The Saudi Arabia Construction Projects

Market
Analysis of market potential

May 2019
Prepared by Ed James
Director of Content & Analysis, MEED Projects
Edward.james@meed.com

© 2013 MEED Insight

Saudi Arabia is by far the largest projects market in the GCC, both in terms of historical and future project values. This
reflects its position as the Arab World’s biggest economy.

The kingdom’s sheer geographical size, large population and extensive oil and gas output also gives the most diverse of
all the region’s projects market, ensuring that it has opportunities across all sectors. It is for these reasons that Saudi
Arabia consistently remains the most important and top priority market for most international companies.

Future developments in the market will be guided by the framework set out in the Saudi Arabia 2030 Vision which
envisages hundreds of billions of dollars being invested in transforming the economy through the development of
massive new tourism, mixed-use and leisure developments across the kingdom.

The largest of these is the $500bn Neom gigaproject which involves the creation of a new city in the northwest of the
country. Work on this and other key developments such as Qiddiya, the Red Sea Tourism Project and Amaala are
already under way and will only accelerate in the coming five years.

With the largest projects pipeline in the GCC, worth more than $1.1bn, Saudi Arabia is set to maintain its position as the
leading market in region. The sheer scale and breadth of opportunities make it a market that no one can afford to miss

This report provides an example of some of the key future project opportunities in the state as well as some data on the
overall size of the market. It has been prepared by MEED Projects, the region’s leading projects tracking service. To
learn more, please visit www.MEEDProjects.com, email helpdesk@meed.com, or call +9714 8180318

© 2013 MEED Insight

 Market size

Indeed, this is already being seen in the construction and transport sectors as contract awards have grown from $11.2bn in
2016 to $14.6bn in 2018. Higher oil prices have supported this increase in spending, but the government’s 2030 Vision for a
wholesale reform of the kingdom’s economy by investment in mixed-use, leisure, tourism and transportation projects is the
main driver for this and future project expenditure
Value of construction and civil infrastructure contracts awarded in the GCC, 2016-18 ($m)*
40.000

35.000

30.000

25.000

20.000

15.000

10.000

5.000

0
Bahrain Kuwait Oman Saudi Arabia UAE
2016 2017 2018

3 Source: MEED Projects © 2014 MEED Projects

 Key drivers

Higher oil prices in 2018 helped spur accelerating real economic growth in Saudi Arabia to a healthy 2.2%.With higher
revenues on the back of an improved oil price which hit $72 a barrel average last year, the government announced in
December a record budget of SR1.12 trillion equivalent to $302bn.
Much of this budgeted expenditure will be spent on the government’s infrastructure plans in line with the Saudi Arabia
2030 Vision. Key projects as part of this strategy include the $500bn Neom ‘gigaproject’ and other key mixed-use
developments like Qiddiya, Amaala, and the Red Sea tourism project
Saudi Arabia budget, 2010-19 (SAR bn) Saudi Arabia key economic indicators,
1.400 2019
Nominal GDP ($bn), 2018 782.5
1.200 Real GDP growth, 2018 (%) 2.2
Real GDP growth, 2019f (%) 1.8
1.000
Non-oil real GDP growth, 2019f
800 (%) 2.1
Oil real GDP growth, 2019f (%) 2.8
600 Fiscal Breakeven Oil Price
($/barrel) 73.3
400
Government debt (% of GDP) 23.7
200 Current account balance (%/GDP) 3.5
Official Reserves ($bn) 349.4
0 CPI inflation (%) -0.7
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Unemployment rate (% of total
Revenues Expenditure labour force) 5.4
Sources: IMF; Gov

4
 2018 selected KSA construction contract awards

Project Value ($m)

Aramco Bahri Lamprell HHI - KSIMC: Package 6 1,100
Aramco Bahri Lamprell HHI - KSIMC: Package 5 1,100
Aramco Bahri Lamprell HHI - KSIMC: Package 4 1,100
PIF - Sharma Complex : Royal Residential Buildings (Package 2) 1,000
MOH - East Gate 960 Hundreds of construction
PIF - Sharma Complex : Royal Residential Buildings (Package 3) 500 contracts were awarded last year
PIF - Sharma Complex : Royal Residential Buildings (Infrastructure in Saudi Arabia ranging from
Works) 500 hospitals and schools to palaces
Saudi Aramco - Ajyal Site Development in South Dhahran (Phase 2) 300 and ports.
Al Akaria - Al Widyan Development: Infrastructure 292
One of the reasons why Saudi
Alandalus Property/Sulaiman Al Habib Medical :Sulaiman Al Habib
Medical Center 250 Arabia is the number one target
Jeddah Municipality - Jeddah Waterfront and Corniche Development: market for many companies is
Phase 7 & 8 240 the sheer diversity of projects it
Ministry of Housing - 997 villas in South Dammam 180 offers.
Kingdom Holding - Jeddah Economic City : Infrastructure Works 165 Unlike some other markets in the
Saudi Aramco - Labor Accommodation and Supporting Facilities Zone GCC, the kingdom has the
F1 (Package 8) 160 broadest mix of project
Abha Private Hospital - Abha Private Hospital (300 Beds) 160 opportunities thanks to its size
MOH - Saudi Housing Project: Rabeyet Al Sharq Housing Complex 150 and wealth.
Al Madina Al Munawarah Development Authority - Wadi Al Aqeeq
Rehabilitation 133
Ministry of Finance - Expansion of Cargo Area of Salwa Port 128
MODON - Link Roads for Second & Third Industrial Cities in Jeddah 128
MOH - Al Majmaah Hospital (300 beds) 124
Source: MEED Projects
5
 Top construction clients
The construction market in Saudi Arabia tends to be dominated by government or quasi-government organisations. The
leading client currently in terms of work under execution is the organisation responsible for the modernisation and
expansion of the Grand Mosque in Mecca. The Ministry of Interior is in second place by virtue of its nationwide house
building and security complexes programme, while the third-ranked client is the ADA, responsible for the $20bn-plus
Riyadh metro project
KSA selected top construction and infrastructure clients by value of work under execution ($m)
0 5.000 10.000 15.000 20.000 25.000 30.000
General Presidency for Grand Mosque and Prophet Mosque…
Saudi Arabia Ministry of Interior
ArRiyadh Development Authority
Saudi Aramco
Saudi Arabia Ministry of Education
Saudi Arabia Ministry of Transport
Saudi Arabia Ministry of Housing
Royal Commission for Jubail & Yanbu
Saudi Public Investment Fund
Arabian Centres
Saudi Arabia Ministry of Health
Umm Al Qura for Development & Construction
Saudi Arabia General Authority for Civil Aviation
Jabal Omar Development Company
Jeddah Economic Company
Private Developer
Raidah Investment Company
Saudi Arabia National Guard Health Affairs
Saudi Arabia Ministry of Defense & Aviation
Saudi Arabia Ministry of Finance

Source: MEED Projects

6
 Top contractors

There are many capable and experienced local contractors in Saudi Arabia as evidenced by the top four positions below
of the leading contractors in the kingdom. But opportunities abound for companies from around the world. Sepco of
China, Germany’s Siemens, Bechtel from the US and FCC of Spain are all examples of leading firms from around the
world who have more than $1bn of contracts in hand in the country.
KSA selected top construction and infrastructure contractors by value of work under execution ($m)

0 5.000 10.000 15.000 20.000 25.000 30.000 35.000

Saudi Binladin Group
ABV Rock Group
El Seif Engineering Contracting
Nesma & Partners
SEPCO
Al Arrab Contracting Co.
Beijing Emirates International Construction Co
Joannou & Paraskevaides
Almabani / CCC / Bechtel JV
Bechtel Corporation
Consolidated Contractors
Siemens
Al Rashid Trading & Contracting
Fare Construction
Al Ayuni Investment & Contracting
Saudi Arabian Baytur Construction Co.
Al Bawani
Azmeel Contracting
Saudi Construction Development Company
FCC Construction

Source: MEED Projects

7
 Future pipeline

Saudi Arabia has more than $1.15 trillion work of future projects in the pipeline, making it by far the largest market of all
the GCC states. The biggest future sector by large margin is construction, highlighting the huge amount of construction
work planned in the kingdom. In total, the construction and transport sectors have more than $825bn of known planned
an un-awarded projects.

Value of future KSA planned and un-awarded contracts by sector ($m)

675.741

249.736

136.883

41.982

21.789
16.562 16.376
12.014

Chemical Construction Gas Industrial Oil Power Transport Water

Source: MEED Projects * Graph is based on a logarithmic scale for ease of visualisation
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 Future selected KSA projects

There are hundreds of future construction and civil infrastructure contracts across Saudi Arabia, the largest of which are
highlighted in the below table. They range from metros and high-speed railways to the world’s largest park and tourism
development.

Project Value ($m)

SRO - Riyadh Dammam High-Speed Rail 14,000
Jeddah Metro Company - Jeddah Public Transportation Program (JPTP) 12,400
GACA - KAIA: Phase 2 10,000
Makkah Region Development Authority - Al Faisaliah City 10,000
GACA - KAIA: Phase 3 10,000
ADA - King Salman International Park 10,000
PIF - Red Sea Tourism Project 9,605
Eastern Province Municipality - Dammam Metro 9,000
Jeddah Metro Company - Jeddah Metro: Orange & Blue Lines 8,000
SAR - Saudi Landbridge 7,000
JDURC - Murooj Jeddah (Wadi Al Asla) 5,500
Taif Municipality - Taif Public Transport Network 5,000
PIF - New Jeddah Downtown 4,800
SRO - Yanbu Jeddah Jizan and Taif Khamis Mushayt Abha Railway 4,200
MMRTC - Mecca Metro: Line D 4,000
Qiddiya - The Qiddiya Project (Entertainment City) 4,000
MOT - King Hamad Causeway 4,000
MMRTC - Mecca Metro: Line A 4,000
MMRTC - Mecca Metro: Phase 1 (Lines B, C): Part 1: Package 3 (SYS) 3,547
Jeddah Metro Company - Jeddah Metro: Red Line 3,500
Source: MEED Projects
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 Some active current projects

1010 © 2013 MEED Insight

 King Hamad Causeway

11
 Neom

12
 Qiddiya

13
 KAAR Gateway

14
 Red Sea Tourism Project

15
© 2013 MEED Insight