Saudi Arabia makes a quiet start to 2014; social sectors to remain the focus this

year
Saudi Arabia retained its status as the biggest projects market in the Middle East in 2013 despite falling
short of projections. The $64bn worth of contracts awarded in 2013, was some $9bn short of
expectation, but the pipeline of potential projects remains substantial.
The countrys 2014 budget priorities remain quite similar to those of 2013. According to the document
released by the Saudi Ministry of Finance, government spending will touch $228bn and social
infrastructure projects in education and transport will continue to remain key focus areas. Importantly,
about $8.8bn have being allocated for water projects which will include construction of dams,
desalination plants, deep aquifers wells and also expansion and refurbishment of water transmission
networks.
During December 2013, nine projects were awarded with a total contract value of $3.3bn. The chemical
sector dominated the awards. The three packages of the Waad Al Shamal Phosphate City project were
awarded to China Huanqiu Contracting & Engineering Corporation (HQCEC), Hanwha and a joint venture
of SNC Lavalin and Sinopec for a total contract value of $2.25bn. This was followed by the construction
sector with five awards worth $839m.
In January 62 projects are scheduled for award, carrying a total estimated budget of over $15bn.
However, halfway through the month only one $300m power transmission project has been awarded by
SEC to Larsen & Toubro. About 57 projects of which 37 are buildings worth $3.5bn, remain at main
contract bid. This is followed by transport with 17 projects worth $2bn.
Saudi Arabia continues to maintain a substantial flow of new projects, a trend observed since mid 2013.
In January so far, 16 new opportunities have been announced, which include:

National Water Company - Al Khumra 2&3 WWTP Rehabilitation ($213m)

SEC - 380kV Hail 3 Substation ($176m)
RCJ&Y - Ras al-Khair Industrial City: Zone B (Part 1): Infrastructure ($82m)

The line-up for February shows similar figures to that of January: a total number of 62 projects
scheduled for award of which 57 are in the bidding stage, worth $6.5bn. Some of the major projects
scheduled for awards are:

Ministry of Health - King Abdullah Medical City in Mecca ($1.7bn)

Maaden/Mosaic/Sabic - Waad Al Shamal Phosphate City: Phosphate Mines ($1bn)
GACA - King Abdullah bin Abdulaziz Airport in Jazan ($900m)
Mecca Municipality - Mecca Solar Power Project ($640m)

Arriyadh Development Authority remains in first position in the list of Top 10 Project Owners ranked by
value of contracts awarded over the 12-month period to January 2014, with awarded contracts
exceeding $23.2bn. The Saudi Electricity Company climbs to second place as Ministry of Higher
Education falls one place to ninth followed by the National Water Company at tenth with awards worth
$795m.

Saudi Binladin Group tops the list of Top 10 Main Contractors ranked by value of contracts awarded
over the 12-month period to January 2014 having won contracts in excess of $4.6bn. Almabani, Bechtel
and CCC are jointly ranked third and Samsung C&T and FCC are jointly ranked sixth.

The schedule of awards in the first quarter of 2014 shows a line-up of 126 possible contract awards,
worth a total $28bn. Construction and power are the top two sectors by value of projects.

Taking into account the indications in the budget and assuming the trend of new projects continues,
2014 is likely to see a significant increase in opportunities for the water and construction sectors,
though the pace of awards may continue to drag.