Saudi mega construction boom hands builders $250 bln contracts
Saudi Arabia awarded construction contracts worth $250 billion since 2016, when the Kingdom embarked on an ambitious plan to build mega projects and transform its economy.
Property and infrastructure projects valued at $1.25 trillion have been announced across the country including the high-tech new city Neom, on the Kingdom’s west coast, according to property consultant Knight Frank LLP. The government has also unveiled vast new tourism and entertainment projects that aim to attract visitors from around the world while also encouraging Saudis to spend more domestically.
“Saudi Arabia will become the world’s largest construction site,” said Faisal Durrani, head of Middle East research at Knight Frank. “It is a mammoth task,” he said, and “modern methods of construction like 3D printing, modular construction, and off-site manufacture must be embraced.”
NEOM
The so-called giga projects are key to Saudi Arabia’s plans to transform itself into a top tourism destination and to move its economy away from its hydrocarbon dependency. To help achieve its ambitious targets, the Kingdom has pledged to spend hun-dreds of billions of dollars. It’s also launching a new airline and a fresh airport as part of the 2030 plan led by the country’s Crown Prince Mohammed bin Salman.
Tourism push
Since 2016, contracts worth $70 billion were handed to build parts of Neom while work valued at $21 billion has been awarded by Red Sea Global for a tourism development along the west coast, according to Knight Frank.
The Red Sea project, first announced in 2017, covers 28,000 square kilometers (11,000 square miles) — an area about the size of Belgium — and will cost $23.6 billion to build. It will target regional and international luxury travelers with resorts on the Red Sea coast, including an archipelago of 90 islands and the first hotels are set to open later this year.
The country also has a plan to build 660,000 homes, almost as much as neighboring Dubai’s entire housing supply, and add 289,000 hotel rooms, 6 million square meters of office and 5.3 million square meters of retail space, according to Knight Frank.
