Qiddiya project construction phase to start in a few months, says CEO

Source: SaudiGazette.com

Saudi gazette report

RIYADH — The construction phase of the Qiddiya project will start in a few months while the center for visiting investors will be opened during the third quarter of the year, business daily Al-Eqtisadiah reported on Tuesday quoting the project's CEO Michael Reininger.

"This year we will complete our plans and finish the primary work on the site and during the coming months we will shift to the construction phase," he said.

Reininger said the visitors' center consists of four separate buildings to attract the investors and other possible partners by the yearend.

"We will witness a large increase in the construction work in the site. We are racing against time for the opening of the project in four years from now," he explained.

The CEO said they have launched a training and a scholarship program in partnership with a number of local and international companies to train Saudis to take jobs in the gigantic project.

He said 12 Saudis were already trained to take jobs in the project side by side with a number of international experts.

Reininger said the project now has 160 employees who will be increased to 400 before the end of 2019. "We will have working opportunities for tens of thousands of Saudis by the year 2022 when the first phase of the project will be opened," he added.

The project, about 40 minutes drive from Riyadh, is expected to make annual proceeds of more than SR17 billion.

Once it is completed, Qiddiya will be among the world's top most entertainment projects. It is expected to attract more than seven million Saudi tourists every year.

Oil prices rise after tanker attacks stoke Middle East tensions

Source: Arabnews.com

Second time in a month tankers have been attacked in the world’s most important zone for oil supplies

Washington blames Iran for Thursday’s attacks

TOKYO: Oil prices rose on Monday after US Secretary of State Mike Pompeo said Washington will take all actions necessary to guarantee safe navigation in the Middle East, as tensions mounted following attacks on tankers last week.
Brent futures had climbed 26 cents, or 0.4 percent, to $62.27 a barrel by 0314 GMT. They gained 1.1 percent on Friday.
US West Texas Intermediate (WTI) crude futures were up 17 cents, or 0.3 percent, at $52.68 a barrel. They rose 0.4 percent in the previous session.
Prices had jumped as much as 4.5 percent on Thursday after the attacks on two oil tankers near Iran and the Strait of Hormuz.
It was the second time in a month tankers have been attacked in the world’s most important zone for oil supplies as tensions increase between the United States and Iran. Washington blamed Iran for Thursday’s attacks, prompting a denial and criticism from Tehran.
“We don’t want war. We’ve done what we can to deter this,” Pompeo said in an interview with Fox News Sunday, adding: “The Iranians should understand very clearly that we will continue to take actions that deter Iran from engaging in this kind of behavior.”
Tensions between Iran and the United States have risen since US President Donald Trump pulled out of a deal last year between Iran and global powers that aimed to curb Tehran’s nuclear ambitions in exchange for sanctions relief.
Iran has repeatedly warned it would block the Strait of Hormuz if it cannot sell its oil because of US sanctions.
“Growing tensions in the Middle East remain a cause for concern as traders fear supply disruptions over an escalation toward militaristic conflicts,” said Benjamin Lu, an analyst at Phillip Futures in Singapore.
Also supporting prices were comments over the weekend by the Saudi energy minister, Khalid Al-Falih, that OPEC would probably meet in the first week of July and he hoped it would reach an agreement on extending oil output curbs.
“We are hoping that we will reach consensus to extend our agreement when we meet in two weeks time in Vienna,” Falih told reporters while attending a G20 energy and environment ministerial meeting in Karuizawa, northwest of Tokyo.
The Organization of the Petroleum Exporting Countries plus Russia and other producers, an alliance known as OPEC+, have a deal to cut output by 1.2 million barrels per day (bpd) from Jan. 1. The pact ends this month and the group meets in coming weeks to decide the next move.
US energy companies also cut the number of oil rigs operating for a second week in a row, with production growth expected to slow as crude prices fell to near their lowest levels of the year.

Workload hike to spur construction jobs in Saudi Arabia in 2019-20

Source: Constructionweekonline.com

Rics study finds sharp increase in 'new business enquiries and workloads' despite 'subdued' Q1 2019 regional activity

The growing number of construction projects in Saudi Arabia will lead to the creation of jobs for engineers in the kingdom during 2019-20, despite building companies facing "subdued" regional activity in Q1 2019 on the back of tighter margins, high competition, and soft demand, according to the Middle East Construction and Infrastructure Survey published for Q1 2019 by Royal Institution of Chartered Surveyors (Rics).

Rics said that while there was a “general reduction” of business enquiries in Oman and the UAE, survey respondents reported a sharp increase in "new business enquiries and [...] workloads" in Saudi Arabia.

Its report added: “This solid pipeline of new activity appears to support the outlook for an increase in workloads over the next 12 months, as well as headcount, as 68% of respondents stated to increase hiring over the year.”

Rics added that a potential increase in oil prices – off the back of US sanctions and a drying up of global spare capacity – could also act as a “catalyst” for more optimistic workload outlook over the next 12 months, particularly in Saudi Arabia.

The figures mirror the results of Rics’ Q3 2018 survey, where respondents reported hiring increases in the UAE and Saudi Arabia, despite a decline in overall construction activity at the time.

Saudi Arabia construction contract awards grow 113% to $13bn in Q1

Source: www.arabianbusiness.com

Contract expansion in Q1 2019 comes as kingdom builds megaprojects across oil and gas, utilities, and transport sectors, USSABC says

The US-Saudi Arabian Business Council (USSABC) revealed that the value of contract awards in Saudi Arabia grew to $13bn (SAR48.9bn) in Q1 2019, a staggering 113% increase from $6.1bn (SAR23bn) in the same period in 2018, Construction Week reports. 

According to USSABC’s Contract Awards Index (CAI) report, the total value of contracts covers megaprojects in various sectors, with oil and gas; water; and transportation projects making up 67% of the total value, accounting for $8.7bn (SAR32.6bn).

The value of awarded contracts in Q1 2019 alone represented approximately 48% of the total value of contracts awarded in 2018.

Makkah accounted for 17% of the total contracts in Q1 2019, recording $2.2bn (SAR8.2bn) during the period, particularly in the water and hospitality sectors.

These projects include the world’s largest desalination plant in Rabigh and the Four Seasons hotel in Jeddah.

Construction work is also under way on Riyadh’s second Ring Road, as well as the country’s much anticipated Riyadh Metro, all of which led to contracts worth $1.7bn (SAR6.4bn) in the capital city.

The Middle East's top 10 contract wins of September 2018

Source: Constructionweekonline.com

10. DWTC hands $13m Expo Village contract

Dubai World Trade Centre (DWTC) awarded fit-out and joinery firm Abanos a $13.4m (AED49.2m) contract to supply and install non-fire-rated and fire-rated doors, kitchen cabinets, and wardrobes for Dubai's Expo Village.

Abanos described the contract as a "landmark in the history" of the sub-contractor, which will deliver carpentry and joinery works for the 48.85ha Expo Village site.

READ: Dubai World Trade Centre awards $13m Expo Village contract

9. Takreer awards China-based Wison $80m refinery package

Abu Dhabi Oil Refining Company (Takreer) awarded China's Wison Engineering Services an $80m (AED293.8m) engineering, procurement, construction, and commissioning contract to work on its Sulphur Recovery Unit Replacement Project.

Wison will supply design, testing, and start-up services to the sulphur recovery unit, which is part of Abu Dhabi National Oil Company's Ruwais Refinery Complex. It will complete its scope in 2021.

READ: China's Wison wins $80m EPCC contract for Abu Dhabi project 

8. SSH wins architecture contract for Emaar's Grande Tower 

Architecture services for Emaar Properties' 78-storey Grande Tower in Dubai's Opera District will be supplied by SSH, which won a contract of undisclosed value for the project this month.

The architecture and engineering consultancy was appointed by Canada-headquartered WSP to lead architectural services for Grande Tower, a high-rise building with 866 apartments, including several penthouses.

It is a repeat win for SSH, which has worked on other Emaar projects, such as Creek Horizon.

READ: Dubai's Emaar awards Grande Tower contract to SSH

7. Ducorr to supply Shindagha Bridge with anti-corrosion system

Sharjah-based Ducorr will supply Dubai’s $107.3m (AED394m) Shindagha Bridge with a cathodic protection system (CPS) to help prevent corrosion.

As a cathodic protection specialist, Ducorr will be tasked with protecting key parts of the bridge against corrosion.

In May, Belhasa Six Construct, a unit within Belgian Besix Group, won an infrastructure contract for Shindagha Bridge, which is a key element of the $1.37bn (AED5.1bn) Shindagha Corridor project.

READ: Sharjah firm wins contract for Dubai's $107m Shindagha Bridge

6. CSCEC ME wins repeat work for Damac's Aykon City project

China State Construction and Engineering Corporation Middle East (CSCEC ME) was awarded a $139m (AED512m) construction contract for Damac's mixed-use Aykon City development in Dubai. 

CSCEC ME will build Tower C, a residential tower of Damac's $2bn (AED7.bn) mixed-use development located off Dubai’s Sheikh Zayed Road. This came after CSCEC ME won a $163m (AED600m) contract in February 2018 to build another tower, with space for 53 serviced apartments, at the Aykon City site.

READ: CSCEC ME wins Damac's $139m Aykon City construction contract

5. Arada awards $272m infra contracts for Sharjah megaproject

Sharjah-based real estate developer Arada awarded an infrastructure contract $28m (AED103m) for its Aljada development. Dubai-headquartered contractor BIC Contracting, which was formerly known as HLG, has won the contract. 

The deal is first part of the $272m (AED1bn) total infrastructure package designed by engineering firm Jacobs, which will be awarded for the 2.2km2 project.

READ: Dubai's BICC wins first of Arada's $272m infra contracts in Sharjah

4. Chinese engineer awards Saudi Aramco gas contract to Irish firm

Engineering, procurement, and construction contractor, Sepco-2, awarded a commissioning services contract for Saudi Aramco's gasification project in Jazan to Dublin-based Shanahan Engineering. 

Shanahan will work with Sepco-2 on the Jazan Integration Gasification Combined Cycle (JIGCC) Power Block project. Under its agreement, the Irish contractor will supply a commissioning management team and commissioning management programme.

JIGCC will, upon completion, generate more than 2,500-megawatts of power.

READ: China's Sepco-2 awards contract for Saudi Aramco's Jazan project

3. Operations and maintenance contract signed for $23bn Riyadh Metro 

The second operations and maintenance contract was awarded for Saudi Arabia’s $23bn (SAR86.3bn) Riyadh Metro in September. The Flow Consortium, comprising Alstom, Ansaldo, and Ferrovie dello Stato Italiane, is set to operate and manage Lines 3-6 of the metro.

This comes after Arriyadh Development Authority awarded a similar contract for Lines 1 and 2 to Capital Metro Company, a joint venture of RATP Group’s RATP Dev and Saudi Public Transport Company.

The value of Flow Consortium's contract was not disclosed.

READ: Second O&M contract awarded for Saudi's $23bn Riyadh Metro

2. Consortium clinches $871m Adnoc contract

A consortium of Arabtec Holding’s Target Engineering and Spain’s Tecnicas Reunidas won a $871.2m (3.2bn) contract for Phase 2 of Abu Dhabi National Oil Company's (Adnoc) liquefied natural gas expansion initiative. 

Target Engineering is a subsidiary of Arabtec Holding. Its 54-month work on Adnoc's gas expansion and development project will begin October. 

Gas processing trains, supporting utilities, and offsite facilities to transfer 245 million standard cubic feet a day of additional low-pressure gas to Habshan from Das Island in the UAE will be built for the project.

READ: Arabtec subsidiary's consortium wins $871m Adnoc LNG contract

1. Russia to lead Egypt's biggest rail project through $1bn contract 

A Russia-led joint venture will work on a rail project with Egypt’s Ministry of Transport under an agreement valued at $1.2bn.

Moscow-headquartered Transmashholding is expected to lead the Russian-Hungarian venture that will work on the project, which some has described as the largest rail project in Egypt.

READ: Russia to lead Egypt rail project through $1bn contract

Indian group Transrail Lighting wins Jordan power project

Source: Tradearabia.com

Transrail Lighting Limited, an integrated power transmission and distribution company based in India, has won a $17.23-million order from Jordan's National Electric Power Company (Nepco) to execute conductor replacement for various 132 kV transmission lines in and around its capital Amman on turnkey basis.

A leading EPC company headquartered in Mumbai, Transrail Lighting Limited boasts over three decades of experience in providing comprehensive solutions on the turnkey basis globally.

This is the firm's maiden order from the Middle East region. It entails reconductoring of old transmission line with the new high-end ACCC (Aluminium Conductor Composite Core) Conductor.

ACCC conductors are light weight and have higher current carrying capacity. The project involves replacement of two Lots of 132 kV lines with Lot 1 consisting of 4 lines aggregating 44 km and Lot 2 with 5 lines aggregating 57 km.

Commenting on the win, Managing Director DC Bagde said: "This contract marks Transrail's full-fledged entry in The Middle East, where we were earlier supplying our products. This is an important region for us. We are very proud to win this mandate as it is not only new geography for us but also it involves complex reconductoring."

Bagde pointed out that the advance composite core conductors were lighter and hence the current carrying capacity got increased on same old towers.

"Thus it is going to result in cost savings for the client. These are very old electricity lines passing through a highly populated area in and around the capital city, Amman. Nepco has awarded the contract to Transrail by evaluating our long-standing experience in power transmission. We are committed to complete this job with utmost care for safety and ensuring minimum inconvenience to the residents of Amman," he stated.

Transrail is a major player in the power transmission and distribution, lighting infrastructure, substations and railways sector which caters to customers across India, Africa, Americas and Asia. The company has in-house manufacturing facilities for towers, conductors and poles.

Saudi's PIF is GCC's largest project developer with $534bn pipeline

Source: Arabianbusiness.com

Seven of the GCC's top 10 project developers are from Saudi Arabia, and PIF leads the list with assets such as Neom, Rou'a Al Haram, and Rou'a Al Makkah

Saudi Arabia’s Public Investment Fund (PIF), led by Crown Prince Mohammad Bin Salman, is the GCC’s largest project developer with pre-execution projects worth $534bn (SAR2tn).

PIF is one of the seven Saudi organisations that make up 10 of the GCC’s largest project owners, and its most notable under-development assets include the $500bn (SAR1.9tn) Neom City, in addition to the mixed-use Rou’a Al Madinah and Rou’a Al Haram, each valued at $10bn (SAR37.5bn).

The investment fund is followed on the list by King Abdulla City for Atomic and Renewable Energy (KA Care) and Saudi Aramco. KA Care’s developments are valued at $70bn (SAR262.6bn), while Aramco’s are worth $36bn (SAR135bn).

With a total kitty of $32.5bn (AED119.4bn), Dubai Aviation Engineering Projects is the fourth-largest project owner in the list of the GCC’s top 10, with its most significant development being Phase 2 of the Al Maktoum International Airport Expansion scheme, worth $31bn (AED113.9bn).

Kuwait Authority for Partnership Projects also makes the list of 10, with pre-execution projects worth $31.5bn (KWD9.5bn). Fellow Kuwaiti organisation, the Public Authority for Housing, is among the GCC’s top 10 project owners, with a total pre-execution pipeline worth $29.3bn (KWD8.9bn). The housing authority’s assets include the $13.9bn (KWD4.2bn) Al Khiran City, and the $13.5bn (KWD4bn) South Al Mutlaa City.

These details were revealed by Cynthia Corby, audit and assurance partner, and construction industry leader, at Deloitte Middle East, at Construction Week: Leaders in Construction UAE Summit 2018.

Corby revealed these numbers during her speech, titled GCC Construction Industry Outlook, at the event held in Dubai on 12 September, 2018.

Work on $4bn King Hamad causeway to begin in 2021

Source: Arabianbusiness.com

The causeway connecting Bahrain and Saudi Arabia will include a rail link connecting Bahrain to the wider GCC network

Work on the new $4 billion King Hamad causeway connecting Bahrain and Saudi Arabia is expected to begin by mid-2021, according to Saudi Arabia’s ambassador to Bahrain.

Speaking to Al Arabiya, ambassador Abdullah Al-Sheikh said that “the tender for the King Hamad Causeway will be launched after six months.”

“It is expected that the project execution will start by mid-2021, where it will be complete in three years,” he added.

Al-Sheikh added that the project – which is expected to cost between $3 and $4 billion – will also include a rail line connected to the wider GCC network, as vehicle as vehicle lanes and cargo trains.

In January, Bahrain Economic Development Board chief executive Khalid Al Rumaihi said that he believes Bahrain’s role in the GCC is “not well understood”, and that he believes that the kingdom can become one of several hubs in the GCC, particularly as intra-GCC trade grows.

The value of that trade has already grown from $15 billion in 2002 to more than $120 billion today, “and we think it can get to $500 billion,” he added.

O&M contract awarded for Saudi Arabia's Riyadh Metro

Source: constructionweekonline.com

A contract has been awarded by Saudi Arabia’s Arriyadh Development Authority to deliver operations and maintenance (O&M) services for Lines 1 and 2 of Riyadh Metro. Capital Metro Company (Camco) – a joint venture of RATP Group’s RATP Dev and Saudi Public Transport Company (SAPTCO) – has won the deal, which spans 12 years and includes mobilisation.

Line 1, also known as Blue Line, on the Al-Olaya-Al Batha corridor spans 39km and includes 25 station. Line 2, known as Red Line, runs parallel to King Abdullah Road for 25km, with 15 stations.

Camco will deliver O&M services such as metro operation, security, passenger assistance, and facility management through its contract. Its scope also includes the maintenance of buildings – stations, park and rides, depots, and so on – as well as the transit system, which comprises trains, signalling, telecommunication, power supply, and passenger information, among other aspects.

As part of the contract by Arriyadh Development Authority, Camco must meet a minimum Saudisation target of 45%, and at least 55% of its work must feature local content for the supplies and services it delivers, in addition to on-the-ground logistics support.

Saudi Arabia's privatisation push slows amid rising oil prices

Source: Arabianbusiness.com

Privatisations could exceed $350 billion in about five years according to Mitsubishi UFJ Financial Group's Middle East and North Africa unit

audi Aramco may have grabbed the biggest headlines, but the oil giant’s delayed initial public offering is just the latest sign of Saudi Arabia’s slowing privatisation push.

The programme is part of Crown Prince Mohammed bin Salman’s Saudi Vision 2030 to transform the economy and envisages the sale of stakes in ports, railways, utilities and airports.

When the government began to consider the plans almost three years ago, Brent crude traded at less than $40 a barrel.

With oil prices now twice as high, there seems to be less urgency, even though the International Monetary Fund in July recommended privatisation be accelerated. News in August that the sale of shares in Saudi Arabian Oil Co. was on hold was the most dramatic suggestion that officials were taking their feet off the pedal.

“It is undeniable that the privatisation schedule is running behind what was initially assumed,” said Jean-Paul Pigat, head of research at Dubai-based Lighthouse Research.

“I’m not sure there yet exists a coherent long-term strategy that actually finds the proper balance between the roles for the public and private sector in the economy, and until this is formulated, delaying the privatisation program might actually be in their best interests.”

Saudi Arabia wants to boost non-oil revenue by selling stakes in state assets, including Aramco, the stock exchange and soccer clubs. It set up the National Center for Privatisation in 2017.

Privatisations could exceed $350 billion in about five years, Mitsubishi UFJ Financial Group’s Middle East and North Africa co-head Elyas Algaseer said in August last year. In April, authorities put forward a target of as much as 40 billion riyals by 2020 ($11 billion).

Airport deal

Among proposed transactions yet to be completed are plans to sell a stake in King Khaled International Airport, which are on hold, according to two people familiar with the process. Saudi Arabia’s General Authority of Civil Aviation didn’t respond Wednesday to an emailed request for comment.

The sale of the $7.2 billion Ras Al Khair power plant is also yet to be done. BNP Paribas was hired to advise on the deal in September last year.

While the delays aren’t likely to hurt the economy in the short-term, they raise questions about the government’s commitment to reform and whether its targets were realistic.

In addition to boosting non-oil revenue, the sale of state assets was seen as a crucial step to reduce the dominant role of the state in an economy long-dependent on public spending to create jobs and generate growth.

Privatisation centre CEO Turki al Hokail said the body had “completed a large number of significant milestones” over the past 14 months and the program’s inclusion in Vision 2030 and its political, institutional and regulatory backing showed the government’s commitment to the plans. At least 10 projects are underway, he said in response to questions on Sept. 12.

One of the initiatives that is moving forward is the sale of four flour milling companies by Saudi Grains Organisation, with a Nov. 30 deadline for bidding qualification applications announced on Sept. 5. Still, that’s three years after the idea was announced, and well past the initial target of end-2016 completion.

It’s complicated

The Aramco IPO delay reflects complexities the government faces in opening up the public sector, which suggests that progress in privatisation strategy will be gradual, Moody’s Investors Service Inc. said in a report earlier this month.

Steffen Hertog, an associate professor at the London School of Economics, said progress has been slowed by the sheer scale of the programme, along with gaps in the legal framework and the lack of corporate structures, separate balance sheets or clear revenue models in some targets.

“Privatisation is also made more complex by the fact that the rights of existing Saudi employees will need to be protected and that there are often trade-offs between efficiency, profit and social criteria,” Hertog said.

“Public employment is a core plank of the Saudi social contract and it would be politically difficult if privatised entities suddenly started shedding workers.”

Slower privatisation may be down to a combination of institutional constraints, concerns over public opposition to the sale state assets, and a reassessment of the eventual benefits from the process, Lighthouse’s Pigat said.

“Most assumptions over the pace and scope of the entire reform process were wildly optimistic to begin with,” he said.

“Change in Saudi Arabia has historically occurred at a glacial pace, and while there has undoubtedly been an incredible turnaround and progress in many areas in recent years, expectations need to get recalibrated to a more realistic baseline.”

Top 10 construction jobs in Saudi Arabia for September 2018

Source: Constructionweekonline.com

Saudi Arabia is intensifying its efforts to bolster its construction credentials, with ambitious projects such the $500bn (SAR1.9tn) Neom complex and the 334km2 Qiddiya entertainment city taking up much of the spotlight as the kingdom looks to diversify economically. This is also exemplified by the kingdom's grand Saudi Vision 2030.

With is mind, and with numerous cross-sector projects under way in Saudi Arabia, the choice for those looking to develop their construction career in the kingdom remains incredibly varied.

As construction activity picks up again in the region with the summer months winding down, Construction Week rounds up the top 10 jobs in Saudi Arabia, all of which can be applied for this week.

Employers looking for top talent in the kingdom include Atkins, Louis Berger, Parsons, and Dar Al Riyadh, among other big names in the region.

Apply for the vacancies through BuildingMENA.com, the Middle East's only construction-focused jobs website.

To view these 10 job vacancies see below link:

http://www.constructionweekonline.com/article-50139-top-10-construction-jobs-in-saudi-arabia-for-september-2018/1/

Neom Airport planned for Saudi Arabia's $500 billion mega-city

Source: Arabianbusiness.com

The futuristic city is expected to start taking shape in 2020, with the main city opening five years later

Saudi Arabia’s $500 billion city of the future, Neom, will see its own airport being built near the kingdom’s Tabuk area.

The mega-city, part of Crown Prince Mohammed bin Salman’s plan to diversify the country’s economy away from oil, is planned for Saudi’s Red Sea coast and revolves around artificial intelligence.

Neom Airport is reportedly located 10 kilometers from Sharma, 75 kilometers from Daba and will be initially coordinated with Prince Sultan City.

The airport’s code registered with the International Civil Aviation Organization is OENN.

Moreover, it will boast a runway of 3,757 metres long at 151 degrees on one side and 331 degrees on the other.

Neom, short for Latin-Arabic term Neo-Mustaqbal, which means "new future", is expected to start taking shape in 2020, with the main city opening five years later.

"Everything will have a link to artificial intelligence, to the Internet of Things - everything. Your medical file will be connected with your home supply, with your car, linked to your family, linked to your other files, and the system develops itself in how to provide you with better things,” the Crown Prince said in an interview with Bloomberg.

"Today all the clouds available are separate - the car is by itself, the Apple watch is by itself, everything is by itself. There, everything will be connected. So nobody can live in Neom without the Neom application we’ll have - or visit Neom," he said.

The 26,500 square km city will also most likely allow only electric vehicles to operate within its confines, according to its then-CEO Klaus Kleinfeld, a German executive who ran Siemens and Arconic. Kleinfeld left his role to become adviser to the Crown Prince.

“The ‘Neomians’ will...see it differently,” he said at the Gateway Gulf Investor Forum in Bahrain this year.

“For them, a car is one way of transportation, which you will have at your fingerprints. You push [a] button and the vehicle that you want shows up.”

Kleinfeld noted at the time that NEOM will be a showcase of what he termed a “post-industrial” lifestyle.

A number of hotels are already under construction in the area, which will also boast a summer resident for the Crown Prince and his father, King Salman.

In February, the Saudi Arabian government began to award contracts for the development of a NEOM in the northwest of the country, asking local construction companies to build five palaces there.

In July, King Salman chose to spend a “relaxing” holiday in the undeveloped city as opposed to his regular exotic destinations such as Morocco. A month later, he held his first-ever cabinet meeting in the futuristic city to show support to the project.

Saudi's Public Investment Fund names ex-Dow Chemical CEO as special adviser

Source Arabianbusiness.com

Andrew Liveris, who will be an adviser to Crown Prince Mohammad Bin Salman, currently serves on the board of Saudi Aramco

Saudi Arabia’s sovereign wealth fund appointed former Dow Chemical Co chief executive officer Andrew Liveris as a special adviser.

Liveris will work closely with the Public Investment Fund "in several areas and assist the fund in efforts to increase the value of the portfolio, and ensure the important contribution of PIF companies to the achievement of Vision 2030 goals" of the oil-rich kingdom, according to an emailed statement.

He will be an adviser to Crown Prince Mohammad Bin Salman, who is also PIF chairman, and the fund’s board. Liveris currently serves on the board of Saudi Aramco, the world’s biggest crude oil exporter.

The PIF is at the centre of Saudi Arabia’s efforts to diversify revenue away from oil under an economic transformation plan known as Vision 2030. It holds about $150 billion of assets in listed Saudi companies, including stakes in Saudi Basic Industries Corp., the world’s second-biggest chemicals manufacturer.

Saudi Aramco's IPO delay carries silver lining for Riyadh stocks

Source: ArabianBusiness.com

The decision to put the oil giant's market debut on hold has removed a threat to investments in other Saudi stocks from what was set to be the world's largest IPO

There is a silver lining for Riyadh-traded stocks in the delay to Saudi Arabian Oil Co.’s massive initial public offering.

While putting the oil giant’s market debut on hold has reduced Saudi Arabia’s likely profile on emerging-market equity indexes when the kingdom joins them next year, the decision has also removed a threat to investments in other Saudi stocks from what was set to be the world’s largest IPO.

Listing Aramco would be “very positive long term, but at the time of the IPO, our biggest concern would be a drain of liquidity, because you would see a lot of investors selling off their shares in order to fund their applications for the IPO,” Fahd Iqbal, head of Middle East research at Credit Suisse Group AG, said in an interview with Bloomberg Television. “With the removal of that IPO for the time being, it removes a little bit of that overhang.”

When the IPO was initially flagged in 2016, Saudi officials hoped it would raise as much as $100 billion, based on a $2 trillion valuation that some analysts and investors have said was too high. With Aramco valued at those levels, Saudi Arabia was set for a weighting of almost 5% in MSCI Inc.’s emerging market indexes, according to estimates by EFG-Hermes Holding Co., bigger than Hong Kong, Russia or Mexico. Without Aramco, it’s looking more like 2.6%.

Saudi Arabia last week placed the share sale on hold as Aramco instead focuses on buying a stake in petrochemical maker Saudi Basic Industries Corp., or Sabic, for as much as $70bn. For the 32 Saudi companies under consideration for the MSCI indexes, the decision could prove a positive as it rules out a potential dilution under index composition rules, according to Mohamad Al Hajj, an equities strategist at EFG-Hermes.

Saudi Arabia’s markets regulator and the stock exchange have carried out reforms in the past few years aimed at attracting foreign investors and securing an upgrade to emerging-market status by foreign index compilers. FTSE Russell and MSCI announced earlier this year that the country will join their developing country benchmarks in 2019, a promotion that wasn’t tied to an Aramco IPO.

Passive investors use the indexes to guide their stock selections, with the MSCI gauges alone influencing $1.9tn of emerging-market allocations. Aramco’s IPO could attract as much as $11bn from fund managers, according to estimates by EFG-Hermes.

Sabic, the biggest Riyadh-traded company by market capitalization, is expected to be the largest Saudi representative within MSCI and FTSE indexes, drawing about $2.9bn to the local market, Al Hajj estimates. Al Rajhi Bank, National Commercial Bank and Saudi Telecom Co. are among other large-cap stocks Al Hajj sees on foreign investors’ radar.

“In general, the sort of international investor who would have considered Aramco would have less interest in Saudi domestic stocks,” said Hasnain Malik, global head of equity research and strategy at Exotix Capital in Dubai. “The local investor base might have cannibalized their holdings in the chemicals sector, assuming their overall investment in the market was constant.”

Kuwait said to start work on 111km railway project

Source: Arabianbusiness.com

First phase of railway project to connect Kuwait with the rest of the Gulf region will reportedly cost $3bn

Work has reportedly started on a 111km railway project to connect Kuwait with the rest of the Gulf region.

According to a report by Al Anba newspaper, the first phase of the project will create a new line to Nuwaiseb on the Saudi border and a 153km line linking Kuwait City with Boubyan Port.

Citing senior officials, the newspaper said phase one will cost an estimated $3 billion.

The 2,100km passenger and cargo network stretching through all six Gulf states from Kuwait to Oman has faced technical and bureaucratic obstacles, and stalled as state budgets tightened because of low oil prices.

Bahrain has said it would not connect its network to a neighbouring state, Saudi Arabia, until at least 2023.

Jacobs Engineering Group wins contract renewal from Saudi Aramco JV

Source: http://meconstructionnews.com

Services will be provided by Jacobs Engineering Croup’s Jacobs Zate subsidiary

Saudi Aramco Total Refining and Petrochemical Company (Satorp) has awarded Jacobs Engineering Group with a two-year contract renewal to provide general engineering services in the Kingdom. The services will be provided by Jacobs’ Jacobs Zate subsidiary, which comprises Jacobs Zamel and Turbag Consulting Engineers.

Satorp is a joint venture refinery set-up by Saudi Aramco and French energy firm Total. The JV is based in the Jubail region of Saudi Arabia and has the capacity to process 400,000 barrels per day (bpd) of Arabian heavy crude oil.

As per the terms of the contract, Jacobs will continue to provide services ranging from basic engineering to Front End Engineering Design (FEED), detailed design, procurement through to construction management, commissioning support, and handover of small- to medium-sized capital investments to sustain the operations of the Satorp Jubail II refinery.

“Satorp’s continued trust in our proven capabilities as a world-class engineering and construction management company is a testament of our commitment as a valued partner in the region,” said David Zelinski, senior VP and GM for Jacobs Energy, Chemicals and Resources (EMEA).

The services will be delivered by a team from Jacobs Zate in Al Khobar, Saudi Arabia, said the US company in a statement. Jacobs has been operating in Saudi Arabia for more than 40 years and is said to have developed strong partnerships with Saudi Aramco, Saudi Basic Industries Corporation (Sabic) and Saudi Arabian Mining Company (Ma’aden).

“This contract renewal reaffirms our strong relationship with Satorp and our long-standing position in the kingdom,” Zelinski added.

SNC-Lavalin gets $90-million contract for electric substations in Dubai

Source: canadianbusiness.com

The Montreal-based engineering and construction company says it received the contract from Meydan Group LLC

MONTREAL — SNC-Lavalin has been awarded a $90-million contract for the design and delivery of three electric substations in Dubai.

The Montreal-based engineering and construction company says it received the contract from Meydan Group LLC.

The substations will be used for the Meydan One development, which will be home to 83,000 people.

SNC will provide three two-storey buildings, all electrical equipment and electro-mechanical works for the substations.

The substations are expected to be energized in late 2019.

Chinese firm wins $150m EPC contract for Dubai's California Village

Source: constructionweekonline.com

A Chinese company has won Bahrain-headquartered Global Financial Group’s (GFH) engineering, procurement, and construction (EPC) contract for its California Village project in Dubai.

China Machinery and Engineering Corporation (CMEC) will build, and finance up to 85% of the Dubailand development, at a cost of $150m (AED551m).

Under the contract, Chinese banks will deliver finance through an insurance policy that will be issued by state government agencies.

California Village is a high-end mixed-use gated community comprising 200 private villas and 400 branded residences. It is located across the IMG Worlds of Adventure theme park along Dubai’s Sheikh Mohammed bin Zayed Road.

CMEC will implement all work related to the completion of villas, apartments, and related facilities and amenities.

Commenting on the contract, Hisham Alrayes, chief executive officer of GFH, said the company would explore further work with CMEC as it eyes investments of up to $1bn across the Gulf.

He continued: “California Village will mark our first cooperation and we expect to build on this relationship with CMEC and other Chinese partners to undertake works that reach up to $1bn, covering other projects currently under discussion in the Gulf region.

“We look forward to obtaining the necessary approvals and concluding this important milestone successfully.”

Bahrain construction sector grows amid new infrastructure and energy projects

Source: Zawya.com

The sector’s strong performance helped to offset a 14.7% contraction in the oil industry

Rising investment in infrastructure and stronger capital inflows for industrial expansion are combining to boost activity in Bahrain’s construction sector, which expanded by 6.7% year-on-year (y-o-y) in the first quarter of 2018, according to data released by the Information and eGovernment Authority last month.

Given that the sector makes up around 7.5% of overall economic activity, construction growth, along with first quarter gains in manufacturing (4.2%) and real estate and business activity (3.7%), contributed to the non-oil sector’s y-o-y expansion of 1.9%.

The sector’s strong performance helped to offset a 14.7% contraction in the oil industry, caused by a drop in production. However, the weaker showing by the energy sector drew overall GDP into negative territory, contracting by 1.2% y-o-y in the quarter.

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Infrastructure projects drive activity

Construction is expected to continue to be a driving force for the economy in the short to medium term, with the increased flow of state-backed infrastructure developments filling order books and injecting capital into the country, according to a report from the National Bank of Kuwait (NBK).

Released in mid-June, the report said plans to carry out $8bn in infrastructure projects in areas such as transport, utilities and housing – the country’s largest-ever pipeline – will underpin non-oil growth, which the bank forecasts will expand by 4.7% this year and 4.5% next. NBK predicts headline GDP growth will recover to 3.8% over the next two years.

Rising activity levels in the construction sector were key factors in increased lending by Bahrain’s banks, which posted 9.7% credit growth in the first quarter, more than three times the 2.9% growth recorded during the same period in 2017.

A major development in the construction phase is local company Aluminium Bahrain’s $3bn Line 6 smelter expansion.

Expected to come on-line in January next year, the new line will lift annual output by around 540,000 tonnes to 1.5m, and will see the company account for some 25% of the GCC’s aluminium production capacity, Tim Murray, the firm’s CEO, told OBG.

Oil finds and downstream upgrades bolster prospects

While non-oil sector developments have largely driven recent construction activity, the need for new infrastructure to support recent energy finds should also provide a fillip in the coming years.

Announced at the beginning of April, the finds in the Khaleej Al Bahrain basin amount to as much as 80bn barrels of oil and up to 20trn cu feet of gas, representing the country’s first major hydrocarbons discovery since 1932.

Although it is estimated that production will not begin before 2023 or later, construction work is required in the near term to install the necessary infrastructure and capacity to extract and process the reserves.

The construction sector is also expected to benefit from the ongoing $5bn modernisation programme undertaken by the national oil producer, Bahrain Petroleum Company (Bapco).

Due for completion in 2022, the plan aims to upgrade existing infrastructure, improve efficiency and lift processing capacity at the Sitra oil refinery from 267,000 barrels per day to 360,000.

The work associated with the rollout, combined with the energy finds, is encouraging domestic contractors to take on more staff and prepare for an extended period of increased activity, according to Issam Abu Hamad, executive director of construction and associated activities firm Mechanical Contracting and Services Company.

“We were already planning for three to four years of growth due to the Bapco modernisation programme, which we expected to be followed by a drop-off in work,” he told OBG. “However, with the new oil find announcement, this dynamic may change and could mean some more sustained long-term growth for Bahraini contractors.”

© Oxford Business Group 2018

By Staff Writer, Oxford Business Group

Saudi cement firms raise output for $500bn Neom City project

Source: ArabianBusiness.com

Tabuk Cement and Hail Cement, both located in Saudi Arabia's northern region, have increased output almost every month this year

At least two Saudi cement makers are churning out production to cash in on the birth of a futuristic, $500 billion city called Neom, according to analysts tracking the industry.

Tabuk Cement and Hail Cement, both located in the desert kingdom’s northern region, have increased output almost every month this year while most of their 15 peers produced less, according to data compiled by Bloomberg.

Output for the two companies for the six months ending in June surged 20 percent and 55 percent, respectively, compared with the same period last year - several times faster than for their biggest peer, Saudi Cement Co.

Crown Prince Mohammed Bin Salman announced plans last year to build Neom, promising a hyper-high-tech lifestyle unavailable in today’s Saudi Arabia, as he seeks to diversify the economy away from oil. Ambitious projects like Neom, which is to encompass a total area of 26,500 sq km - larger than Rwanda or Belize, figure prominently in the Saudi transformation strategy known as Vision 2030.

At the time of the prince’s announcement, the government said Neom would be backed by more than $500 billion in state and private funds. Shares of cement makers surged then.

Hail and Tabuk are beating volume trends as “some contracts were awarded in the Neom area earlier this year,” said Anoop Fernandes, an analyst at Manama, Bahrain-based investment bank SICO. “Both companies are yet to report, so we have to see what the level of pricing is. Tabuk’s average selling price was down 23 percent year-over-year in the first quarter.”

Saudi cement companies are waging a price war, and the industry’s performance has been disappointing this year because project awards have been“extremely subdued,” Fernandes said. Adding to the pressure: The government is trimming subsidies and costs are rising as the country struggles to develop new industries and sources of revenue.

“Tabuk and Hail are comparatively the main beneficiaries of Neom project,” said Sameer Kattiparambil, an analyst at the research arm of EFG-Hermes Holding in Muscat, Oman.

“Elsewhere in the country, cement demand has been consistently slower, lower by 13 percent year-to-date, as the construction sector activities continue to stay weak.” He expects cement demand to pick up early next year.