Saudi Arabia's top 10 projects under construction in 2018
With iconic projects like Riyadh Metro and Jeddah Tower to master-planned schemes such as Neom and the Security Forces Medical Cities, Saudi construction is on the up in 2018
Thanks to its diversification investments, Saudi Arabia has seen a selection of large-scale projects launched and progressing this year.
As the country looks to expand its existing economic sectors and create new ones, both the public and private sectors are driving major schemes in the kingdom.
The kingdom is second only to the UAE in terms of the number of contract awards expected in the region this year, with Saudi Arabia expected to achieve 27% of all regional construction contracts in 2018, according to a white paper published last month by Dubai research house, Ventures Onsite.
In the following article, Construction Week rounds up the top 10 projects that are being constructed, or due to begin development, in the kingdom this year.
1. Riyadh Metro
Undoubtedly one of Saudi’s largest and most high-profile construction schemes, Riyadh Metro is recording steady progress in 2018.
This June, test runs began for Riyadh Metro's Line 4. French transport system provider Alstom revealed it has been conducting initial dynamic tests for the megaproject's Line 4 Depot Test Track, on which the FAST Consortium is working.
Bids to name 10 of Riyadh Metro's 85 stations were said to have reached Arriyadh Development Authority (ADA), the project’s developer, this April.
Local Arabic-language daily, Al Eqtisadiah, reported that the ADA was analysing the offers. Out of the 85 stations of the Riyadh Metro system, 15 were eligible for national and international companies to bid on, with only 10 will be awarded naming rights by ADA.
In January, Tecon Specialized Engineering Solutions (TSES), a UAE-headquartered sub-contracting specialist, revealed it had won work on the major transportation project.
Naveed Ansari, chief executive officer of TSES, told Construction Week: “We have been picked to provide emergency lighting services for three of the project’s lines.
“The contract is worth $6.7m (SAR25m), and we have started working on it.”
2. Qiddiya entertainment city
Earlier this year, a ceremony was held to lay the foundation stone for Saudi Arabia's entertainment megaproject, the Qiddiya city. The 334km2 project – to be built 40km from capital city, Riyadh – is 100 times the size of Central Park, and will attract 17 million visitors by 2030.
Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, patronised the project's foundation ceremony on 28 April, 2018.
Michael Reininger, chief executive officer (CEO) of the project, said the development would feature facilities such as amusement parks, game cities, racing fields, and safaris.
Additional planned facilities include toy cities, recreation centres and sports facilities, training academies, desert and asphalt tracks for motor sports enthusiasts, water and snow recreation activities, outdoor adventure spaces, and safari and nature experiences, as well as historical, cultural and scientific activities.
Qiddiya will also include shopping centres, restaurants, cafés, hotels, and real estate projects. The development will be based on five major themes, including parks and attractions, mobility, nature and the environment, sports, and health, culture, arts, and education.
At the time of its launch, Saudi Arabia’s press agency said Qiddiya would target the seven million people that are based 40km from the project site, creating an "untapped market" for international investors.
Qiddiya is one of three major projects that the Public Investment Fund (PIF) is developing under the leadership of its chairman, HRH Prince Mohammed bin Salman bin Abdulaziz Al Saud, the Crown Prince, Vice President of the Council of Ministers, and Minister of Defense of Saudi Arabia. Other developments include the Red Sea tourism development, and Neom, a mega-city driven by innovation.
This May, the project was established as a closed joint-stock company. On this development, Reininger commented: “Incorporation is a key milestone as we move from planning to performance.
“As a fully independent entity, we will draft our own budget and re-commit ourselves to our responsibilities, as we move forward with this project that has the potential to enrich the lives of all Saudis.”
Saudi Arabia’s brand-new $500bn (SAR1.9tn) mega-city, Neom, is also said to have made progress this year.
Contracts for palaces to be built as part of the massive Neom development in Saudi Arabia have been awarded, it was reported this February.
The palaces for the King, Crown Prince, and other senior royals will be located on the Red Sea coast 150km west of Tabuk city, according to Reuters. Saudi Binladin Group (SBG), one of the kingdom’s most high-profile contractors, was said to have won the government contracts.
Banks have started offering financing facilities to builders of the palaces, but an official cost has yet to be revealed, the report stated. The report stated that some companies, including Japan's Softbank, were prepared to invest in Neom.
Neom was introduced at the Future Investment Initiative conference in Riyadh by Saudi Crown Prince Mohammed bin Salman. The project includes the construction of a bridge spanning the Red Sea, connecting the proposed city to Egypt and the rest of Africa. The area will also stretch into Jordan.
Softbank, which is said to be one of Neom's investors, is also involved with Saudi Arabia’s PIF in the development of what will be the world’s largest solar park upon completion. A memorandum of understanding (MoU) was signed this March to develop Solar Power Project 2030 in Saudi Arabia. The deal came during the Crown Prince’s visit to the US, where he signed the MoU with Softbank's group chairman and chief executive officer, Masayoshi Son.
According to a Bloomberg report, the development is worth $200bn (SAR7.5bn). The MoU is part of Saudi'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 a capacity of 3 gigawatts (GW) and 4.2GW 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 for the project were due to complete by May 2018, with the projects expected to create 100,000 jobs in the kingdom.
4. Jeddah Tower
Another prominent construction scheme in Saudi Arabia, the 1km Jeddah Tower has also recorded progress in 2018.
Between January and March this year, three key updates were revealed about the tower. In January, a contract was awarded to begin infrastructure works for Jeddah Tower and Jeddah Economic City. Al Fouzan Trading and General Construction Company won the $165.3m (SAR620m) contract, and is expected to complete its work within 12 months.
The infra works contract was signed by Eng Talal Almaiman, chief executive officer of Kingdom Holding Company (KHC), and board member of Jeddah Economic City (JEC). Commenting on the project, Mounib Hammoud, chief executive officer of JEC, said: “The works are going according to the set time-frame and soon, plots of land will be available and ready for development by local [and] international investors with all support services and utilities.”
In February, Reuters reported that construction on the project had reached the 63rd floor, with shelling and cladding work to be completed next year. According to the report, Hammoud added: "We have faced delays. In projects of this magnitude you always have delays – I hope we'll recover the delays we've had. We will be open for business by 2020, hopefully.”
Hammoud added that construction on the project would continue despite Saudi Arabia's purge last year to crackdown on corruption. The allegations saw the detention of several businessmen, including investors in the project.
JEC is owned by Saudi investors including Kingdom Holding Co, which has a 33% stake, and construction giant Saudi Binladin Group, which has 16.6% and is the project's main contractor, were both impacted by the corruption purge, according to the report.
Orange Business Services signed a smart city consulting agreement with JEC for the skyscraper this March.
Under the agreement, Orange will create a blueprint for the ICTinfrastructure of the 1km-tall tower. The scope will extend from the planning and design phases up to construction and operations, the consultancy said in a statement. Commenting on the deal, Hammoud said: “The implementation of the smart city components is considered as an essential step [towards the delivery of] an environmentally friendly [and] self-sustainable project.”
5. The Avenues Riyadh
The Avenues Riyadh is one of developer Shomoul’s projects in the kingdom. Following on The Avenues in Kuwait, the $3.46bn (SAR13bn) retail facility has a leasable area of 40ha, and overlooks King Salman Road and King Fahd Road.
In May, Italian contractor Salini Impregilo revealed it had been prequalified to work on Phase 1 of the project.
In a statement, Salini Impregilo revealed it was prequalified for The Avenues in Riyadh at an estimated value of $1bn (SAR3.75bn).
The Avenues Riyadh will consist of a number of towers that include a four- and a five-star hotel, residential apartments, offices, and parking for 18,000 vehicles. The facility will be divided across districts such as Prestige, Grand Avenue, The Souk, The Mall, Electra, Oasis, and Grand Plaza.
CallisonRTKL is working as the project’s lead designer. According to its website, the mall’s restaurants, boutiques, and major retailers are linked along a 600m air-conditioned retail “street” and a grand plaza, accompanying a three-storey feature tower with a 360º multimedia screen located at the heart of the mall.
6. Saudi Aramco-Total complex
Work on Saudi Aramco’s petrochemicals complex in Jubail with French oil giant, Total, will begin in Q3 2018.
A memorandum of understanding (MoU) was signed by both companies this April for the project, which is worth $5bn (SAR18.75bn). Front-end engineering and design (FEED) work is due to commence in Q3.
The complex will comprise a mixed-feed steam cracker that will feed other petrochemical and specialty chemical plants, thus representing an additional $4bn (SAR15bn) worth of investment by third-party investors.
In addition to the $9bn (SAR33.75bn) invested in total, up to 8,000 direct and indirect jobs will be created through the complex, which is expected to produce 2.45 million tonnes (2.7 million tons) of chemicals.
Aramco and Total's MoU was signed during a visit to Paris by Crown Prince HRH Prince Mohammed bin Salman bin Abdulaziz, Saudi's state news agency, SPA, reported.
7. Security Forces Medical Cities
Saudi Arabia’s Ministry of Interior is developing two Security Forces Medical Cities in Riyadh and Jeddah. Updates about the Riyadh facility have been revealed in 2018.
This March, the Saudi Arabian subsidiary of Finnish Peikko Group, AI Rashed Peikko, announced that it was supplying an order for a hospital and residential area at the Security Forces Medical Centre in Riyadh, Saudi Arabia.
The order comprises more than 500,000 pieces of Armata punching reinforcement, 6,000 pieces of HPKM column shoes and HPM anchor bolts, and 17km of Deltabeam composite beams and other fastening products.
Peikko’s deliveries for the project started in December 2017 and will continue through to 2018, with project completion expected in 2019.
P&T Architects & Engineers was appointed to undertake the architectural and structural design of the project, while ABV Rock Group is handling the main contract.
Linesight was picked by main contractor ABV to deliver cost management consulting for the development. On its website, Linesight outlines its early work for the project, and the variations that it had to manage for the scheme.
“Before our engagement, and following the announcement of the winning tender, the client decided to move the entire project from the original site to a new location, with different ground conditions and site layout,” Linesight’s website explains.
“It was at this point that Linesight came on board and was tasked with overseeing the many variations that resulted from this move. This necessitated a complete revision of previous assumptions from the tender stage, as well as a complete re-measure, rate revision and cross-check exercise. In turn, this facilitated the provision of a full report on the cost of each building to ensure the quantity and cost provided by ABV at tender stage was accurate and sufficient.”
Manens-Tifs is the project’s main consultant. The precast elements of the project will be manufactured by three companies, including Al Rashid Abetong, Rabiah-Nassar & Zamil concrete industries, and RDB El Seif Limited.
8. Solar-powered desal plant
King Abdullah Economic City (KAEC) is set to house a desalination plant that will open in 2020.
This March, KAEC and Metito broke ground on the solar-powered seawater desalination plant in Saudi Arabia. KAEC signed a contract, valued at $59m (SAR220m), with Metito in February for the design and construction of the desalination plant.
The seawater treatment and desalination plant will have an initial daily production capacity of 30,000m3 of drinking water, which can later on be raised to 60,000m3.
The development period of the project is 24 months, with a plan in place to start production in Q1 2020. Ibrahim Linjawy, deputy group chief executive officer (CEO) of KAEC ,and Mutaz Ghandour, chairman and CEO of Metito, laid the foundation stone for the seawater desalination plant.
They were joined by representatives from both parties and members of the project management team, Saudi Gazette reported.
9. US-Saudi consortium’s affordable homes
This March, Saudi Arabian General Investment Authority (SAGIA) awarded a multibillion-dollar license to a consortium of US and Saudi Arabian leaders to build affordable homes in Riyadh.
Chicago-based consortium Global Business Ventures received a license to build 25,000 housing units for a major mixed-use residential development in Riyadh that will boast 92,903m² of commercial space across three sites. Scott Sarver of Chicago-based architecture firm SMDP is behind the pre-development design. Two real estate firms have reportedly carried out site evaluation and feasibility studies.
Global Business Ventures is a mix of Saudi Arabian and US business leaders developing community projects that align with the Saudi Vision 2030 plan.
Residential development is continuing unabated in the kingdom. This May, it was revealed that up to 30,000 additional homes could be supplied in Jeddah by 2020, where the current supply stands at around 800,000 units.
The majority of this upcoming supply could be provided by Al Ra'idah Investment Company, owned by Saudi Arabia's Public Pension Agency. Al Ra'idah is expected to deliver 6,160 apartments and 1,180 villas across Jeddah in different phases.
Additionally, prominent residential developments, such as Gardenia Residence, Al Farida, al Mayar, Masharif, Diyar Al Salaam, and Al Hilal Tower 2, are also likely to boost residential supply in Jeddah.
10. National Guard housing and infra
The Avenues Riyadh is not Salini Impregilo’s only contract in the kingdom – this February, the Italian civil infrastructure giant announced it had been awarded a $1.3bn (SAR4.87bn) contract by Saudi Arabia National Guard.
The project entails the delivery of housing and urban planning services, as well as the construction of 6,000 villas, across a 700ha area to the east of Riyadh. A 160km road, in addition to secondary routes and related services, a sewage treatment plant, and above- and below-ground water systems, will also be developed as part of the project.
Salini Impregilo stated that contract works are expected to be completed in five years.
Pietro Salini, chief executive officer of Salini Impregilo, said the contract was "an important milestone" for the company's Middle East growth strategy, adding: “This project allows us to make use of a summary of what we [will] need in the future to meet the challenges of the infrastructure sector, [which are] urbanisation, transport and urban centre connection, and water management.”
In a statement, Salini Impregilo said the latest contract win would strengthen its presence in Saudi, where it is involved in the construction of Line 3 – also known as Orange Line – of Riyadh Metro. The 41.58km line will be the metro system's longest.
Last April, the company won a $300m (SAR1.1bn) contract to work on the Al Faisaliah District Redevelopment project for Al Khozama Management Company, which specialises in the development and management of commercial, luxury, and hotel properties.