< Previous30 JULY 2024 | ANALYSIS | A POSITIVE MOVE FORWARD With 25 gigaprojects currently in various phases of construction around the kingdom, Saudi Arabia is advancing towards its 2030 deadline at a blistering speedJULY 2024 31 | ANALYSIS | Saudi Arabia is witnessing a boom in its construction sector. With output values soaring to an impressive $141.5 billion, residential, infrastructure, industrial, and commercial domains are seeing a 4.3% increase from the previous year, as revealed in Knight Frank’s Construction Landscape Review – H1 2024 report. This hefty investment in transforming the kingdom is at the heart of Vision 2030 and will also strengthen Saudi Arabia’s position as a global hub for tourism, commerce, and trade. According to Knight Frank, the total budgeted value of real estate and infrastructure projects has surpassed $1.25 trillion, since the launch of KSA’s National Transformation Plan in 2016. This transformation is evident across the entire urban landscape, driven by Vision 2030, which aims to deliver over 660,000 residential units, more than 320,000 hotel keys, over 5.3 million square metres of retail space, and more than 6.1 million square metres of new offi ce space by the end of the decade. Moreover, the residential sector primarily dominates Saudi Arabia’s construction output value, accounting for 31% ($43.5 billion) of the total output value in 2023 and is projected to reach $56.9 billion by 2028, according to Knight Frank’s analysis. The energy and utilities sector follows closely in second place, with a value of $35.1 billion, which is forecast to increase to $46.5 billion by 2028. By the end of 2028, the kingdom’s construction output value for all sectors is forecast to reach $181.5 billion, making Saudi Arabia the world’s largest construction market. By far the most visible impact of Vision 2030 has been the emergence of new super-cities, mainly gigaprojects around the kingdom, particularly in the Western part of the country. Amar Hussain, Associate Partner, Research, ME at Knight Frank commented, “With a value of over SAR1.25 trillion launched but not yet delivered, gigaprojects are undoubtedly transforming the kingdom’s urban landscape. Arguably one of, if not the most expansive, real estate development programs ever seen in the world is gathering pace in Saudi Arabia as the 2030 deadline nears to realise Vision 2030.” According to Knight Frank’s analysis, there are currently 25 gigaprojects that are at various phases of construction around the kingdom. Western Saudi Arabia remains a focus of development with plans valued at $692 billion and accounts for 55% of the total $1.25 trillion development plan. All in all, the region is expected to see extensive growth in luxury residential supply and hotel accommodation, as well as retail and offi ce space. | GIGAPROJECTS SPECIAL REPORT | 32 JULY 2024 In the heart of Saudi Arabia’s ambitious Vision 2030 lies a myriad of gigaprojects, each designed to catapult the kingdom into a new era of economic diversifi cation and sustainable development. Spearheading this transformation is BEC Arabia, a company that epitomises excellence, innovation, and strategic growth. Under the leadership of Bakhit Al Dosari, Vice Chairman and Managing Partner, BEC Arabia contributes to the kingdom’s monumental projects and sets new benchmarks in various sectors, including construction, landscaping, real estate, and hospitality. BEC Arabia’s operations in Saudi Arabia span a broad spectrum of services, from Tier- 1 contracting and real estate development to ready-mix concrete solutions, landscaping, and facility management. “Our core strength lies in our ability to consistently meet project deadlines while upholding the highest standards of quality,” says Al Dosari. This commitment is evident in their turnkey solutions across mixed-use developments, hospitality assets, and residential projects, all of which are critical to the kingdom’s urban growth and sustainability goals One of BEC Arabia’s standout initiatives is its sustainable landscaping eff orts. “Our landscaping subsidiary emphasises our commitment to sustainable green solutions,” Al Dosari highlights. Managing one of NEOM’s largest nurseries, BEC Arabia integrates eco-friendly practices into their construction projects, enhancing both aesthetic and ecological value. This focus on sustainability aligns perfectly with Vision 2030’s environmental objectives. Meanwhile, BEC Arabia’s advanced concrete solutions, supported by seven dedicated batching plants and a state-of-the- art precast factory, enable comprehensive and reliable infrastructure services. “Innovation and effi ciency are at the heart of our contracting solutions,” adds Al Dosari, highlighting their role in infrastructure developments. In addition, the company’s MEP subsidiary also collaborates with leading organisations to deliver top-tier projects. BEC Arabia’s foray into hospitality is equally impressive, with signifi cant contributions to the kingdom’s tourism infrastructure. “Our current projects include the development of luxury hotels on NEOM’s Sindalah Island,” Al Dosari notes. Furthering their impact, the company is co- investing in two Hilton hotels in NEOM, with the fi rst hospitality asset, Hampton by Hilton, already delivered. “Our real estate development arm holds a sizeable equity stake in these ventures,” says Al Dosari, highlighting their commitment to excellence and strategic investment in the burgeoning tourism sector. In addition to co-investing in Hilton hotels in NEOM, BEC Arabia is participating in an Investment Capital Fund for a high-end gated community in Riyadh and a hospitality asset in the Mecca Region. These strategic investments highlight their dedication to creating premium residential environments and supporting the kingdom’s growing tourism infrastructure. BEC Arabia’s strategic involvement in Public-Private Partnership (PPP) initiatives are also underscoring their pivotal role in KSA’s long-term vision. “By leveraging private sector expertise and investment, our collaborations aim to accelerate project completion and improve effi ciency,” explains Al Dosari. One of BEC Arabia’s notable partnerships is the TBC Schools program with the Ministry of Education, where they are involved in developing and enhancing educational infrastructure. Additionally, social infrastructure projects with the Ministry of Defense and the Ministry of Justice are underway, according to Al Dosari. Furthermore, BEC Arabia’s strategic real estate investments are signifi cantly impacting Saudi Arabia’s urban landscape. “Our collaboration with the National Housing Company for the Social Housing Program is delivering nearly 1,000 housing units,” Al Dosari reveals. This initiative caters to the diverse needs of the kingdom’s residents, from mid-range to high-end housing solutions. Lastly, the company’s extensive service off erings are enhanced by its collaborations with specialised contracting partners. “We hold a majority share in all diverse entities, ensuring seamless integration and consistent quality across our projects,” Al Dosari states. CRAFTING THE GIGA LANDSCAPE Bakhit Al Dosari, Vice Chairman and Managing Partner, BEC Arabia, on contributing to the kingdom’s monumental projects and setting new benchmarks in various sectors Bakhit Al Dosari, Vice Chairman and Managing Partner, BEC Arabia| GIGAPROJECTS SPECIAL REPORT | JULY 2024 33 Key partners include Pro Service for MEP and FM; Green Dimensions for landscaping; Externa for infrastructure; Eurolit for fl ooring solutions; and Il Salotto for offi ce furniture. “Through these specialised partnerships, we enhance our expertise and broaden our service off erings. This also allows us to collaborate with key clients such as SEVEN and MISK, among many others, to ensure the delivery of comprehensive, innovative, and high-quality solutions across all sectors of our operations,” he explains. GIGAPROJECT CONTRIBUTIONS BEC Arabia’s involvement with giga developers NEOM and Red Sea Global emphasises its alignment with the kingdom’s ambitious Vision 2030. As one of the main contractors for NEOM’s Sindalah Island project, BEC Arabia is responsible for delivering multiple assets. “Our comprehensive scope of work includes everything from inception to completion,” Al Dosari notes. He adds that the Sindalah Island project is a fast-track endeavour with a timeline of fewer than 24 months. Key assets being developed include the fi rst signed property under Marriott International’s Autograph Collection Hotels in Saudi Arabia; an upscale fi ve-star resort under Marriott’s Luxury Collection; a luxury beach club for MDL Beast; a world-class golf club tailored to IMG standards; retail and dining areas; entertainment zones; as well as a water sports zone and a diving centre. At Red Sea Global, BEC Arabia is developing the AMAALA Staff Village, which includes high- quality living accommodations distributed across several neighbourhoods with over 12,000 residential units, retail buildings to cater to these residents’ needs, and amenities and recreational facilities. Here, Al Dosari revealed that BEC Arabia is months ahead of schedule, with residents having already begun moving into the fi rst phase of the AMAALA Staff Village project as of June 2024. BEC Arabia is in active discussions with Qiddiya and New Murabba, two of Saudi Arabia’s most anticipated gigaprojects. “These projects will further demonstrate our capacity to manage and deliver large-scale, high-impact developments,” asserts Al Dosari. FUTURE STRATEGIC PLANS Sustainability is at the core of BEC Arabia’s operations. “Our commitment to sustainability is refl ected in our integration of innovative technologies and eco-friendly practices across all our projects,” Al Dosari explains. Key achievements include the use of locally sourced materials, recycled steel and aggregates, eff ective waste management strategies, and signifi cant reductions in water consumption. Looking ahead, BEC Arabia’s strategic plans are ambitious and multifaceted. “We aim to expand our portfolio of subject matter specialist subsidiaries, increase our workforce, and penetrate new sectors such as power and infrastructure,” Al Dosari outlines. This growth strategy is designed to enhance their project execution capabilities and contribute to job creation and skill development within the kingdom. Moreover, he notes that BEC Arabia will continue to forge strategic alliances and integrate sustainable practices and innovative technologies into their projects. “Our involvement in major gigaprojects like NEOM, Red Sea Global, Qiddiya, and New Murabba will expand, ensuring that we play a vital role in the kingdom’s journey towards economic diversifi cation and sustainable development,” Al Dosari concludes. | GIGAPROJECTS SPECIAL EDITION | 34 JULY 2024 MARCO, a leading turnkey contracting company in Saudi Arabia, was commissioned by the Ministry of Higher Education to undertake a large-scale construction project at Imam University. This involved constructing eight independent and linked rectangular buildings for the supporting academic area and car parking, as well as several other academic and administrative buildings. Notably, the project featured a unique pentagon-shaped student lobby in the male academic area. The SAAC package was composed of eight buildings, each with six fl oors above ground level and three underground levels, with a total built-up area of 321,889m2. The other packages comprised large auditoriums, classrooms, faculty offi ces, and other supporting facilities. The student lobby, a complex structure designed using a PTFE fabric tensioned membrane and a steel supporting frame, posed a signifi cant challenge to the client. THE CHALLENGE The client was concerned about the safety of completing a construction project within the university area, as well as the visual impact of having an active construction zone within academic areas. Moreover, due to the lack CONSTRUCTING LANDMARKS MARCO successfully delivered a complex project for Imam University, overcoming the signi cant challenges of completing construction within the university area| GIGAPROJECTS SPECIAL EDITION | JULY 2024 35 of local experience and resources, the client was uncertain that there was a contractor in the region with the ability to deliver a structure as complicated as the Student Lobby. IMPLEMENTATION MARCO’s 40-year record of successfully delivering complex projects, along with its fi nancial capabilities in funding megaprojects, were the key reasons that the client chose to work with the company. The client was impressed with MARCO’s commitment to success, loyalty, talented employees, and dedication to innovation and emerging technologies. Moreover, MARCO prioritised the project, adhered to the employer’s requirements, and ensured that the project could be delivered without signifi cant design changes. The company’s leadership worked closely with the project team to allocate the necessary resources from human power and equipment. DELIVERING RESULTS As a result of MARCO’s successful delivery of the turnkey construction project for Imam University, the company has established a reputation as one of the top turnkey contracting companies in Saudi Arabia, specialising in the construction of buildings, particularly educational, commercial, and residential. Today, the university hosts over 90,000 students who use the facilities delivered by MARCO, developing their careers in a highly appealing environment. MARCO’s success in completing the Imam University project is a testament to its commitment to excellence, innovation, and emerging technologies. The company’s clean record, fi nancial capabilities, and ability to prioritise the project and comply with the employer’s requirements played a vital role in securing the client’s trust. Consequently, MARCO has become the contractor to be invited for engagement for the client’s construction projects. MARCO ensured that the project was delivered without signi cant design changes “MARCO’s 40-year record of successfully delivering complex projects was one of the key reasons the client chose to work with the company” The SAAC package composed of eight buildings, each with six oors above ground level and three underground levels| INTERVIEW | 36 JULY 2024 Navigating the challenges of constructing infrastructure in remote terrains demands innovation, strategic planning, and a profound understanding of local dynamics. In this respect, Warrior Group, a leader in adventure and recreational projects, has eff ortlessly made strides in the Middle East, particularly Saudi Arabia. By blending adventure, culture, and sustainability, the company’s projects have not only solidifi ed its reputation for technical expertise but have also become landmarks in the region’s leisure and adventure landscape. Troy Gillham, CEO of Warrior Group, shares the group’s approach to building adventure projects and developing experiences that complement the kingdom’s tourism destinations while overcoming the challenges of building in remote terrains. “Setting up infrastructure in remote areas is challenging, but we have a strategic method to ensure success,” says Gillham, highlighting how they begin with a comprehensive feasibility study, meticulously assessing terrain, access, supply routes, and local resources. “We also evaluate environmental impacts and local regulations to develop a detailed plan for constructing access, supply lines, and temporary facilities,” he explains. He further points out that the company employs modular and prefabricated components to expedite the setup of facilities, while mobile units and temporary solutions for water, power, and sanitation ensure operational effi ciency. He continues, “We also ensure a steady supply of materials and equipment through advanced planning and diversifi ed sourcing.” This eliminates bottlenecks, while multiple suppliers reduce dependency on any single source, ensuring timely delivery. MASTERING REMOTE CONSTRUCTION Troy Gillham, CEO of Warrior Group, on excelling in remote construction methodologies to build adventure projects that enhance the kingdom’s tourism destinations Troy Gillham, CEO of Warrior Group| INTERVIEW | JULY 2024 37 In particularly challenging areas, Warrior Group stockpiles essential materials at key locations to create a safety net against disruptions, while engaging the local workforce and sourcing materials locally to streamline processes and enhance effi ciency. “Robust contingency plans and regular risk assessments prepare us for unforeseen obstacles, maintaining project momentum,” says Gillham. SUSTAINABILITY IN REMOTE CONSTRUCTION Environmental sensitivity and regulatory compliance are paramount in remote construction projects. Gillham emphasises the importance of balancing development with preservation through “environmental impact assessments, compliance with all environmental regulations, implementation of sustainable practices, community engagement, and eff orts to protect and preserve biodiversity.” Sustainable construction is also a growing focus, and Gillham asserts that Warrior Group is at the forefront of incorporating sustainable practices into projects, even in remote terrains. “Ensuring the long-term resilience of our projects involves designing structures capable of withstanding the unique environmental conditions of remote terrains,” he states. This begins with thorough environmental impact assessments to identify the specifi c challenges of each location, allowing the company to implement design features that enhance durability and adaptability. A key element of Warrior Group’s sustainability strategy is using locally sourced materials, signifi cantly reducing carbon footprint and supporting the local economy. Water conservation is prioritised through rainwater harvesting and greywater recycling systems. Waste management involves recycling, reusing materials, and environmentally friendly disposal methods. “By minimising waste, we reduce the environmental footprint of our projects and promote a culture of sustainability within our teams,” says Gillham. LEVERAGING ADVANCED TECHNOLOGIES Another aspect of overcoming the challenges of remote construction is advanced technologies such as drones, remote sensing, and BIM. For instance, Gillham states that drones with high-resolution cameras conduct aerial surveys of remote sites, providing accurate data on site conditions, topography, and progress. “With drones, we can monitor the construction process, identify potential issues, and make key decisions without the need for physical site visits.” Here, Gillham adds that by monitoring changes over time, Warrior Group ensures compliance with environmental regulations and minimises the project’s impact on the surrounding area. “Through BIM software, we create detailed 3D models of proposed structures, simulate various scenarios, and identify potential construction risks before they occur,” says Gillham. This virtual visualisation improves accuracy, reduces costly rework, and streamlines project management. WORKFORCE MANAGEMENT Recruiting, training, and retaining skilled labour in remote locations presents unique challenges. “We begin by implementing a targeted recruitment strategy, off ering competitive salaries, fostering a positive culture, providing robust training programmes, and off ering relocation assistance to attract top talent,” explains Gillham, asserting that collaborations with local educational institutions further strengthen this approach, cultivating a pipeline of skilled graduates ready to join the team. Continuing, he reveals that the onboarding process at Warrior Group is comprehensive, incorporating both remote and on-site modules to ensure thorough preparation for the workforce. “Continuous professional development and mentorship initiatives are central to our approach, ensuring our employees’ skills remain current and applicable,” he emphasises, further highlighting that the company’s retention is bolstered by competitive compensation and clear pathways for career advancement, among others. Another signifi cant concern, he adds, is safety, particularly in challenging environments. Warrior Group’s safety protocols include regular training, provision of necessary protective gear, and comprehensive on-site support facilities, as well as the integration of industry-leading technologies for safety management. “We prioritise maintaining high morale through generous leave policies, engaging social activities, and active employee involvement,” says Gillham. He also adds how the company’s regular feedback mechanisms and recognition programmes ensure that employees feel supported, valued, and committed to the company’s success. Warrior Group’s innovative approach to sustainability, integration of cutting-edge technologies, and eff ective workforce management highlights its dedication to excellence in remote construction projects. As Gillham aptly summarises, “By embracing advanced technologies, innovative strategies, and sustainable practices, we enhance the human touch in construction, optimising processes, and delivering projects that stand tall, both literally and fi guratively.” “Robust contingency plans and regular risk assessments prepare us for unforeseen obstacles, allowing us to maintain project momentum” Warrior Group supports its sustainability strategy by using locally sourced materials, signi cantly reducing carbon footprint and supporting the local economy38 JULY 2024 | GIGAPROJECTS SPECIAL REPORT | REPOSITIONING PROJECTS WITHIN PROGRAMMES OF LARGE COMPLEX PROJECTS Stephen Topp, Director (Middle East) and Country Manager for Saudi Arabia at TBH, highlights the benets of changing the direction of a project within a portfolio of projects to adapt to changing conditions and enhance project outcomes Gigaprojects, as they are commonly known, are typically large development programmes comprised of portfolios of projects. Whilst strategic reprioritisation or rephasing of these gigaprojects may be perceived as a deviation from the original plan, this practice allows organisations to adapt to changing conditions, optimise resource allocation, and enhance project outcomes. DRIVERS FOR RE-EVALUATION OF IMPLEMENTATION PLANS The predominant reason these projects require regular re-evaluation is the passage of time between initial implementation planning and actual project delivery. Large mixed-use developments in mature markets are often delivered in around three to fi ve years, and large infrastructure projects can take more than fi ve years to deliver; however, some of the incredible gigaprojects making headlines in Saudi have delivery horizons of 10-20+ years for full build-out. With these long periods from initial implementation planning to delivery of many of the built-form assets, there is naturally a much greater likelihood that conditions change between the inception of master planning to delivery of assets; therefore, continual re-evaluation is essential to a successful outcome.JULY 2024 39 | GIGAPROJECTS SPECIAL REPORT | This can be further complicated by a siloed approach to implementation planning, resulting in projects being planned individually rather than as a programme or portfolio. This can lead to misestimation of market capacity and market absorption through concurrency and can particularly be an issue in large organisations with complex stakeholder environments. An example could be two projects within a portfolio, based on market research, both delivering 500 luxury villas, unbeknownst to each other, targeting the same market segment. Market absorption is diffi cult to accurately predict in mature markets, even more so in rapidly evolving markets, particularly when introducing new product categories. Delivery pipelines of residential and hospitality products (hotels, serviced apartments, etc.), for example, should be reviewed at least annually, based on market response up to that point and any key market drivers on the horizon. Market capacity, though often discussed in hot markets, is often still an underestimated risk in delivering to an implementation plan. Evaluation of the capacity of market participants, including consultants, designers, contractors, and operators, if undertaken, is often done in a vacuum, underestimating existing commitments or competing projects’ requirements. BENEFITS TO REGULAR RE-EVALUATION OF IMPLEMENTATION PLANS Although messaging around resequencing or rephasing committed or publicised projects can be challenging, particularly if the corrective course of action is pushing a project further into the future, there can be very real benefi ts both in the short and long term. These benefi ts start with reducing the risk of redundancy of the delivered product. If the latest market research or consumer patterns suggest that the planned product typology is less desired by the market than an alternative, it makes sense to pivot to what the market demands. Examples of this include pivoting from a residential villa product to apartments or from commercial offi ce space to residential or retail. Additionally, greater value creation can be achieved by reconsidering the type of product to be delivered or the timing of delivery where it becomes apparent that other projects within the portfolio are scheduled to deliver competing products simultaneously, thus avoiding the potential cannibalisation of returns. Regarding market capacity-driven changes, these can reduce supply chain pressure benefi ting project quality, cost, and human capital. Quality generally suff ers when the supply chain is stressed in terms of materials (suppliers cutting corners to keep up with demand or projects having to select lower-specifi cation materials due to unavailability) or even labour (reduction in quality of available consultants, designers, and contractors). In parallel with quality challenges, the cost of delivering projects typically increases due to demand pressures when supply chains are overstretched. There is also a benefi t to human capital in terms of reducing stress and mental burnout, which has a fl ow-on eff ect for organisations, as the cost of staff turnover, recruitment, and retraining is well documented. This applies to all participant organisations, including client organisations, in terms of procurement, approvals, and management pressures. STRATEGIES TO MINIMISE RE-PLANNING Each situation is unique, and senior stakeholders will have diff ering expectations; however, there are a few strategies for implementation planning that can help to minimise the amount of repositioning required in the early stages of development: • Applying a rolling-wave philosophy to implementation planning, defi ning short-term delivery in greater detail and longer-term objectives at a high level, and progressively increasing the detail and specifi city of committed dates as unknowns are resolved. • Planning should start from a land development perspective, considering any constraints in enabling the land, such as subdivision and titling, regional utility and mobility infrastructure availability in terms of accessibility, and availability of demand quantum, etc., before establishing committed timelines for asset delivery. • Where possible, incorporate fl exibility into the implementation planning. For example, market research may indicate market absorption of 1,000 dwellings per year over the next 10 years for a particular location; however, the particular asset class most in demand today may not be the same for those assets delivered fi ve years into the future. Progressively defi ning projects in the implementation plan as they move closer to commencing their development lifecycle can reduce re-work due to such shifting demands. • Learn lessons from similar projects in comparable locations that are further advanced in the development pipeline. This is not to suggest that a slowdown of any or all projects is required, but rather that shifting priorities or delivery timelines in these large, very complex programmes shouldn’t necessarily be viewed as failures but are often necessary pivots to improve the overall outcome, which will have a legacy of decades. Stephen Topp, Director (Middle East) and Country Manager for Saudi Arabia, TBHNext >