Saudi Arabia – Infrastructure & Transportation 2019

Saudi Arabia Further Expands Its Infrastructure

Published: 21 February 2019

1. Transportation infrastructure

The Saudi Arabian government is planning several metro and tram networks due to the increasing traffic load in large cities. However, many projects are not progressing or have been postponed due to financing issues. In some cases, the plan now is to realize the project as a Public-Private-Partnership (PPP). Construction of the metro in Riyadh is well underway and scheduled for completion in 2019 (176 kilometers, 6 lines, 85 stations). Alstom is supplying the trains and is participating in one of the operating consortia.

In the pilgrimage cities of Mecca and Medina, the construction and expansion of metro networks is regarded as essential in order to transport the steadily increasing crowds of pilgrims. But despite their high relevance, the projects are not progressing. In Mecca, a comprehensive metro network (180 kilometers, 4 lines, 88 stations, US$ 16 billion) is planned to be added to the existing short metro line that carries pilgrims between Mecca, Mina, Arafat and Muzdalifah (18 kilometers). A new metro network with a length of 95 kilometers is planned in Medina (3 lines, US$ 4.4 billion).

In September 2018, the Haramain express train link between Mecca and Medina (450 kilometers, US$16 billion) was inaugurated. The train supports the transport of pilgrims between the two holy cities. Other stops include the King Abdullah Economic City (KAEC) industrial zone, the new airport in Jeddah and Jeddah City. The connection can carry 60 million passengers per year.

In Jeddah, a planned metro network (157 kilometers, 4 lines, US$ 13 billion) and a light rail (38 kilometers, 43 stations, US$ 1.5 billion) are at a standstill. The projects are now to be implemented as PPPs due to the financing problems. For a tram on the Corniche (16 kilometers, 15 stations, US$ 800 million), an infrastructure consultancy contract was awarded to Foster + Partners. But progress on a metro project in Dammam seems to have halted.

In 2017, the Saudi Railway Company (SAR) moved approximately 12 million tons of freight in freight traffic, and by 2025 the figure is set to rise to 20 million. SAR also intends to expand its passenger network. A connection to the Jubail Industrial City and another to Ras Al-Khair and up to the northern border is under construction. The Saudi Land Bridge project (US$ 7 billion), which will link Riyadh and Jeddah, does not seem to be making any progress, nor does a high-speed connection between Riyadh and Dammam (US$ 14 billion) announced in 2014.

In the countries of the Gulf Cooperation Council (GCC) there are 2,662 kilometers of railway lines for long-distance freight transport. In the long term, a further 14,525 kilometers are planned, mainly in Saudi Arabia (10,000 kilometers), Oman (2,135 kilometers) and the UAE (1,200 kilometers). Additionally, a connecting railway network is planned which will primarily transport goods, though the future of the project is uncertain. In most Arab countries, projects are being shelved due to the lower price of oil. In addition, political interests among the countries vary greatly.

2. Airport construction

Saudi Arabia relies on cooperation with the private sector for airport projects. The airport in Jeddah is the largest in the country in terms of passenger volume. The old terminal handled around 34 million passengers in 2017, including pilgrims. A new terminal will have an additional capacity of 30 million passengers per year.

In Jeddah, test operations at the new King Abdulaziz International Airport (KAIA) started in May 2018 with around 80 flights per week. It is scheduled to officially open and go into full operation at the beginning of 2019. The GACA (Saudi Arabia General Authority for Civil Aviation) awarded the contract to operate the airport for a period of twenty years to Changi Airports Saudi Arabia (Casa), a joint venture between Changi Airports International (CAI) from Singapore and the local Saudi Naval Services.

Saudia Cargo has commissioned three companies to build an air cargo center at KAIA: Siemens is providing the technology for cargo logistics and is responsible for its maintenance. Al Bawani has been awarded the construction contract, and AECOM will supervise the engineering work. The first project phase runs from 2018 until the end of 2019. The second phase begins in June 2020 and ends in December 2021 according to the implementation plan.

A consortium including Flughafen München GmbH, Consolidated Contractors Company (CCC) and Aviation Security in Airport Development (Asiad) was awarded the contract to build and operate the new international airport at Taif. Munich Airport will manage the facility. Operation is scheduled to start in 2020. At King Fahd International Airport in Dammam, Vanderlande was awarded the contract for a baggage handling system, and Serco Middle East obtained the contract to install fire protection measures.

The contract to renovate Riyadh Airport was awarded in 2017 to a joint venture between IC Ictas Construction of Turkey and Al-Rashid Trading & Contracting of Saudi Arabia. The capacity of Riyadh Airport is to increase in three phases, from 20 million passengers per year, including the new Terminal 5, to 80 million by 2035. The total project is estimated at US$ 28 billion.

3. Harbor construction

The weak economy is hampering the growth of many ports. In the medium term, however, demand is expected to rise and capacity to be further expanded. The development of ports is mainly driven by local and international private companies. Until now, many goods and commodities have been transported to Saudi Arabia by truck via ports in the UAE, in particular Dubai’s Jebel Ali Port, and by land. The potential exists to relocate port operations to Saudi Arabia.

Nevertheless, there is a growing risk of oversupply in the Gulf region, as numerous ports want to expand their capacities and already have high capacity reserves. Analysts at Transport Intelligence calculate that container handling in Bahrain in 2016 amounted to around 300,000 TEU (twenty-foot equivalent) with a capacity of 1 million TEU. Qatar turned over nearly 500,000 TEU with four times the capacity and plans to increase it to 6 million TEU. In Oman, the ports of Duqm, Sohar and Salalah together handled 4 million TEU, with a total capacity of 10.5 million TEU. In Dubai, Jebel Ali’s capacity is expected to increase from 19 to 22 million TEU.

The Jeddah Islamic Port (JIP) is the country’s largest logistics hub with a capacity of 4.5 million TEU. The port is not connected to a rail network, but could be connected to the Red Sea via a bridge project from Riyadh. However, this is still at an early planning stage. Dammam’s King Abdulaziz Port in the northeast of the country is the most important export port for the manufacturing and oil & gas sectors (capacity 1.5 million TEU).

King Abdullah Port, a relatively new port in the King Abdullah Economic City industrial zone not far from Jeddah, is expanding. It handled nearly 1.7 million TEU in 2017, 21% more than in the previous year. Its capacity amounts to 3 million TEU, and an expansion to 20 million TEU is planned. In autumn 2017, AMSteel awarded King Abdullah Port a 25-year contract to operate its first bulk and general cargo terminal.

The second phase of the expansion of the King Abdullah Port by two further terminals to 4 million TEU is almost completed, with Huta Marine Works as the general contractor. National Container Terminals holds a 50-year concession to operate the port. According to reports, the award of a second concession for further expansion of the port is being discussed.

State-owned oil giant Saudi Aramco is expanding its port in Jizan with an investment volume of US$ 307 million. The main contractor for the onshore contract is Alkifah Contracting. The work is progressing well, and more than half has been completed. The contract for the US$ 91 million expansion of offshore capacity was awarded to China Harbour Engineering Company in 2017. The expansion is about to be completed.

Saudi Aramco is increasing its port capacities in Yanbu. For that, the Al-Muajjiz terminal is being renovated. JGC Gulf International was awarded the Engineering, Procurement and Construction Management (EPCM) contract for the US$ 110 million project in 2015. The work was scheduled to be complete in the third quarter of 2018 but is still ongoing.

The construction of two fishing ports in Tabuk for US$ 33 million on behalf of the Saudi Ministry of Agriculture is expected to be completed shortly. Work has been underway since 2016.

4. Road construction

Approximately 250 road infrastructure projects worth US$ 20 billion are under construction. 74 additional projects with a value of US$ 107 billion are planned.

Plans for a second bridge to Bahrain, the King Hamad Causeway, with an estimated investment need of US$ 4 billion are underway. The project is a joint venture of the transport ministries of Saudi Arabia and Bahrain and is to be executed as BOT (Build Operate Transfer). The studies and consulting services will be tendered. The preparatory studies and technical specifications will be prepared over a period of 30 months, and construction will start in mid-2021.

A bridge to Egypt, the King Salman Causeway, is also projected. The 50-kilometer-long structure will connect Ras Hameed in Saudi Arabia with Egypt at a point slightly north of Sharm al-Shaikh and run across Tiran Island. The transport ministries of both countries are cooperating on the US$ 3-4 billion project. AECOM and Arup, among others, have submitted bids for the consultancy contract.

The Metro Jeddah Company intends to build a suspension bridge over Obhur Creek. The bridge will be 2 kilometers long and 74 meters wide in order to provide enough space for 8 vehicle lanes and the Orange rail line of the metro. The technical consultant will be HDR from the USA and the financial consultant a consortium of GIB Capital (Bahrain) and Synergy Consulting. Dentons is the legal advisor. The US$ 1 billion project will be implemented as DB (Design Build), and further tenders will be invited after the Metro Jeddah Company has received specifications from the National Center for Privatization (NCP).

5. Water/Wastewater

Investment needs in the water and wastewater sector are high. Only half of households are connected to the sewage network and about 20% of all wastewater is treated. By 2040, a good 90% of wastewater should be treated, according to plans. The government wants to withdraw as an investor and favors operator models (build, own, operate or build, operate, transfer).

Riyadh’s canal system is to be retreaded, costing US$ 2.9 billion. The project was announced in 2010 but delayed due to financing problems. But recently there has been some movement in the project; in May 2018 it was announced that the design work had been completed and approved by the client, the Ministry of Municipal and Rural Affairs. The tender for the main contract should take place soon.

The evaluation of bids for the second phase of a wastewater treatment plant at Jeddah Airport is ongoing. The capacity will be 500,000 cubic meters/day and a biogas heat-to-power unit with 8 MW. The project has been in the planning stage since 2011, and the award of the contract has been postponed several times due to financing difficulties. The US$ 400 million project will now to be awarded as a BOT in partnership with the private sector. Bids were able to be submitted until the end of September 2018.

Drinking water is mainly produced by seawater desalination plants and several projects are planned. They will be built on the Red Sea (Haql, Duba, Al Wajh, Umluj: 25,500 cubic meters/day each, Rabigh and Al Lith: 34,000 cubic meters/day each, Al Qunfudhah: 51,000 cubic meters/day, Farasan Island: 17,000 cubic meters/day). The contract was tendered by Saline Water Conversion Corporation as EPC. Bids were submitted by Saudi Tumpane/Abengoa (US$ 470 million), Al Rashid Trading & Contracting/ACCIONA Group (US$ 586 million), Advanced Water Technology/Rawafid Holding/SETE Energy (US$ 601 million), Saudi Services for Electro Mechanic Works/Aqua Engineering GmbH (US$ 616 million), Alfanar Group/Veolia (US$ 637 million) and Thabat Construction Company/Metito (US$ 664 million).

6. Power plant construction

Electricity consumption is increasing, with per capita consumption three times higher than the global average. Electricity price subsidies have stimulated consumption. Subsidies were reduced in 2016 and 2018, slightly curbing electricity consumption.

Power plant capacities are to be expanded by 120 GW in the coming 15 years, at which point approximately one-third of the electricity will be generated by nuclear power and renewable sources. The plans are ambitious.

The country’s first two nuclear power plants, with a total capacity of 2.8 GW, are in an early planning stage. The King Abdullah City for Atomic & Renewable Energy is responsible for the US$ 8-10 billion project. Washington Group, EDF, KEPCO and Rosatom have prequalified. French engineering firm Assystem was commissioned to carry out studies for site selection. By 2040, a total of 16 nuclear power plants with a total capacity of 17 GW are slated to be installed.

In Jubail, existing seawater desalination plants will be expanded via an IWPP with an output of 1.17 million cubic meters of water/day and a thermal power plant with 3 GW. The project is estimated at US$ 5.4 billion. Pre-qualification is underway and the request for bids ended in June 2018. More than 45 companies submitted prequalification documents.

Renewable energy capacity currently amounts to 0.3 GW, but by 2020 is expected to reach 3.45 GW and by 2023 approximately 9.5 GW. However, expansion plans have been repeatedly cancelled. The Renewable Energy Project Development Office (Repdo) is implementing the 9.5-GW National Renewable Energy Program (NREP). The contract for the NREP’s first solar project was awarded in February 2018 to Indian company Mahindra Susten as EPC. The plant will be built in Sakaka with a capacity of 300 MW and is expected to cost US$ 700 million.

The award of the contract for the first phase of the solar project in Sudair with 6 to 8 300-GW photovoltaic plants each was planned for the third quarter of 2017 but has been delayed, as the client is reviewing its profitability. The EPC project is expected to cost US$ 3 billion. Sterling & Wilson, Mahindra Susten and Alfanar Construction submitted bids for the contract.

 

7. Table Appendix: Infrastructure construction projects in Saudi Arabia

Comment: Projects in the early stages (design/study) are often realized in a heavily modified form, temporarily suspended or partially cancelled. Completely new tenders are also frequent.

Source: MEED Projects

 

Railroads: Selected projects (investments in US$ millions)

Project Investment Project status* Operator
Riyadh – Dammam High-Speed Rail 14,000 ST Saudi Railways Organisation (SRO)
Dammam Metro 9,000 ST Eastern Province Municipality
Jeddah Metro: Orange & Blue Lines 8,000 PQ Jeddah Metro Company
Saudi Landbridge 7,000 PQ Saudi Railway Company (SAR)
Taif Public Transport Network 5,000 DE Taif Municipality
Mecca Metro: Line A 4,000 ST Makkah Mass Rail Transit Company (MMRTC)
Mecca Metro: Phase 1 (Lines B, C): Part 1: Civil: Package 1 2,653 EP Makkah Mass Rail Transit Company (MMRTC)
Medina Metro: Red line 1,900 DE Medina Municipality
JPTP: Light Rail Transit 1,500 PQ Jeddah Metro Company
Riyadh Link and New Dry Port 1,000 DE Saudi Railways Organisation (SRO)

*EP = Evaluation of Proposals, PQ = Prequalification, DE = Design, ST = Study

 

Highways: Selected projects (investments in US$ millions)

Project Investment Project status* Operator
NEOM: Infrastructure and Utilities 100,000 ST Public Investment Fund (PIF)
King Hamad Causeway 4,000 ST Ministry of Transport
King Salman Causeway (Tiran Causeway) 4,000 ST Saudi MOT / Egypt MOT JV
Murooj Jeddah (Wadi Al Asla): Infrastructure 1,500 DE Murooj Jeddah Company
JPTP: Obhur Suspension Bridge 1,000 EP Jeddah Metro Company
JPTP: Bus Feeder System 700 PQ Jeddah Metro Company
Shams Al Riyadh: Infrastructure 199 DE Dar Al Arkan
Souk Okaz City in Taif: Infrastructure Works 148 DE Saudi Commission for Tourism & National Heritage (SCTA)
Dualization of Bisha Sabt Al Alayah Road (Phase 1) 90 CB Ministry of Transport
JEC: Heavy Industry Area Development (Infrastructure Works) 80 EP Saudi Aramco

*EP = Evaluation of Proposals, PQ = Prequalification, DE = Design, ST = Study, CB = Call for Bids

 

Airports: Selected projects (investments in US$ millions)

Project Investment Project status* Operator
King Khalid International Airport Expansion: Terminal 6 3,000 ST Saudi Arabia General Authority for Civil Aviation (GACA)
King Abdulaziz International Airport: Aircraft Maintenance Hangars 800 CB Saudi Arabian Airlines
NEOM: Airport 500 ST Public Investment Fund (PIF)
Shaqraa Domestic Airport 300 ST GACA
Wadi Al Dawasir Domestic Airport Expansion 300 DE GACA
Al Kharj Domestic Airport 300 ST GACA
Turaif Domestic Airport Expansion 300 DE GACA
Sharurah Domestic Airport Expansion 300 DE GACA
Qaisumah Domestic Airport Expansion 300 DE GACA
Jubail Industrial City Airport 200 DE GACA / Royal Commission for Jubail & Yanbu (RCJ&Y)

*CB = Call for Bids, DE = Design, ST = Study

 

Ports: Selected projects (investments in US$ millions)

Project Investment Project status* Operator
King Abdullah Economic City: King Abdullah Port: Phase 2 500 EX Port Development Company
JEC: Commercial Port Onshore in Jizan (Tender No. 3000626454) 307 EX Saudi Aramco
Yanbu South Terminal Rehab: AMT/Berths: Onshore 110 EX Saudi Aramco
Jizan Economic City: Offshore Port Expansion 91 EX Saudi Aramco
Fishing Ports in Tabuk 33 EX Ministry of Agriculture

*EX = Execution

 

Water/Wastewater/Waste: Selected projects (investments in US$ millions)

Project Investment Project status* Operator
Riyadh Storm Water Drainage Project 2,900 DE Ministry of Municipal and Rural Affairs
Rabigh 3 IWP 900 EP Water & Electricity Company (WEC)
Salwa Canal 746 EP Ministry of Interior
Satellite Desalination Plants at Red Sea Coast 533 EP Saline Water Conversion Corporation (SWCC)
Rabigh Desalination Plant: Phase 2 500 ST SWCC
Yanbu Desalination Plant: Phase 4 (IWP) 450 DE WEC
Mecca Strategic Water Reservoir Project 300 EP SWCC
Wastewater Treatment Plant in Taif 200 DE National Water Company
Turaif Sewage Treatment Plant (STP) 140 DE WEC
Sakaka Sewage Treatment Plant (STP) 140 DE WEC

*EP = Evaluation of Proposals, DE = Design, ST = Study

 

Electric Power: Selected projects (investments in US$ millions)

Project Investment Project status* Operator
Nuclear Power Reactor: Package 1 8,000 ST King Abdullah City for Atomic & Renewable Energy (KA-CARE)
Jubail 3 IWPP 5,400 PQ Water & Electricity Company (WEC)
Shuqaiq Power Plant Expansion: Phase 1 2,500 ST Saudi Electricity Company (SEC)
Jeddah South Power Plant: Phase 2 Expansion 2,500 ST SEC
PP15 Combined Cycle Power Plant: Phase 2 (IPP) 2,000 PQ SEC
Ghazlan Power Plant 2,000 ST SEC
Renewable Energy Program: Round I – Phase 2 2,000 ST Renewable Energy Project Development Office (REPDO)
PP16 Combined Cycle Power Plant: Phase 1 1,200 ST SEC
MFD: Cogeneration Independent Steam Power Project (ISPP) 1,000 PQ Saudi Aramco
Salbukh Power Plant 746 ST SEC

*PQ = Prequalification, ST = Study

 

8. Contacts
Name Website Comment
Ministry of Commerce and Investment http://www.mci.gov.sa Responsible also for company registrations
Ministry of Transport http://www.mot.gov.sa Infrastructure projects
Ministry of Health http://www.moh.gov.sa Hospital construction
Ministry of Municipal and Rural Affairs http://www.momra.gov.sa Urban development
Ministry of Housing http://www.housing.gov.sa Housing construction
Ministry of Energy, Industry and Mineral Resources http://www.meim.gov.sa Oil, gas and mining projects; power plants
Ministry of Environment, Water and Agriculture http://www.mewa.gov.sa Water projects
Construction Week http://www.constructionweekonline.com Professional journal
Gulf Construction http://www.gulfconstructionworldwide.com Professional journal
Big 5 Saudi Arabia https://www.thebig5saudi.com Trade fair in Jeddah (annually; next date: 10. to 13.03.2019)
Saudi Build http://www.saudibuild-expo.com Trade fair in Riyadh (annually)
Saudi Transport http://www.recexpo.com Trade fair in Riyadh
BUILDEX http://www.diec.com.sa Building construction, interior design and maintenance (annually; spring 2019 in Dammam)
Glass & Aluminium Saudi Arabia http://www.glassalusaudi.com Trade fair in Riyadh (annually; next date: spring 2019)
Saudi Mining & Minerals http://www.saudi-mining.com Trade fair in Riyadh (next date: 28. to 30.1.2020)