February 28, 2024

Economic Diversification to Act as a Driving Force for Saudi’s Trillion-Dollar Construction Market

Image by Hands off my tags! Michael Gaida from Pixabay

Linesight, a leading cost and management consultancy having GCC based pipelines worth over a whopping US$10 billion activity in the construction sector throughout the GCC countries, stated that turbulent times would start recovering slightly post the beginning of 2020, challenging post period of the subdued performance.

It states that the long-term encouraging factors like that of the economic diversification, social reforms, general demographic demand, in combination with renewed government ambition would act as the core driving forces.

As well, Saudi Arabia at present holds the topmost potential for the construction sector within GCC, with over 5,000 or more capital projects worth over a whopping US$1.6 trillion in the pre-execution stage itself.

This massive project includes over 150 development projects worth US$3.27 billion, for the Tabuk region, in the northwest of Saudi, that were announced by none other than Saudi’s King Salman bin Abdulaziz, in November last year. The King has also launched over 600 projects in Qassim, 400 km northwest of Riyadh, worth US$4.36 billion and around another 200 new projects in Hail, in the northwest part of the Kingdom, valued at US$1.14 billion.

However, the most ambitious and core project is that of the ambitious Vision 2030 initiative, which is worth US$500 billion, 26,500 square km, Neom project, that is situated alongside 468 km of Saudi’s Red Sea coast close to Egypt and Jordan. The initial phase of the Neom is due for the completion in 2025.

According to Damien Gallogly, Regional Director for the Middle East at Linesight, having the offices in Riyadh, Dubai and Bahrain stated that “In naturally many native industry professionals are upbeat about prospects of Saudi Arabia.”

He also added that “Saudi Arabia is as well as actively seeking for improving the rail, airport, port as well as other transport-related infrastructure having a surge in domestic supply, healthcare, leisure, and tourism facilities. Signaling exciting days indeed ahead, the Kingdom remains without any doubts the most active construction market across the region.”

“To underpin social demand, the Saudi government has overseen a serious cultural and social transition since 2017, that has allowed mixed audiences at cinemas associated concerts and brought a finish to restrictions on ladies traveling alone,” stated Gallogly.

The project developments in Linesight’s own GCC pipeline presently value in far more than US$10 billion, with average annual revenue growth of over 6 %. Some of a lot of distinguished developments in Kingdom of Saudi Arabia embraces the US$4 billion Thakher town mixed-use project in Makkah and also the Al Faisaliah District renovation project in the capital of Saudi Arabia that involves upgrading the Al Khozama, retail, welcome, and business complicated.

Saudi’s General Sports Authority (GSA) has conjointly launched the world’s richest race, with prize totalling US$20 million and it’s conjointly creating combined efforts to bring Formula One to the dominion when the successful running of the inaugural Formula E in the capital of Saudi Arabia last year.

The independent agency has conjointly confirmed that Saudi can host the planet heavyweight title boxing repetition between Andy Ruiz and Anthony Joshua, in the capital of Saudi Arabia later this year, following recent debuts for the ECU Golf Tour and WWE wrestling.

Doubts are forged whether or not Saudi are ready to fund the belief of Vision 2030. And with the United States oil extraction at a record twelve.32 million barrels per day on the average, the US-China trade tensions dragging on and also the retardation international economy, on the surface, the task appearance difficult.

However, Saudi’s allow 2019 is US$295 billion, a seven-membered increase over 2018. The economic and social reforms are designed to draw in a lot of foreign direct investment, that stood at US$3.5 billion in 2018, already double that in 2017.

Saudi still has bound state assets that the govt aims to get over US$10 billion through its privatization program, all the same, the aborted Saudi Aramco IPO. Last, however, by no suggests that least, there’s the Saudi sovereign wealth fund that ought to surpass US$600 billion by next year. “Saudi Arabian Peninsula is committed to finishing these comes and is assured that it’ll realize the suitable finance to try to to therefore. it’s this strategic intent that, in my opinion, makes the dominion the foremost dynamic construction market within the Middle East,” Gallogly as mentioned above.



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