Saudi Arabia 2016 Construction Outlook: Compare Rising Infrastructure Megaprojects Opportunities With Increasing Project Risk

Saudi Arabia 2016 Construction Outlook: Compare Rising Infrastructure Megaprojects Opportunities with Increasing Project Risk

BRIKSTATS CONSULTING

MAY 2016

SAMPLE PAGES

REPORT KEY HIGHLIGHTS

Saudi Arabia Forecasted construction spend from 2016-2020; Saudi Arabia construction spend from 2005-2015; List of projects to be awarded in 2016 and 2017; Historical and Forecasted construction spend in Riyadh, Makkah, Eastern Province, Madinah, Jizan and Tabuk; Saudi Arabia Public-Private Partnership current and future trend; Increasing Project Time Overruns in Saudi Arabia By Sector; Reasons for project time overruns in Saudi Arabia, List of infrastructure projects in Saudi Arabia with time overruns; Project Cost overrun in Saudi Arabia by Sectors; Average project IRR (internal rate of return) by sector in Saudi; Infrastructure Project financing methods, project debt equity ratio and list of top financiers in Saudi.

Sector deep dives – Saudi Arabia power or electricity detailed analysis including power generation projects by fuel type, market share of top power producers by capacity and project spend, list of top planned power projects; Saudi Arabia railway sector outlook – railway projects spend, top rail authorities and operators; Saudi Arabia Mixed-Use sector analysis including mixed-use project spend from 2010-2020, list of historical, upcoming and distressed mixed-use projects focusing on the economic cities, and the market share of the top project owners or developers in Saudi Arabia

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Table of Content

1: Megaprojects Infrastructure Upcoming Opportunities in Saudi Arabia: Microscopic View1.1: Overall Megaprojects Spend in Saudi Arabia: Historically and Future1.2: Megaprojects Spend in Saudi Arabia By Main Sectors: Real Estate ; Transportation ; Energy, Industrial & Utilities ; Social Infrastructure1.3: Megaprojects Spend in Saudi Arabia: By Province/ State

2: Historical Megaprojects Construction Spending in Saudi Arabia2.1: Historical View of Megaproject Spending in Saudi Arabia on Yearly Basis2.2: Historical View of Megaproject Spending in Saudi Arabia - On Hold and Troubled Projects

3: Future View of Megaprojects Construction Spending in Saudi Arabia3.1: Future View of Megaproject Spending in Saudi Arabia on Yearly Basis3.2: Deep Dive into Megaprojects spending in 2016 and 2017

4: Sector Level Megaprojects Construction Spending in Saudi Arabia4.1: Historical View of Saudi Arabia Megaprojects Construction Spending - By Top Sub-Sectors4.2: Future View of Saudi Arabia Megaprojects Construction Spending – By Top Sub-Sectors

5: PPP in Megaprojects in Saudi Arabia: Detailed Overview5.1: Overall PPP Growth and Development in Saudi Arabia: Historical and Future view5.2: PPP Growth in the Saudi Arabia: By Sectors5.3: PPP Implementation Models (Concession Type) in Saudi Arabia

6: Public and Private Ownership Share in Saudi Arabia Megaprojects development6.1: Overall Ownership Trend6.2: Private Sector involvement and the Development Model6.3: Private and Public Ownership: By Sectors (Excluding PPP)

7: Assessing Project risks in the Saudi Arabia Megaprojects landscape7.1: Megaprojects Cost Overruns/ Variations in Saudi Arabia7.2: Megaprojects Cost Overruns/ Variations in Saudi Arabia: Reasons and Factors7.3: Megaprojects Time Overruns/ Variations in Saudi Arabia7.4: Megaprojects Time Overruns/ Variations in Saudi Arabia: Reasons and Factors

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Table of Content (cont..)

8: Recent and Strategic Trends in the Saudi Arabia Megaprojects8.1: Greenfield versus Brownfield Megaprojects Investments in Saudi Arabia8.2: Increasing Average Megaprojects Size in Saudi Arabia

9: Saudi Arabia Megaprojects Financing: Prime Sources of Project Financing and Project Debt and Equity Ratios9.1: Saudi Arabia Megaprojects Financing: Project Financing Debt to Equity Ratio at Sector Level9.2: Saudi Arabia Megaprojects Financing By Type of Institutions

10: Saudi Arabia Megaprojects Returns (IIR- Internal Rate of Return) and Impact Analysis10.1: Saudi Arabia Megaprojects Return Analysis using Internal Rate of Return (IRR): By 'Main' Sectors10.2: Saudi Arabia Megaprojects Return Analysis : Economic and Social Impacts

11: Saudi Arabia Megaprojects Construction : Key Sector Deep Dives11.1: Saudi Arabia Megaprojects Sector Deep dive: Power Sector Assessment

11.1.A: Power Sector - Historical Megaprojects Construction Spending in Saudi Arabia11.1.B: Power Sector - Future View of Megaprojects Construction Spending in Saudi Arabia11.1.C: Key Owners and Investors in Saudi Arabia’s Power Sector

11.2: Saudi Arabia Megaprojects Sector Deep dive: Railways Sector Assessment11.2.A: Railways Sector - Historical Megaprojects Construction Spending in Saudi Arabia11.2.B: Railways Sector - Future View of Megaprojects Construction Spending in Saudi Arabia11.2.C: Key Owners and Investors in Saudi Arabia’s Railways Sector

11.3: Saudi Arabia Megaprojects Sector Deep dive: Mixed Use Sector Assessment11.3.A: Mixed -Use Sector - Historical Megaprojects Construction Spending in Saudi Arabia11.3.B: Mixed -Use Sector - Future View of Megaprojects Construction Spending in Saudi Arabia11.3.C: Key Owners and Investors in Saudi Arabia’s Mixed -Use Sector


Table of Figures (cont..)

Figure 1: Saudi Arabia Breakdown of Megaproject Spending - By Project StatusFigure 2: Saudi Arabia Historical Megaprojects Spending - By SectorFigure 3: Saudi Arabia Upcoming Megaprojects Spending - By SectorFigure 4: Saudi Arabia Megaprojects Investment - By ProvinceFigure 5: Saudi Arabia Split of Historical Megaprojects Investment: By Province and By Main SectorsFigure 6: Saudi Arabia Split of Upcoming Megaprojects Investment: By Province and By Main SectorsFigure 7: Saudi Arabia Split of Troubled Megaprojects Investment: By Province and By Main SectorsFigure 8: Saudi Arabia Projects Awarded Value On Yearly Basis: From 2005-2015Figure 9: Saudi Arabia Troubled Projects (On Hold or Cancelled) Value On Yearly Basis: From 2005-2015Figure 10: List of Key Projects Put on Hold or Cancelled with project detailsFigure 11: Saudi Arabia Projects Awarded Value On Yearly Basis: From 2016- 2020Figure 12: Saudi Arabia Megaprojects Spending by Key Sectors from 2016-2020Figure 13: List of Top Projects To be Awarded in 2016 and 2017 with project detailsFigure 14: Saudi Arabia Projects Awarded historically : Split by Top 6 Sub SectorsFigure 15: Saudi Arabia Projects to be Awarded in Future : Split by Top 6 Sub SectorsFigure 16: Saudi Arabia PPP Megaprojects Construction: By Project StatusFigure 17: Saudi Arabia Total PPP Megaprojects Construction: By SectorsFigure 18: Saudi Arabia PPP Megaprojects Construction – By Concession TypesFigure 19: Saudi Arabia PPP Megaprojects Construction – By Concession Types and By SectorsFigure 20: Saudi Arabia Historical, Troubled and Upcoming Megaprojects –By Ownership Type (i.e. Public and Private)Figure 21: Saudi Arabia Private Sector Owned Megaprojects by Status: Split by Ownership Model (JV / Partnership/ Standalone)Figure 22: Saudi Arabia Megaprojects By Ownership Type and By SectorsFigure 23: Saudi Arabia Share of Megaprojects Undergoing Cost Overrun: Compared to other countriesFigure 24: Saudi Arabia Megaprojects Average Cost Overrun: By Main SectorsFigure 25: List of Big 5 projects Undergoing Cost Overrun with project detailsFigure 26: Saudi Arabia Megaprojects Cost Overrun: Reasons for Cost Overruns and Corresponding Impact On Cost Change %


Table of Figures (cont..)

Figure 27: Saudi Arabia Share of Megaprojects Undergoing Time Overrun: Compared to other countriesFigure 28: Saudi Arabia Share of Megaprojects Undergoing Time Overrun and Impact of Overruns: By Project SizeFigure 29: Saudi Arabia Megaprojects Average Time Overrun: By Main SectorsFigure 30: List of Big 5 projects Undergoing Time Overrun with project detailsFigure 31: Saudi Arabia Megaprojects Time Overrun: Reasons for Time Overruns and Impact On Timely Delivery, YearsFigure 32: Saudi Arabia - Greenfield versus Brownfield Megaprojects Investments – Historical, Troubled and UpcomingFigure 33: Saudi Arabia Greenfield versus Brownfield Megaprojects Investments – By SectorsFigure 34: Saudi Arabia List of Big Greenfield Projects Planned in 2016, 2017Figure 35: Saudi Arabia Megaprojects Average Project Size: By Sub-SectorsFigure 36: Saudi Arabia Megaprojects Projects Financing - Debt to Equity Ratio By SectorFigure 37: Saudi Arabia List of Projects with Key Sponsors, Lending Institutions, Debt & Equity valueFigure 38: Saudi Arabia Megaprojects with Average Internal Rate of Return (IRR): By SectorsFigure 39: List of Key Upcoming Megaprojects with Target IRRFigure 40: Saudi Arabia List of Key Ongoing and Upcoming Megaprojects: With Social and Economic ImpactsFigure 41: Saudi Arabia Power Project Contracts Awarded : From 2010-2015Figure 42: Saudi Arabia - Top Owners of Historically Awarded Power projectsFigure 43: Saudi Arabia - Share of Saudi Electricity Company and Its Partners in Historically Awarded Power ProjectsFigure 44: Saudi Arabia Power Project Contracts To Be Awarded : From 2016- 2020Figure 45: List of Top Power Projects To be Awarded in 2016 and 2017 with project detailsFigure 46: Share of Public Versus Private Sector in Saudi Arabia Power SectorFigure 47: Market Share of Top Key Project Owners of Saudi Arabia Upcoming Power ProjectsFigure 48: Saudi Arabia Railways Project Contracts Awarded : From 2009-2015Figure 49: Saudi Arabia Railways Project Contracts Awarded: Split by Type of RailsFigure 50: Saudi Arabia Upcoming Railways Project Contracts: From 2016- 2020Figure 51: Saudi Arabia Upcoming Railways Project Contracts: Split by Type of RailsFigure 52: List of Top Railways Projects To be Awarded in 2016 and 2017 with project details


Table of Figures

Figure 53: Market Share of Top Key Project Owners of Saudi Arabia Upcoming Railway ProjectsFigure 54: Saudi Arabia Mixed -Use Project Contracts Awarded : From 2010-2015Figure 55: Saudi Arabia Share of Spend By Mixed -Use Projects On hold and Cancelled ProjectsFigure 56: Saudi Arabia Upcoming Mixed -Use Project Contracts: From 2016- 2020Figure 57: List of Top Mixed -Use Projects To be Awarded in 2016 and 2017 with project detailsFigure 58: Share of Public Versus Private Sector in Saudi Arabia Mixed -Use SectorFigure 59: Market Share of Top Key Project Owners of Saudi Arabia Upcoming Mixed-Use Projects


USD billion

2005 2007 2008 2009 2010 2011 2012 2013 2014 2015

Historical Project Awards - By Construction Start Year

Over the last 10 years, Saudi Arabia was recorded to have annual spending of USD XX billion;

2011 was an exceptional year with USD XXX billion worth of projects awarded


Source: BrikStats Megaprojects Database, Team Analysis

Figure 8: Saudi Arabia Projects Awarded Value On Yearly Basis: From 2005-2015

Average annual

spending = USD X B

Few big ones include Saudi Housing Project, Sudair Industrial City, Jeddah

Economic City, Sadara Chemicals Complex

2006 2008 2009 2010 2011 2012 2013 2014 2015

Oil slump resulting in economic slowdown has adversely affected the Saudi fiscal balance,

consequently impacting the infrastructure investments. In last 2 years, several key projects

were put on hold or cancelled



Figure 9: Saudi Arabia Troubled Projects (On Hold or Cancelled) Value On Yearly Basis: From 2005-2015

USD billion

Troubled Project Awards - By Construction Start Year

Average = USD X B

Energy, Utilities, Industry Transport Real estate

2016

2017

2018

2019

2020

While a major section of projects in real estate and transport will be awarded between 2016 and

2017, energy sector will see several projects to start construction in later years



Figure 12: Saudi Arabia Megaprojects Spending by Key Sectors from 2016-2020

USD billion

Upcoming Project Awards On Annual Basis- Split by Key Sectors

Of the projects facing time overrun, ~XX% fall in the bracket of project size ranging between USD 5-10 billion and the highest impacted ones fall in the range of USD 2-5 billion


Figure 28: Saudi Arabia Share of Megaprojects Undergoing Time Overrun and Impact of Overruns: By Project Size


1000-2000

2000-5000

5000-10000

>10000

Project Size, $B Time Overrun, Years Share of Total Projects Impacted by Time Overruns, %

The sectors with vast opportunities are likely to get even more complex with the increasing

project size



Figure 35: Saudi Arabia Megaprojects Average Project Size: By Sub-Sectors

Power

Railways

Mixed use

ProcessIndustries

Airports

Historical

Upcoming

Sector Breakdown of projects valuing greater than USD 5 billion

Most of the upcoming projects in Power, Railway and Airport are estimated to cost higher than USD 5 billion

In the future, projects will get more complex with the majority falling in a bracket of project cost >USD 5 billion

<2

2-5

5-10

>10

Upcoming

Historical

Project Size, $B

Project ValueUSD billionUSD billion

Mixed use projects have been recorded to have highest target IRRs, followed by Process

Industries



Figure 38: Saudi Arabia Megaprojects with Average Internal Rate of Return (IRR): By Sectors

Target Internal Rate of Return (IRR) By Sector, %

MIXED USE

PROCESS INDUSTRIES

HOSPITALITY

POWER

MINING

XX%

XX% of the historical project were awarded by the Saudi Electricity Company. A small share of

this was awarded in PPP format with few private equity investors



Figure 42: Saudi Arabia - Top Owners of Historically Awarded Power projects; Figure 43: Saudi Arabia - Share of Saudi Electricity Company and Its Partners in Historically Awarded Power Projects

Saudi ElectricityCompany

Saudi Arabian OilCompany

Others

Total 100%

SEC

SEC,Al Mourjan Co.

SEC, DhurumaElectricity Co.

SEC, EgyptElectricity Transmission Co.

SEC, HajrElectricity Production Co.

Contracts awarded by Saudi Electricity Company- Standalone / PPP, $B

Executed under PPP

model

Top Owners of Historically Awarded Power projects, %

USD billion

Historical Project Awards – Split by Railway Type

Clearly the focus was set on developing metro lines through the region with only a few critical

high speed rail projects awarded in the last few years



Figure 49: Saudi Arabia Railways Project Contracts Awarded: Split by Type of Rails

METRO HIGH SPEED RAIL FREIGHT RAIL LIGHT RAIL/ MONORAIL

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Saudi Arabia 2016 Construction Outlook: Compare Rising Infrastructure Megaprojects Opportunities With Increasing Project Risk