Kamco Invest: Saudi Arabia ranks second in new projects ‎among GCC during Q3, with value of $3.5 bln ‎

The Kingdom of Saudi Arabia ranked second as the largest market for new projects at the level of the Gulf Cooperation Council countries in the third quarter of 2022, with contracts awarded during the period amounting to 3.5 billion dollars, according to a KAMCO Invest report.

According to the report, the contracts awarded in the Kingdom during the third quarter of this year are the worst since the height of the “Covid-19” pandemic in the third quarter of 2020; this reflects the deteriorating global economic outlook along with rising inflation.

The Kamco Invest report stated that the value of contracts awarded in the Kingdom during the third quarter of 2022 witnessed a quarterly decline of 78.5%, to reach $3.5 billion, compared to $16.5 billion in the second quarter of the same year.

At the level of sectors, the construction sector regained the lead as the largest sector in terms of the value of projects granted in the Kingdom with 41.6% (1.5 billion dollars) of the total projects granted in the Kingdom during the third quarter of 2022. This is mainly due to the lack of new projects, and contracts of limited size in other key sectors.

The Saudi building and construction sector is considered a leading sector in the Gulf Cooperation Council countries in terms of major projects, as there were seven construction projects with a contractual value of more than $500 million awarded in the GCC during 2022, all of which are in the Kingdom of Saudi Arabia.

The contracts awarded from the NEOM project worth $500 billion are expected to drive the Saudi project market in the near and far future, Kamco Invest reported.

The Kingdom recently revealed designs for one of the main contracts for the NEOM project, which is a high-speed railway with a length of 170 km to connect parts of the line.

As for the energy sector in the Kingdom, the second largest value of awarded contracts, the total value of awarded projects in the sector witnessed a decrease of 24.5% on an annual basis to $1.1 billion during the third quarter 2022, down from $1.5 billion during the same period in 2021.

Energy contracts in the Kingdom included financing facilities worth $567.5 million from Saudi Electricity to finance a Saudi-Egyptian joint project; to connect the electricity networks in Egypt and Saudi Arabia for 14 years.

The Japanese company Hitachi, in cooperation with the Egyptian Orascom and the Saudi Services for Electromagnetic Works (SSEM), will build three transmission stations (HVDC); to transfer electricity between Egypt and the Kingdom.

The first substation with a capacity of 3000 MW is expected to be built in Badr, northeast of Cairo, while the second and third substations are expected to be built in Tabuk and Madinah, with capacities of 1500 MW and 3000 MW, respectively.

Kamco Invest said in its report that the UAE came at the top of the Gulf list with projects worth $3.7 billion, while Qatar ranked third with anchor contracts estimated at $3.4 billion, with Saudi, UAE and Qatar contracts making up about 96% of the total value of international contracts. The Gulf Cooperation Council in the third quarter of this year.