The value of awarded construction contracts in Saudi Arabia is forecast to remain robust in the fourth quarter of this year, with the power sector expected to continue its significant participation in the construction sector, the National Commercial Bank said Wednesday in its Quarterly Review of Contract Awards in the Construction Sector. The value of awarded contracts jumped to SR95.1 billion in the third quarter, sustaining growth from the first two quarters. The value of awarded contracts is showing no signs of slowing down as mega-projects continue to be awarded in record numbers, the report said, noting that the value of awarded contracts willl “continue its strong push into Q4'11.” Several contracts are anticipated to be awarded during Q4'11 by SEC in excess of SR10 billion. Additionally, the recent approval by the Council of Ministers to build a land-bridge to connect Jeddah Islamic Port to Dammam and Jubail seaports though the existing railway network between Riyadh and Dammam, will allow for numerous contract awards beyond 2011 and into 2012, NCB said in the report. “The SR95.1 billion in awarded contracts during Q3'11 outpaced the value of contracts during the first two quarters combined, which were valued at SR84.2 billion. Q3'11's value of awarded contracts represents a 104 percent increase over Q3'10, while the SR179.5 billion through the first three quarters of 2011 represents a 125 percent increase over the same period last year. The pace at which the value of contracts have been awarded in 2011 strongly resembles the performance of 2009. Compared to the first three quarters of 2009, the value of awarded contracts in 2011 is behind by 2 percent only. However, the value of awarded contracts during Q3'11 alone represents a 15 percent increase over Q3'09.” The Construction Contract Index (CCI) peaked at 358.6 points in July after approximately SR69.8 billion in contracts were awarded but eased to end the quarter at 316.4 points. The CCI in Q3'11 grew by 83 percent compared to Q3'10's CCI of 172.8 points. The CCI's 358.6 points is the highest level reached since the index was established, surpassing the previous mark of 307.9 points that was set in July 2009. The distribution of awarded contracts by region confirms that the Eastern Province continues to receive the largest share of mega-projects. Approximately 44 percent of the value of awarded contracts was in the Eastern Province due to heavy investment in the petrochemical, industrial and power sectors. The Makkah region followed with 20 percent share of awarded contracts largely due to the Haramain High-speed Railway Network's phase two package. The Riyadh region contributed 12 percent to the overall value of contract awards after the majority of a mixed-use real estate contract that was awarded by the Ministry of Interior is set to take place, The value of awarded contracts jumped to SR15 billion in September, led by the power and commercial real estate sectors. Hajr For Electricity Production Company, a company with SEC as a majority owner and ACWA Power, Samsung Construction & Trading and MENA Infrastructure Fund (GP) Limited as minority owners, awarded two contracts to Samsung Construction & Trading for SR5.3 billion each. The plan calls for the construction of two gas-fired IPP power plants at Qurayyah. Both power plants will have gas and steam turbines, substations and other related facilities.Hajr For Electricity Production Company will award one more contract for this project. As part of the IPP program, SEC plans for a total capital investment near SR21 billion aimed at adding 5,200 megawatts to the domestic grid by 2015. In the commercial real estate sector, Saudi Aramco awarded a SR2 billion contract to a consortium consisting of Al Muhaidib Contracting Company and the Belgian's Six Construct Limited to build a 60,000 seat football stadium in King Abdullah Sports City in Jeddah. The plan for the King Abdullah Sports City project calls for approximately five other sporting arenas to be constructed and a specialist hospital to treat athletes. Additional facilities will include indoor stadiums and youth hostels. Construction is expected to be completed by the second quarter of 2014. A sizeable contract in the education sector was awarded by the Ministry of Higher Education to Rakan Trading & Contracting Company in the amount of SR525 million. The contractor will construct a dentistry college, applied medical science college, pharmacy college and a nursing college for male students at Qassim University. Construction is expected to be completed by the third quarter of 2014.
