The value of projects under construction across the Middle East rose 5 per cent in the third quarter of 2013, according to MEED’s Top 100 Middle East Projects index, which tracks the value of the 100 biggest projects under con¬struction across the region.
With a combined value of $275.7bn, the index is at its highest point for more than a year underlining the resurgence in the region’s major projects market.
The increase is the result of government decisions to push ahead with multibillion-dollar transport spending programs.
Twelve major projects started construction in the quarter and joined the latest list while 10 projects, worth $23.8bn were completed in the period and so fall out of the table. The index was pushed higher chiefly because of the $22.5bn Riyadh Metro project in Saudi Arabia. In total, there is $38.8bn-worth of new projects in the latest Top 100.
Within the Top 100, the transport sector leads, with $81.9bn-worth of projects under way. This is a 53 per cent increase in value on the previous quarter and means the value of contract awards across the sector has risen 79.5 per cent since the start of 2013.
In a sign of current projects trends in the region, rail developments now account for three of the biggest five projects under way in the Top 100 and for more than $53bn of the total transport awards listed.
Two rail projects, in particular, have driven the value of transport awards within the Top 100 – the previously mentioned Riyadh Metro and the $6.2bn of awards made for the Doha Metro in Qatar.
Overall, Qatar will spend about $21bn on building the Doha Metro and more awards are due. This includes the $3bn contract for tunneling works on the Gold line, which expected to be awarded before the end of the year.
Transport, and in particular rail, will continue to feature heavily in the Top 100 over the coming few years, as countries upgrade or build their infrastructure.
In total, there is about $290bn-worth of transport infrastructure projects planned in the Middle East, of which about $115bn-worth are rail schemes of a value that could see them appear in the Top 100 list (those of $1,5bn or higher). This includes:
• Jeddah Metro, Orange and Blue lines ($10bn; main contract award expected in July 2014) and Green line ($1.9bn; award expected in early 2015)
• Oman National Railway, phase 1 ($7bn; award expected 2014)
• Etihad Rail, phase 2 in UAE ($3bn across six sub-packages; award expected before the end of 2013)
As the region’s economies improve, real estate schemes are again making headlines, particularly in Dubai. So while construction awards have remained static in 2013, we expect to see their value rise during 2014, as main contracts are awarded. At least $20.7bn-worth of construction projects across the UAE and Saudi Arabia are expected to have been awarded by the end of the first quarter of 2014.
By country, Saudi Arabia ($101.1bn) continues to be the biggest projects market, fol¬lowed by Iran ($67.5bn) and the UAE ($44.7bn).
Last year, Saudi Arabia was a disappointment in terms of contract awards, as a number that were expected to be made did not materialize, but in the third quarter the value of projects in the kingdom featuring in the Top 100 rose 35 per cent on the previous quarter.
Transport is the biggest sector by value in Saudi Arabia for the Top 100 ($46.3bn), pushed up by Riyadh Metro. In late July, the main contractors for the three packages to build the metro were announced, and sub-contracts will continue to be awarded by each consortium. Tender documentation for early works packages is being prepared for Lines 1 and 2, being built by the Bechtel-led consortium, with the contracts expected to be awarded during the first half of 2014.
Overall, there are about $320bn-worth of projects planned and yet to be awarded in Saudi Arabia, of which about $240bn-worth are of a value that could appear in future Top 100 Projects lists. Contracts close to being awarded include:
• Ras Tanura expansion project ($3bn; contract award expected Q1 2014)
• Acrylonitrile petrochemicals plant, Jubail (main contract award expected Q1 2014)
• Rabigh 2 IPP ($1.5bn; main contract award imminent)