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Riyadh powers on with projects
25 July 2013
Saudi Arabia is taking a multi-faceted approach to meet rising demand for electricity
As the GCC’s power sector moved from a slow second quarter into the traditional lull of Ramadan, those in Saudi Arabia remain optimistic as the kingdom pushes ahead with major generation schemes.
While Saudi Electricity Company’s (SEC’s) next independent power project (IPP) Rabigh 2 has been delayed, following the decision to change the configuration from oil-fired to gas, work is moving ahead on other schemes.
The state firm is evaluating proposals for the planned 2,600MW Shuqaiq plant with South Korea’s Hyundai Heavy Industries favourite to win after submitting the lowest price.
Despite its considerable size, the Shuqaiq project has been tendered as a standard engineering, procurement and construction (EPC) contract, which provides an example of the multi-faceted nature of Saudi Arabia’s power market. Demand for electricity is increasing from both domestic and industrial users, as the kingdom’s population and economy continue to grow at rapid pace.
SEC currently has 12 major power projects, with a combined total capacity of 30,000MW, at various stages of the planning and design stage, which are all scheduled to be commissioned by 2025. Three of these are currently planned as IPPs, with the rest scheduled to be tendered as EPC contracts.
As the kingdom pushes ahead with investment in generation, the number of transmission and distribution projects will be required to grow in line with the new capacity. With local and international firms looking for a pick-up in the regional power market in the second half of 2013, Saudi Arabia should not disappoint.
Projects market narrows on completions
18 July 2013
With project completions exceeding the value of contract awards a net loss has been recorded across the projects sector
The first half of this year was a period of recovery for the GCC’s projects market, as the region rebounded from a disappointing six months at the end of last year.
With $62bn of contract awards the market had a steady start to 2013, a figure that is broadly in line with most other six-month periods over the past five years.
While this may be a relief to many, there is still good reason for caution. While the value of awards has remained largely constant since 2008, the value of work that is being completed has not. It has risen from $15.9bn in 2008 to $61bn in 2013.
With just $49bn of awards signed in the second half of last year and $61bn of project completions the market registered a net loss for the first time.
The market would have seen a decline in growth again for the first half of this year if Qatar had not awarded $8bn of work on its Doha Metro scheme. Completions totalled $61bn, meaning that overall there was a net gain of $978m across the six GCC states.
The rise in completions creates a new paradigm for policymakers and the companies that supply goods and services to the projects sector.
Gone are the days when government officials and business leaders could expect double-digit growth every year. Instead, governments must now either invest themselves or secure private-sector backing for projects to maintain their economies not grow them. The supply chain, meanwhile, will have to compete aggressively to maintain the workload that it currently enjoys, instead of bidding for fresh revenue lines.
As growth becomes harder to achieve, efficiency will become increasingly important for both governments and individual businesses. Those that are able to maximise the potential of the work on offer will undoubtedly succeed, those that fail to operate efficiently will ultimately fail.
Rail projects to drive Top 100
11 July 2013
The value of transport schemes in the Top 100 projects in 2013 has risen 18.3 per cent to $51bn
The highlight of the projects market in 2013 has been the transport sector with the value of schemes in the Top 100 projects in construction rising 18.3 per cent, to $51.2bn.
The biggest transport project to join the Top 100 this year is the Doha metro scheme, as the Qatari capital and other cities across the region seek to emulate Dubai, Cairo and Tehran that already have operating metro systems.
In late May and early June, Qatar Railway Company (QRail) awarded $5.4bn of contracts for work on the underground sections of the Red and Green lines and the two major stations. These awards have offset what has otherwise been a disappointing 2013 for the projects market. The value of the Top 100 projects in construction stage in the Middle East has fallen for the second quarter in a row, down from $272.7bn in the first quarter to $263.7bn in the second, a drop of 3.3 per cent. This is despite almost $36bn-worth of projects entering the list in the past three months.
Looking forward to the rest of this year, work on regional metro projects should boost the projects market as construction companies await the award of several major contracts.
By the end of this year, Saudi Arabia should also have awarded the contracts for the construction of six lines on the Riyadh metro, and QRail should have awarded the main contract for tunnelling works on the Gold line and other elevated sections packages.
Looking further forward, metro projects will continue to be a key part of the Top 100. In Saudi Arabia, Mecca, Medina and Jeddah are all appointing consultants for their proposed metro networks.
In Abu Dhabi, contractors have attended an industry briefing and have begun to form consortiums to tender for work on both metro and light rail networks that are planned for the UAE capital.
Mass Global plans new Iraq power projects
15 July 2013, 12:21 GMT | By Adal Mirza
Sulaimaniyah power plant conversion contracts to be awarded by year end
Jordan’s Mass Global Holding expects to award a contract by the end of the year to increase the capacity at its Sulaimaniyah power plant in the Kurdistan region of northern Iraq.
Mass Global plans to convert the 1,000MW Sulaimaniyah power plant from simple-cycle to combined-cycle production, increasing capacity to 1,500MW.
According to sources close to the projects, Mass Global is also planning to add another 250MW to 500MW of simple-cycle capacity at one of the company’s two other plants at Erbil and Dohuk. No decision has yet been taken, however.
Mass Global currently has three power plants in the Kurdistan region, producing 2,875MW, from simple-cycle production. The Erbil power plant is currently under conversion by Turkey’s Enka and commercial production at 1,500MW is expected in August 2014. The Dohuk plant currently produces 875MW.
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