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Winning numbers

by Michael Fahy on Feb 25, 2013


King Abdullah Financial District  in Riyadh.
King Abdullah Financial District in Riyadh.

Saudi Arabia’s construction sector saw $62.7bn worth of new contracts awarded in 2012. Michael Fahy casts his eye over a new report which spells out who picked up the lion’s share of the spoils.

The value of new construction contract awards in Saudi Arabia rebounded strongly during the fourth quarter of 2012 to reach $18.4bn, according to National Commercial Bank (NCB).

Total contract awards for 2012 were $62.7bn (SR235.1bn), which was around 13% lower than the $72bn (SR270bn) worth awarded during 2011.

Despite this, NCB said certain sectors witnessed “unprecedented” levels of activity, including the power, petrochemicals, healthcare and roads sectors.

“In the fourth quarter alone, the contracts awarded in oil & gas sector amounted to approximately SR26bn ($6.9bn), while the power sector accounted for another SR16bn ($4.26bn).”

The most active sectors for new contract awards for the whole of 2012 were petrochemicals and power, where $12.59bn (SR47.2bn) and $12.56bn (SR47.1bn) of new deals were awarded respectively.

Some 93% of the $12.58bn worth of petrochemical contracts awarded came from three organisations - Petro Rabigh (32%), Kemya (34%) and Sadara Chemical Co (27%). The bulk of these are expected to take between two and four years to complete.

“While Korean and Chinese contractors continued their heavy involvement (in the sector), Spain’s Tecnicas Reunidas led all others in contract awards, most notably for its involvement in Sadara and Kemya’s projects.”

The Spanish firm pocked a total of six contracts in the sector with a combined value of approximately $2.8bn, while Korean company Daelim won five deals worth $2.6bn. GS Engineering & Construction picked up three projects worth $1.4bn.

The bulk of the power projects, unsurprisingly, were awarded by Saudi Electricity Company and by the Saline Water Conversion Company for its massive desalination plants.

SSEM and ABB won the most power contracts - 12 and 10 respectively. SSEM’s 12 deals were worth $640m (SR: 2.4bn) and ABB’s around $690m (SR: 2.6bn).

However, in terms of project values Korean giants Hyundai and Samsung topped the tree. The biggest single contract award during the last quarter worth $3.2bn (SR 12bn) went to Hyundai and Mitsubishi to build the new Jeddah South thermal power plant.

Hyundai’s element of this win, plus two other contracts, took its total awards from the power sector in Saudi Arabia last year to $3.76bn (SR14.1bn).

The other major sectors for contract awards were oil & gas ($7.95bn), industrial ($4.75bn) and transport projects ($2.56bn).

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