Overall Value of Contract Awarding Increased to SR26.8bln

Total value of awarded contracts during the third quarter of 2021 continued to rise, to reaching 26.8 billion ($ 7.2 billion), as the growth is being achieved, for four consecutive quarters, the US, Saudi American Business Council announced.

The value of awarded contracts increased by 4% on a quarterly basis, and 262% on an annual basis.

Thus the total value of awarded contracts during the first three quarters amounted to SR71.8 bln ($19.1 billion), has achieved an annual increase of 13%.

The index of the Saudi American Business Council for awarding contracts had jumped to 114.84 points by the end of the third quarter.

The current momentum in awarded contracts over four consecutive quarters of growth, has led to a rebound in the awarding index.

This indicates that the growing number of awarded contracts will increase the number of projects that will enter the implementation phase during 2022, after the marked slowdown in 2020 and the beginning of 2021.

The award index has achieved a growth of 13.09 points, or 13% on a quarterly basis, and 9.58 points, or 9%, on an annual basis.

On a monthly basis, the contract award index, during the third quarter of 2021, reached 100 points, in July, and rose to 106.07 points, in August, before settling at 114.84 points, in September.

Distribution of awarded contracts across top performing sectors

Real estate: The total value of contract awards in the real estate sector reached SR6.2 billion ($1.7 billion) during the third quarter of 2021, which represents the highest quarterly value of contract awards in the sector this year, despite only eight contracts being awarded in the sector.

The share of the commercial real estate market reached SR3.5 billion ($928 million), or 56% of all awarded real estate contracts, while the share of the residential real estate market reached R2.6 billion ($692 million), or 42% of all real estate contracts.

That was awarded, and hospitality projects received SR150 million ($40 million), equivalent to 2%.

Then, the real estate sector witnessed a growth of SR3.2 billion ($ 908 million) on a quarterly basis, and SR5.1 billion ($ 1.4 billion), or 461%, on an annual basis.

It is noteworthy that the real estate sector, from the beginning of 2021 to date, has exceeded all contracts awarded during 2020, the value of which, as recorded, was SR13.3 billion ($3.5 billion), compared to SR4.5 billion ($1.2 billion) during the third qu

energy

After five years of stagnation in the award of contracts, the energy sector continued to recover during 2021, as the total value of contract awards, amounting to 18 contracts, reached SR4.7 billion ($1.3 billion) during the third quarter of 2021. Despite the decrease in the value of contract awards in the energy sector by 37%, it achieved a significant growth of 206%.

The value of contracts awarded in the energy sector from the beginning of 2021 to date, has witnessed an annual growth of 290%, with the increase in the Saudi Electricity company’s investments in expanding the electricity transmission network in the Kingdom, in addition to improving the existing networks.

Transport

The transport sector has experienced a significant recovery during 2021, after the decline it has undergone, during 2020. The total value of the award of 11 contracts in the transport sector amounted to SR4.6 billion ($1.2 billion), which represents the highest performance of the sector, in 2021, so far.

It achieved a quarterly growth of 45%, and a huge annual growth of 168%.

The transport sector, from the beginning of 2021 to date, has exceeded the annual figure for 2020, and increased by S6.6 billion ($ 1.7 billion), or 186%, on an annual basis.

Contracts for several roads, airports, ports, and ports were awarded during the third quarter of 2021; led to this huge increase.

Water

The Saudi Water company has awarded three major contracts in the field of developing wastewater treatment plants in three regions, with a total value of SR1.4 billion ($360 million), enabling the water sector to achieve the fourth highest value from awarding contracts, and is very close to the transportation sector.

All three contracts were awarded to the Acciona Alliance/Distribution/Cohesion.

Overview of awarded contracts by region during the third quarter of 2021.

Riyadh ranked first in terms of the value of contracts awarded in the third quarter of 2021, at about SR10 billion ($2.7 billion), or 37% of the total value of contracts.

About 22 contracts were awarded in Riyadh region across several sectors.

The real estate, transportation and energy sectors accounted for 88% of the value of contracts awarded in Riyadh.

Total value of awarded contracts in the Riyadh region from the beginning of 2021 to date, amounted to SR19.3 billion ($ 5.1 billion), equivalent to 27%.

As for the eastern region, which was ranked first among all regions, during the first two quarters of the year, it fell to the second place with a value of SR7.3 billion ($1.9 billion), or 27% of the total value of contracts.