Tunnelling projects take the front seat
22 August 2023
The economic and energy diversification programmes of countries in the Middle East and North Africa have provided an impetus for physical infrastructure projects such as tunnels, which have become emblematic of the region’s transition towards a more interconnected and sustainable future.
In some cases, tunnelling projects in the region also extend beyond their utilitarian functions – in addition to decongesting cities and improving water networks, they embody diplomatic overtones and regional cooperation.
Some of the biggest tunnelling projects in the Middle East have historically been executed in the GCC, especially in Saudi Arabia and the UAE. These two countries also promise the most robust future project pipelines.
Neom tunnels
In line with its strategy of redefining sustainable urban living, the integration of tunnels is key to shaping the landscape at Neom in Saudi Arabia.
Tunnels are core components of the integrated transportation network at Neom's The Line, Oxagon and Trojena developments.
According to regional projects tracker MEED Projects, about $6.9bn-worth of schemes with tunnel components are at the pre-execution and execution phases at Neom.
Tunnel projects worth over $4.6bn are in the execution phase. These include the backbone infrastructure tunnels for The Line project, which involve constructing two railway tunnels in parallel using the drill-and-blast method, one for passengers and the other for goods.
In June 2022, Neom awarded $2.7bn-worth of main contracts to the joint venture of Shibh al-Jazira Contracting, China State Construction Engineering and FCC Construction for lots two and three of this scheme.
A separate contract worth about $1.8bn was awarded by Neom for lots four and five to a team of Archirodon, Samsung Engineering and Hyundai Engineering.
The pipeline of projects with tunnel components at Neom is worth about $2.3bn. Some of the major upcoming projects include the time-travel tunnel and funicular railway at Trojena and a package of works for the Spine railway network at The Line. The main contract bids for both packages are in the evaluation phase.
Other upcoming projects include the Spine's desert coastal west cut-and-cover tunnels for The Line, which are under design, and packages one and two of the delta junction tunnel at Oxagon. Neom expects to receive the bids for both packages by 27 August.
Dubai Deep Tunnels Portfolio
In Dubai, meanwhile, the Deep Tunnels Portfolio includes a series of interconnected deep sewage tunnels and associated facilities. The project involves the construction of two sets of deep tunnels terminating at two pump stations located at sewerage treatment plants (STPs) in Warsan and Jebel Ali.
A conventional sewage and drainage collection system and STPs will be built in Hatta.
First announced in 2015, the Dubai Deep Tunnels Portfolio project has faced delays over the years. The tender for consultancy services was first issued in 2015 and was awarded the following year to US-headquartered Parsons.
In June 2017, Dubai Municipality appointed Dutch consulting firm KPMG to assist with preparing the project under a public-private partnership (PPP) model instead of the conventional engineering, procurement and construction model.
There was no significant progress on the project after Dubai Municipality conducted a geotechnical investigation in late 2017.
This changed in June of this year, however, when Dubai’s Executive Council approved the project and said it would require an investment of about AED80bn ($22bn).
It added that the project has been designed to serve the needs of the Dubai population for the next 100 years, in alignment with the Dubai Economic Agenda D33 and the Dubai Urban Plan 2040.
In August, Dubai Municipality invited firms to express interest in bidding for the contract to provide project management consultancy services for the scheme. It expects to receive prequalification applications by 25 August.
Jeddah stormwater system
Jeddah Municipality is also taking steps to improve the city’s water infrastructure, and is investing in stormwater drainage and management systems.
The latest project under this programme is the King Abdullah Road-Falasteen Road (Kafa) tunnel, which is being developed in two phases. Phase one involves the construction of two main storage tunnels, one 5.3 kilometres (km) long and the other 3.4km long.
The scope of phase two includes constructing a terminal pumping station, a marine outfall and all necessary online and offline shafts.
In March, Jeddah Municipality invited contractors to prequalify for the contract to build the tunnels. It is understood the client received responses to the request for qualifications in June.
US-based Aecom is the consultant for the project.
Morocco's undersea rail link
In June this year, the Spanish government revived the Morocco-to-Spain undersea rail link project after allocating about $2.5m for a renewed design study.
The project was launched in 2003 but was put on hold after the 2008 financial crisis. It has undergone several rounds of feasibility studies but remains in the study stage after nearly two decades of funding-linked delays.
The plans involve a double-rail track and additional service line stretching 38.5km between Tarifa in Spain and Tangier in Morocco. A 28km section will run under the Mediterranean Sea at a maximum depth of 475 metres.
The maximum depth of the tunnels will be 300 metres. Each single-track tunnel will have an inner diameter of 7.9 metres, while the service gallery will be 6 metres in diameter.
The two countries are developing the project jointly through Morocco’s National Society for Strait of Gibraltar Studies and the Sociedad Espanola de Estudios para the Comunicacion Fija a Traves del Estrecho de Gibraltar.
In 2006, Swiss engineering company Lombardi Engineering was selected to design the tunnel and the preliminary studies for the project were completed two years later.
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Tender 3 covers mechanical tie-ins to connect four wells at the Nafoura field to existing infrastructure: G-322, G-332, K-10 and K-11.
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Tender 4 is also for four mechanical well tie-ins at the Nafoura field: G-315/51, K-12/51, K-13/51 and Y-651.
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Tender 6 is for flowline well tie-ins at the Messla and Majid fields. Flowlines from wells VV-7/65 and VV-6/65 at Messla will be tied in, along with the flowline from well Z-8HR/80 at Majid.
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Increasing interest
International oil companies are showing increased interest in oil and gas assets in North Africa as the Strait of Hormuz crisis continues to erode the appeal of investing in some of the Middle East’s biggest oil and gas producers.
Over recent months, the chief executive of the Italian oil company Eni, Claudio Descalzi, said the company plans to drill 230 new oil and gas wells in Egypt in an effort to increase production in the country.
The US oil and gas company Chevron also signed a production sharing agreement with Libya’s National Oil Corporation for onshore Block S4, which covers an area in the Sirte Basin.
In addition, companies that have been engaging in recent talks focused on expanding their presence in North Africa include France’s TotalEnergies and US-based ConocoPhillips, as well as London-headquartered Shell and BP.
The uptick in interest in North African oil and gas assets comes amid continued disruption to shipping through the Strait of Hormuz, a key export route for some of the Middle East’s biggest oil and gas exporters.
Flows through the Strait have been disrupted by a regional war that was triggered by US and Israeli attacks on Iran on 28 February.
Countries negatively impacted by the disruption include Kuwait, Iraq, Saudi Arabia, the UAE and Qatar.
Amid the ongoing disruption to oil and gas exports from these countries, some North African officials have promoted their oil and gas sectors as reliable alternative suppliers.
In August, Libya’s Oil and Gas Minister Khalifa Abdel Sadig told a conference in Norway that Libya could be a “key player in providing energy security solutions” to the European Union.
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Rabigh 2 IPP expansion secures $2.58bn financing5 October 2026
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In a disclosure to the Saudi Exchange, Acwa said it had secured SR9.69bn ($2.58bn) in long-term financing for the project, which has a generation capacity of 2,313.5MW.
In April, MEED reported that Acwa and Saudi Energy (formerly Saudi Electricity Company) had signed a 31-year power purchase agreement (PPA) with Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), for the project.
The project involves developing a CCGT plant in the Mecca region. It is being developed by Al-Morjan Two Electricity Company, with Acwa and Saudi Energy each owning a 40% stake in the project.
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Rabigh 1 extension
In January, Saudi Energy announced a separate energy conversion agreement with SPPC for the purchase of electricity from the Rabigh 1 power plant expansion.
The contract is valued at SR5.33bn ($1.42bn).
It covers the development, financing, construction, ownership and operation of the gas-fired power plant, which will have a generation capacity of 1,179MW.
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Dubai announces $490m e-commerce hub expansion plan5 October 2026
Dubai CommerCity has launched a second expansion phase valued at more than AED1.8bn ($490m), adding over 91,000 square metres (sq m) of office, retail and logistics space across the free zone’s business, social and logistics clusters.
Dubai CommerCity is a joint venture of Dubai Airport Free Zone Authority (Dafza) and Dubai government-owned Wasl Asset Management Group.
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Iraq and Turkiye discuss oil and gas deal5 October 2026
Iraq and Turkiye have opened talks in Ankara on a framework agreement for oil, gas and energy cooperation, according to a statement from the Iraqi Oil Ministry.
Iraq’s Oil Minister Bassem Mohammed Khudair Al-Abadi led the Iraqi side, while the Turkish Energy and Natural Resources Minister Alparslan Bayraktar led the Turkish side.
Officials discussed a proposed roadmap to deepen work on oil and gas infrastructure, petrochemicals, and trade in oil, gas and power.
Discussions about a future long-term deal to govern the Iraq-Turkiye Pipeline (ITP) were central to the talks.
The ITP exports oil from northern Iraq to the port of Ceyhan in Turkiye.
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Before the temporary agreement was signed, the previous deal governing oil exports through the pipeline was due to expire on 27 July.
Speaking last month, Ali Al-Shatri, director general of Iraq’s state organisation for marketing oil (Somo), said the temporary deal was “a prelude” to a much bigger agreement.
As well as governing pipeline exports, the new agreement is expected to cover electricity, chemicals and gas deals as well as the construction of a new oil refinery in Ceyhan.
Under current plans, the new refinery will process Iraqi crude in order to produce refined products that can be exported to Europe.
Bayraktar said: “Following the crude oil transportation agreement signed between our national company … we are clarifying our roadmap for a new, longer-term and more comprehensive agreement.
“In this regard, we plan to activate our joint working groups to rapidly finalise oil and natural gas infrastructure, exploration and production, oil trading, refining-petrochemical and electricity projects.
“In close cooperation with the new Iraqi Government, we will strongly continue to implement these concrete projects for the stability and prosperity of our shared geography.”
Bayraktar said it was important to consider extending the Kirkuk-Ceyhan pipeline to reach Basra in southern Iraq.
He also said it was important to consider expanding the capacity of the ITP to create a strong alternative to the Strait of Hormuz.
The Strait of Hormuz is a key oil export route that has been disrupted by a regional war since the US and Israel attacked Iran on 28 February.
Bayraktar also said that he wanted state-owned Turkish Petroleum Corporation (TPAO) to expand its footprint in Iraq.
He said: “We aim for our national company TPAO to play an active role not only in the Kirkuk fields but also in different fields in Iraq, to reach the target of supplying one million barrels of crude oil as stated by Iraqi Prime Minister Ali ez-Zeydi; and to transform Ceyhan into a global energy hub by increasing trade volume.”
Bayraktar said that Turkiye wanted energy to be a key part of the plan for a north-south trade corridor from the Grand Faw Port to the Turkish border.
Under current plans, the corridor will combine a new railway and highway system.
Bayraktar said that Turkiye also wants the route to include oil and gas pipelines as well as electricity transmission lines.
READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDFIndustry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.
Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
> AGENDA: Oxagon takes centre stage at Neom> MARKET FOCUS: Saudi projects hold steady> INDUSTRY REPORT: MEED’s 2026 GCC power developer ranking> LEADERSHIP: The future city does not need to hang above the groundTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/20268590/main.jpg -
RTCC/Ictas wins $214m King Salman airport private aviation terminal5 October 2026

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Saudi Arabia’s King Salman International Airport Development Company (KSIADC) has awarded an estimated SR800m ($214m) construction contract to build the private aviation terminal.
The contract was awarded to a joint venture of Riyadh-based Al-Rashid Trading & Contracting (RTCC) and Turkiye’s IC Ictas.
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Project scale
The project covers an area of about 57 square kilometres (sq km), allowing for six parallel runways, and will include the existing terminals at King Khalid International airport. It will also include 12 sq km of airport support facilities, residential and recreational facilities, retail outlets and other logistics real estate.
The airport aims to accommodate up to 100 million passengers by 2030. The cargo target is to process 2 million tonnes a year by 2030.
Saudi Arabia plans to invest significantly in its aviation sector. Riyadh’s Saudi Aviation Strategy, announced by Gaca, aims to triple Saudi Arabia’s annual passenger traffic to 330 million travellers by 2030.
It also aims to increase air cargo traffic to 4.5 million tonnes and raise the country’s total air connections to more than 250 destinations.
MEED’s October 2026 report on Saudi Arabia includes:
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> ECONOMY: Conflict bolsters case for Saudi economic diversification
> BANKING: Saudi lenders readjust to lower lending and deposit climate
> UPSTREAM: Aramco upstream spending gathers pace
> DOWNSTREAM: Sabic steps up Saudi petchems investment
> POWER: Saudi Arabia’s power award activity slows
> WATER: Saudi water sector hits sharp slowdown
> CONSTRUCTION: Saudi construction defies the headwinds
> TRANSPORT: Saudi infrastructure pushes forward amid conflict
> DATABANK: Saudi data indicates project spending shiftTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/20268414/main.jpeg