’ quality of life by cutting journey times, as outlined in the policy.

    The policy aims to ensure that residents can meet 80% of their daily requirements within a 20-minute journey time, on foot or by bicycle. This goal will be achieved by developing integrated service centres with all necessary facilities and by increasing population density around mass transit stations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15205950/main.jpg
    Yasir Iqbal