Saudi Arabia’s master plan Neom mega-project is steadily advancing from the drawing board. After five years of spending cuts, the growing momentum in Neom’s tender issues is good news for contractors.

GlobalData’s MEED says that it is hoped that these tenders will quickly translate into awards that can boost the construction company’s financial health and restore confidence in the Saudi construction sector.

US corporation Aecom was named project management consultant for the development of Neom Bay in 2019, months after Riyadh approved the creation of Neom as a public company, wholly owned by the Public Investment Fund, to develop the project.

Since 2019, Neom has awarded contracts worth around 1.43 billion US dollars for construction and transportation projects, it said.

According to the report, tendering for residential projects has picked up speed in recent weeks.

Two tenders for one- and two-bedroom apartments have been published under Neom’s Community Expansion 3 program, as has a separate tender for 25 apartments with Neom Zero, according to GlobalData.

Contractors are believed to have expressed interest in a public-private partnership (PPP) package earlier this month for a residential project in the 120km-long Gulf of Aqaba project.

Richard Thompson, Editorial Director of GlobalData’s MEED, said, “In the three years prior to its launch, low oil prices had resulted in payment delays and new construction projects in the kingdom stalled.”

“The cash flow crisis that followed hit the Saudi Binladin Group and Saudi Oger, two of the kingdom’s largest contractors at the time,” noted Thompson.

“Riyadh has since consolidated the construction sector by facilitating outstanding payments from contractors, curbing the local market’s appetite for accelerated pre-oil crash programs, and enacting laws regulating employment and tendering activities in the industry,” he added.

Construction projects related to Vision 2030 such as Neom should benefit from these measures.

Thompson noted that approximately $ 667 million of these contracts involve construction of commercial, industrial, and office buildings across the Neom property, while a $ 160 million contract is for road and infrastructure development Sindalah Island is intended.

Contracts worth $ 1.3 billion are in the tendering phase, he added.

Neom recently received expressions of interest in a mobility hub planned for its base camp. The tender should include areas for electromobility management and infrastructure, electric whiz, landing hangars and drone transports.

The line, the 170km car- and road-free belt of hyperconnected cities, launched by Crown Prince Mohammed bin Salman in January, has also driven advances in infrastructure projects within Neom.

Companies have been asked to bid by December 30th to build 31km of tunnels that will be part of The Line’s infrastructure backbone.

In June, China Railway Construction Corporation was selected for the gallery and portal package, which includes the openings and access points for the tunnels.– TradeArabia news service