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Saudi Arabia’s gigaprojects are a marathon not a sprint, says GlobalData’s MEED

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Following the news that Saudi Arabia’s Red Sea Development Company (TRSDC) is preparing to award a further SR3.5 billion (US$933 million) of contracts by the end of the year on its Red Sea Tourism Project, Colin Foreman, Deputy Editor at GlobalData’s MEED, offers his view:

“Construction companies in the Gulf have been eagerly waiting for the next generation of Saudi projects to move into the construction phase since they were launched in 2017. In the years that followed, as those project delivery teams prepared masterplans and designs and appointed consultants, contractors that were desperate for new work felt frustrated by the lack of progress on site. In 2020, the lesson to learn is that developing large master-planned projects is a marathon not a sprint.”

“With its project on the west coast, The Red Sea Development Company (TRSDC) is now showing that time spent planning is seldom wasted. It has already awarded about US$1.25 billion-worth of work on its project so far, and by the end of this year, it intends to award another US$1 billion-worth of contracts.”

“The upcoming work includes the construction of the development’s hotels, and the first packages out to tender are for the offsite manufacture of pods that will make up the bulk of the structures. This is an exciting proposition, because once contracts are awarded and the pods are delivered to the site, the hotels will be completed more quickly than if they were built using traditional construction methods.”

“For this approach to work, the hotels need a high degree of design certainty relatively early on in the construction process. While contractors may have been frustrated by the apparent lack of progress on projects in the kingdom, design changes during construction will be minimised thanks to time spent in design”.

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