Embed Size (px)
Citation preview
© 2013 MEED Insight
May 2019Prepared by Ed JamesDirector of Content & Analysis, MEED [email protected]
The Saudi Arabia Construction Projects MarketAnalysis of market potential
© 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 [email protected], or call +9714 8180318
3 © 2014 MEED Projects
Market size
Source: MEED Projects
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)*
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
Bahrain Kuwait Oman Saudi Arabia UAE
2016 2017 2018
Key drivers
4
Higher oil prices in 2018 helped spur accelerating real economic growth in Saudi Arabia to a healthy 2.2%.With higherrevenues on the back of an improved oil price which hit $72 a barrel average last year, the government announced inDecember 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 Arabia2030 Vision. Key projects as part of this strategy include the $500bn Neom ‘gigaproject’ and other key mixed-usedevelopments like Qiddiya, Amaala, and the Red Sea tourism project
Saudi Arabia key economic indicators, 2019
Nominal GDP ($bn), 2018 782.5Real GDP growth, 2018 (%) 2.2Real GDP growth, 2019f (%) 1.8Non-oil real GDP growth, 2019f (%) 2.1Oil real GDP growth, 2019f (%) 2.8Fiscal Breakeven Oil Price ($/barrel) 73.3Government debt (% of GDP) 23.7Current account balance (%/GDP) 3.5Official Reserves ($bn) 349.4CPI inflation (%) -0.7Unemployment rate (% of total labour force) 5.4
0
200
400
600
800
1.000
1.200
1.400
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Saudi Arabia budget, 2010-19 (SAR bn)
Revenues ExpenditureSources: IMF; Gov
2018 selected KSA construction contract awards
5 Source: MEED Projects
Project Value ($m)Aramco Bahri Lamprell HHI - KSIMC: Package 6 1,100Aramco Bahri Lamprell HHI - KSIMC: Package 5 1,100Aramco Bahri Lamprell HHI - KSIMC: Package 4 1,100PIF - Sharma Complex : Royal Residential Buildings (Package 2) 1,000MOH - East Gate 960PIF - Sharma Complex : Royal Residential Buildings (Package 3) 500PIF - Sharma Complex : Royal Residential Buildings (Infrastructure Works) 500Saudi Aramco - Ajyal Site Development in South Dhahran (Phase 2) 300Al Akaria - Al Widyan Development: Infrastructure 292Alandalus Property/Sulaiman Al Habib Medical :Sulaiman Al Habib Medical Center 250Jeddah Municipality - Jeddah Waterfront and Corniche Development: Phase 7 & 8 240Ministry of Housing - 997 villas in South Dammam 180Kingdom Holding - Jeddah Economic City : Infrastructure Works 165Saudi Aramco - Labor Accommodation and Supporting Facilities Zone F1 (Package 8) 160Abha Private Hospital - Abha Private Hospital (300 Beds) 160MOH - Saudi Housing Project: Rabeyet Al Sharq Housing Complex 150Al Madina Al Munawarah Development Authority - Wadi Al AqeeqRehabilitation 133Ministry of Finance - Expansion of Cargo Area of Salwa Port 128MODON - Link Roads for Second & Third Industrial Cities in Jeddah 128MOH - Al Majmaah Hospital (300 beds) 124
Hundreds of constructioncontracts were awarded last yearin Saudi Arabia ranging fromhospitals and schools to palacesand ports.
One of the reasons why SaudiArabia is the number one targetmarket for many companies isthe sheer diversity of projects itoffers.
Unlike some other markets in theGCC, the kingdom has thebroadest mix of projectopportunities thanks to its sizeand wealth.
Top construction clients
6Source: MEED Projects
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
Top contractors
7 Source: MEED Projects
There are many capable and experienced local contractors in Saudi Arabia as evidenced by the top four positions belowof the leading contractors in the kingdom. But opportunities abound for companies from around the world. Sepco ofChina, Germany’s Siemens, Bechtel from the US and FCC of Spain are all examples of leading firms from around theworld 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 35.000Saudi Binladin Group
ABV Rock GroupEl Seif Engineering Contracting
Nesma & PartnersSEPCO
Al Arrab Contracting Co.Beijing Emirates International Construction Co
Joannou & ParaskevaidesAlmabani / CCC / Bechtel JV
Bechtel CorporationConsolidated Contractors
SiemensAl Rashid Trading & Contracting
Fare ConstructionAl Ayuni Investment & Contracting
Saudi Arabian Baytur Construction Co.Al Bawani
Azmeel ContractingSaudi Construction Development Company
FCC Construction
Future pipeline
8 Source: MEED Projects * Graph is based on a logarithmic scale for ease of visualisation
Value of future KSA planned and un-awarded contracts by sector ($m)
Saudi Arabia has more than $1.15 trillion work of future projects in the pipeline, making it by far the largest market of allthe GCC states. The biggest future sector by large margin is construction, highlighting the huge amount of constructionwork planned in the kingdom. In total, the construction and transport sectors have more than $825bn of known plannedan un-awarded projects.
41.982
675.741
12.01416.562
21.789
136.883
249.736
16.376
Chemical Construction Gas Industrial Oil Power Transport Water
Future selected KSA projects
9Source: MEED Projects
Project Value ($m)SRO - Riyadh Dammam High-Speed Rail 14,000Jeddah Metro Company - Jeddah Public Transportation Program (JPTP) 12,400GACA - KAIA: Phase 2 10,000Makkah Region Development Authority - Al Faisaliah City 10,000GACA - KAIA: Phase 3 10,000ADA - King Salman International Park 10,000PIF - Red Sea Tourism Project 9,605Eastern Province Municipality - Dammam Metro 9,000Jeddah Metro Company - Jeddah Metro: Orange & Blue Lines 8,000SAR - Saudi Landbridge 7,000JDURC - Murooj Jeddah (Wadi Al Asla) 5,500Taif Municipality - Taif Public Transport Network 5,000PIF - New Jeddah Downtown 4,800SRO - Yanbu Jeddah Jizan and Taif Khamis Mushayt Abha Railway 4,200MMRTC - Mecca Metro: Line D 4,000Qiddiya - The Qiddiya Project (Entertainment City) 4,000MOT - King Hamad Causeway 4,000MMRTC - Mecca Metro: Line A 4,000MMRTC - Mecca Metro: Phase 1 (Lines B, C): Part 1: Package 3 (SYS) 3,547Jeddah Metro Company - Jeddah Metro: Red Line 3,500
There are hundreds of future construction and civil infrastructure contracts across Saudi Arabia, the largest of which arehighlighted in the below table. They range from metros and high-speed railways to the world’s largest park and tourismdevelopment.
© 2013 MEED Insight
Some active current projects
1010
King Hamad Causeway
11
Neom
12
Qiddiya
13
KAAR Gateway
14
Red Sea Tourism Project
15
© 2013 MEED Insight
