Are contractors ready to build Saudi Arabia’s future infrastructure?
The pace of development shows no signs of slowing down in Saudi, which looks set to present new types of projects for construction contractors, Neha Bhatia reports
Saudi Arabia is often touted as one of the Gulf’s largest construction markets, and the label is not an exaggeration.
For example, the kingdom is second only to the UAE in terms of the number of contract awards expected in the region this year.
The UAE is expected to account for a third of all construction contract awards in 2018, with Saudi Arabia expected to achieve a 27% share, according to a white paper published last month by Dubai research house, Ventures Onsite.
The kingdom’s construction priorities have become apparent in the past few weeks, during which time HRH Prince Mohammed bin Salman bin Abdulaziz, Saudi Arabia’s Crown Prince, Vice President of the Council of Ministers, and Minister of Defense, has struck deals with various international companies to spur economic diversification and growth in the country.
There is no doubt that the projects borne out of these collaborations will keep regional – and international – construction contractors extremely busy for a while.
Most notable among these programmes are those focused on expanding business sectors in the country, and on creating new ones.
For example, the world’s largest solar park will be developed in Saudi Arabia following the signing of a memorandum of understanding (MoU) between the kingdom’s Public Investment Fund (PIF) and Japanese conglomerate, Softbank.
According to a Bloomberg report, cited by Arabian Business, the Solar Power Project 2030 development is valued at $200bn (SAR7.5bn).
The MoU is part of Saudi Arabia’s endeavour to develop its solar energy sector, with a new company set to be established to focus on the industry.
Two solar plants, with capacities of 4.2 gigawatts (GW) and 3GW, will be launched by 2019 as part of the agreement.
Solar panels for the plants will be developed and manufactured in the kingdom, Saudi’s state news agency, SPA, reported. Feasibility studies will be completed by May 2018, with the projects expected to create 100,000 jobs in the kingdom.
Solar Power Project 2030 is significant in its own right, but it is by no means the only large-scale scheme in Saudi Arabia’s pipeline.
Days after he signed the MoU with Softbank, Saudi Arabia’s Crown Prince met with Richard Branson, founder of Virgin Group, during a visit to the Virgin Galactic Company in California, US.
According to SPA, Branson and the Crown Prince reviewed areas of investment partnership and the development existing opportunities.
“We [are] looking forward to advancing the relationship between Saudi Arabia and Virgin Hyperloop One while we develop innovative transport technologies like hyperloop, accelerating Vision 2030 objectives to transform the kingdom from a technology consumer to a technology innovator,” the Crown Prince said, according to the National.
The future is clearly Saudi Arabia’s focus, and this forward thinking is also helping to develop new sectors in the country.
On 5 April, it was reported that PIF had signed an agreement to open a Six Flags-branded theme park in the country.
The project will be part of the Qiddiya project, the kingdom’s new entertainment destination located southwest of Riyadh, and will open in 2022, Saudi Arabia’s press agency confirmed. The Six Flags-branded amusement park will be the country’s first entertainment, sports, and cultural destination.
PIF’s agreement with Six Flags is in line with the kingdom’s Vision 2030 aims of diversifying the country’s economy, promoting culture locally, and developing an entertainment ecosystem.
Commenting on the agreement, chief executive officer of Qiddiya, Michael Reininger, said: “By partnering with a global leader in this sector, we know that we are going to deliver something exceptional that will enrich the daily lives of those living here.”
The solar park, hyperloop, and the Six Flags theme park are sizeable schemes even as independent, standalone developments, but when viewed within Saudi Arabia’s contemporary investment climate, all three point in one direction: towards a future that promises long-term economic, environmental, and social sustainability for one of the Gulf’s largest consumers of construction services.