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Big events take priority for stretched Saudi builders

Saudi construction delay Shutterstock
Despite a slowdown for some Saudi construction schemes, housing and infrastructure will remain top priorities, observers say
  • Delays in 2030 construction ‘inevitable’
  • Concentration on international events
  • Smaller projects under scrutiny

There will be delays in delivering Saudi Arabia’s massive construction pipeline in time for 2030, but projects directly linked to specific international events such as the Asian Winter Games in 2029 will take priority, industry players told AGBI at the Big5 conference in Riyadh last week.

About $1 trillion in giga-projects are under way across Saudi Arabia, ranging from dozens of high-end hotels along the Red Sea coast to Neom, a futuristic new mega-city planned in the kingdom’s north-western corner.

Sean Doherty, head of programme and project management in Riyadh for the consultancy JLL, said housing, infrastructure and other projects vital to accommodate more people and advance economic growth will remain top priorities.

The kingdom is slated to host several global events, chief among them the Asian Winter Games in 2029, the Expo in 2030, and the football World Cup in 2034. The kingdom will have to continue at full speed on the construction programmes for these ambitious international commitments. 

The Asian Winter Games will be hosted in a planned mountain resort by the name of Trojena, part of the larger Neom project.

“Trojena has got to be developed,” Doherty said. “The Expo is also going to be a big one.”



Riyadh, where the World Expo 2030 event will take place, needs about 100,000 new hotel rooms to cope with that and other global events, according to various estimates.

Doherty said there were “lots of challenges around that. The government is working towards all the big events. But we need more players to come to the market”.

In December the Saudi finance minister, Mohammed Al Jadaan, in an interview with Bloomberg, acknowledged for the first time that the government had decided to postpone certain projects’ deadlines for completion by three to five years, while plans for others would be “rationalised”.  

Al Jadaan said the delays would boost capacity in the Saudi construction industry, reduce supply chain bottlenecks and avoid excessive inflationary pressures on the economy.

The minister did not specify which developments would be delayed.

The construction industry in the kingdom is currently operating under the eight-year-old Vision 2030 roadmap, a multi-trillion dollar plan to diversify the Saudi economy and boost residents’ social and cultural well-being.

Expect Vision 2040

As that deadline approaches, the expectation is that the government will soon release something of a follow-up, a Vision 2040, said Jason Morris, the managing director of KEO’s project and construction management division.

“Everything was never going to be finished by 2030, so Vision 2040 is what happens next,” he said. 

Morris said last year in particular saw authorities increase scrutiny of many projects’ expected return on investment. While performances in and around Riyadh and Jeddah continue to look strong, the picture might be less obvious in smaller, secondary cities.

“I think that as opposed to a funding issue, there’s been a realisation that the investment that they’re making could be better spent,” Morris said. “So I think organisations have just slowed down while reassessing. I don’t think anything stopped.”

Regardless of likely construction delays, Morris said, Saudi Arabia’s construction programme remains “like nothing anybody has ever seen” and “the volume of work still coming into the market is unprecedented”.

Wael Darkazanli, chief operations officer of Atheel Contracting, which has its headquarters in Riyadh, said timelines may change depending on government policies and priorities, “but what we see is, even if some projects may be delayed and priorities may change, the big picture is that Saudi Arabia is booming and there are a lot of opportunities here”.

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