< Previous20 | COMMENT | 2021 BUILDING BLOCKS Construction Week Saudi analyses the kingdom’s healthy pipeline of healthcare projects and how innovative technologies such as modular construction could play a vital role in advancing the sector By Angitha Pradeep | Images: Supplied & Shutterstock22 Globally, medical buildings and healthcare facilities are getting more complex, with construction industry stakeholders utilising greater commitment to collaboration and teamwork in healthcare construction projects. But what is healthcare construction, and how does it differ from typical projects? As healthcare is a technology- driven industry, experts point out that healthcare construction is a specialised niche that requires constant upgrades based on new technologies that not only meet today’s needs but are optimised to grow with the industry. The most crucial element of a healthcare construction project – be it a hospital or a clinic – is to work with partners that understand the nuances of healthcare construction, which focuses on services that take into consideration the well-being of patients versus optimising the number of beds that can be incorporated in the building. Industry stakeholders must also have an understanding of medical technologies as well as the usage of laboratories and processing equipment to optimise operational costs and the flow of people and space, and implement efficient solutions that understand the dynamics between both. For instance, Saudi Arabia’s Vision 2030 prioritises access to quality healthcare and building world-class infrastructure that can support a sustainable and competitive healthcare environment. As part of Vision 2030, the Health Sector Transformation Programme will work on harmonising and coordinating between all health sector entities, Vision Realisation Programmes, and relevant government entities, while aligning and linking with strategic national goals during the transformation journey. In addition, the Health Sector Transformation Programme, launched in 2021, will ensure the continued development of healthcare services in the kingdom and focus efforts on this vital sector. According to Knight Frank’s report titled Healthcare in Saudi Arabia, the sector retained its position as the third largest area of spending in the 2019 fiscal budget and saw its share of total budget spending trending higher over the past few years. In 2022, the kingdom is projected to spend $36.8bn on healthcare and social development – 14.4% of its 2022 budget and the third largest line item after education and military. The Saudi Arabian government is targeting the healthcare sector for privatisation, with these initiatives beginning with the commencement of the first public private partnership (PPP) project by the Ministry of Health, which targeted radiology and medical imaging services in the Riyadh region, in 2019. The report pointed out that overall, the kingdom is in favour of continuous efforts and further initiatives in increased private sector involvement and investments in the healthcare space. What are the opportunities? Under Vision 2030, the Saudi Arabian Government plans to invest over $65bn to develop the country’s healthcare infrastructure. In addition, it aims to increase private sector contribution from 40% to 65% by 2030, targeting the privatisation of 290 hospitals and 2,300 primary health centres. The report further stated that the number of hospitals expected to be delivered in Saudi Arabia from 2016 to 2020 stood at 30, which equates to 70% of the total number planned for the next five years. When complete, these hospitals would have a collective capacity of 6,950 beds. Moreover, another report published by Knight Frank earlier this year noted that | HEALTHCARE | 22hospital beds are expected to increase to more than 19,000 by 2030. Meanwhile, the report also stated the number of beds anticipated: 6,565 beds in Riyadh, 5,146 beds in Makkah Province, 1,080 beds in Al-Madinah, 2,074 beds in Asif Province, 720 beds in the Eastern Province, and other provinces will have a combined 3,242 beds. Not just in Saudi Arabia, but across the MENA region, the healthcare market is projected to grow at a CAGR of 11.7%, from $185.5bn in 2019 to $243.6bn by 2023, according to Fitch Solutions. In addition, the MENA region’s healthcare sector is witnessing a significant growth phase due to increased demand for healthcare services. Furthermore, industry experts at the MENA Hospital Projects Forum 2022, held earlier this year, noted that healthcare projects under execution in the MEA region are valued at $45bn, followed by pre-planning and planning schemes worth $23.8bn. With a rapidly growing young and vibrant population, the MENA region will need a large number of hospital beds, clinics, pharmacies, operating theatres, medical laboratories, physiotherapy centres, and associated facilities in the coming decades. Current healthcare expenditure in the GCC is projected to reach $104.6bn in 2022. Furthermore, government spending on healthcare in the GCC is estimated at $30.5bn in 2021, up from just $2.4bn in 2016, growing at a 6% CAGR. Elaborating on this, Leila Masinaei, managing partner, Great Minds Event Management – organiser of the MENA Hospital Project Forum, noted: “With mandatory healthcare coverage and health insurance scheme, all the countries of the MENA region will have to build more hospitals and clinics, resulting in an increase in hospital projects in the region. “So, opportunities are abundant for architectural consulting firms and 23 Saudi Arabia’s Vision 2030 prioritises access to quality healthcare and building world-class infrastructure. CREDIT: KNIGHT FRANK24 suppliers who specialise in healthcare projects, especially hospitals and clinics. The good thing is that the opportunities are growing at a faster pace than other economic sectors.” In line with Masinaei’s statement, upcoming notable hospital projects in Saudi Arabia include King Khalid Medical City, which will have a capacity of 1,500 beds, King Faisal Medical City (KFMC), with a capacity of 1,024 beds, King Fahad Medical City, which will have a capacity of 1,024 beds, and Prince Mohammad bin Abdul Aziz Medical City, with a capacity of 789 beds. In January 2022, Saudi Arabia’s Ministry of Health, in cooperation with the National Centre for Privatisation and PPP, sought expressions of interest for the development of King Faisal Medical City (serving the southern regions) and Prince Mohammad bin Abdul Aziz Medical City (serving the northern areas). The ministry added that the projects are being tendered as a PPP under a model of design, build, finance, and operate (with no clinical operations), maintenance, and transfer. Digitisation in the healthcare market According to a report by McKinsey & Company, Saudi Arabia has already taken steps to digitise its healthcare system and fast-track improvements in patient experience, quality of care, and efficiency. Another area gaining traction is modular construction. For example, The Red Sea Development Company (TRSDC’s) ongoing project, The Red Sea Project, is implementing modular construction for its residential projects. Pointing out the benefits, TRSDC’s project delivery executive Faisal Butt noted to Construction Week Saudi’s sister title Construction Week Middle East that the company was able to fast- track projects by implementing modular construction and reduced construction waste by 30-40%. Furthermore, the reason driving modular construction in Saudi Arabia is the developers’ need for buildings and infrastructure to be built and | HEALTHCARE | Saudi Arabia has already taken steps to digitise its healthcare system. King Khalid Medical City will have a capacity of 1,500 beds.operated at a far greater pace, according to Waleed Khaled, the sales director at Losberger De Boer. In line with this, Modular Building Institute, an international trade association, stated that modular construction, seldom used in healthcare a decade ago, is now utilised by the sector 49% of the time, according to recent industry statistics. Another significant benefit of modular construction is the added advantage of including innovative technologies in healthcare construction. As stated by Khaled, it is not just speed and quality that have increased the attractiveness of modular construction in Saudi Arabia. He notes that the very nature of this build method makes it a perfect fit for the kingdom’s mega and gigaprojects. “What has previously been identified as a weakness – design certainty – is, in fact, a strength in the context of many projects in KSA,” he adds. Moreover, Losberger De Boer estimates that 30% of the kingdom’s construction is modular; however, it foresees a domino effect coming into play. Khaled points out that as more benefits are being proven, the question will no longer be: Can we utilise modular construction? Instead, it will become: Can we keep up if we don’t use modular construction? The healthcare sector is witnessing massive growth globally and in the MENA region due to the impact of the pandemic, governments’ expansive visions, and other factors, which powers advancements in healthcare construction as well as the latest innovations in hospital building, and the integration of digitisation in healthcare construction remains to be seen. “UNDER VISION 2030, THE SAUDI ARABIAN GOVERNMENT PLANS TO INVEST OVER $65BN TO DEVELOP THE COUNTRY’S HEALTHCARE INFRASTRUCTURE.” | HEALTHCARE | 25has put down $750mn for the development of the kingdom’s first-ever water theme park destination. It anticipates completing the first phase of Qiddiya’s entertainment city in 2022, while also working into Vision 2030 to drive development in the entertainment and hospitality sector. The project will see the development of the Six Flags theme park which is scheduled to open in early 2023, featuring the world’s fastest rollercoaster. In essence, this special report will highlight the biggest leisure and entertainment projects in the kingdom, with the main focus on how the sector will support the economic transformation of Saudi Arabia as part of its wider Vision 2030 goals. Several years ago, travel, leisure, and entertainment were not necessarily synonymous with the Kingdom of Saudi Arabia. However, since the launch of Vision 2030, more and more restrictions are being relaxed as part of the kingdom’s transformation. After the kingdom lifted its 35-year ban on movie screenings 6 years ago, more than 50 theatres operating approximately 430 screens have been established across the country, indicating high hopes and strong potential for the recently re-introduced sector. Vision 2030 has been paving the way for Saudi Arabia’s leisure and entertainment industry, with plans underway to open its first water theme park in Qiddiya, in addition to developing more cinema complexes and leisure facilities. It is no secret that Saudi Arabia is actively investing its time and money to transform the kingdom into a leisure and tourism hotspot. As of Q2 2022, 21 new investment licenses were issued by the art, entertainment, and recreation sector, proving the industry more than capable of expanding gradually in the near future. As the impact of the pandemic continues to diminish, Saudi Arabia’s tourism sector is expected to make a recovery as the kingdom continues to host entertainment seasons and festivals, opening its attractions to global visitors and easing travel requirements. The thriving leisure and entertainment sector is easily visible through a simple snapshot of Saudi Arabia’s gigaprojects – in particular, the projects that pay special attention to attracting global tourists and visitors. Luxury mountain destination Soudah Development will house 30 commercial and entertainment attractions itself, while Qiddiya Investment Company Now, post-hiatus, the kingdom’s leisure and entertainment industry is seeing exponential growth, with the priority to reach Saudi Arabia’s Vision 2030 goals for economic diversification. In fact, the entertainment sector, more than any other, reflects the remarkable transformation of the country during the past seven years, helping to push gigaprojects such as Qiddiya, AlUla, and The Red Sea Project into the spotlight. On the back of such developments, the progressive opening of the kingdom’s entertainment sector has spurred an ambitious construction pipeline of movie theatres, theme parks, live mega- events, and sports-related infrastructure, propelling the construction industry to start working in full speed. Driven by the desire for economic diversification as well as a gradual but detectable loosening of strict conservative rules, the region is pumping vast resources into more than 2,000 hospitality and leisure projects, carrying an estimated combined value of over $200bn. A recent report by Research and Markets found that the Kingdom of Saudi Arabia’s entertainment and amusement market is forecasted to grow to $1.17bn by the end of 2030. This represents an annual Since Saudi Arabia lifted its cinema ban in 2016, the kingdom has experienced an in ux of leisure and entertainment projects. Experts highlight how such projects support the economic transformation of the kingdom as part of Vision 2030 e Saudi Arabia lifted its cinema ban in 2016, the kingdom has experienced an i sure and entertainment projects. Experts highlight how such projects suppor economic transformation of the kingdom as part of Vision 2030 Words by: Julianne Tolentino | LEISURE & ENTERTAINMENT | 27growth rate of 47.65% for entertainment in the country, positively reflecting its efforts to “build a unique and world- class entertainment hub”. Furthermore, the report states that the boost for entertainment is also expected to benefit the kingdom’s real estate sector, leading the country closer to its overall goal. In this special feature, Construction Week Saudi speaks to consultants, contractors, and architects in the kingdom, those who are actively involved in the construction of these leisure and entertainment projects, uncovering each company’s thought process in contributing to Saudi Arabia’s Vision 2030. A “big appetite” for fun Entertainment projects, as we define them today, were only introduced to the market four years ago. Back in the year 2016, the Saudi government announced its Vision 2030, outlining investments that reached up to $17.4bn in the leisure and entertainment sector over the next 10 years. Fittingly, a year later, the ban on cinemas was lifted, proving a newfound appetite for the construction industry to become involved in these projects. According to Mohammed Salameh, associate director at Compass Project Consulting, the construction sector has begun to adapt to a suite of new requirements, once again showcasing the country’s “big appetite to have a share of the market”. He says: “Following the shift in the country’s rules, we now see contractors who are fully involved and focused on the entertainment sector, as well as developers who have started for the purpose of executing entertainment projects. These changes, in turn, have attracted more operators, international designers, and consultants who are specialised to be a prominent part of the successful delivery.” The government has actively invested in mega and giga initiatives to demonstrate the sector’s need, or rather, to support leisure and entertainment projects in KSA. For instance, one project that exemplifies this is the highly-acclaimed The Red Sea Project. Seen as nothing less than the launching of the region’s Red Sea coastline as a global tourism destination, the project will deliver world-class resorts covering up to 50 islands and 200km of coastline. “BY OPENING THE KINGDOM TO GLOBAL BUSINESS AND TOURISM OPPORTUNITIES, KSA WILL BECOME HOME TO SOME OF THE MOST FORWARD-THINKING AND VISIONARY COMPANIES IN THE REGION.” Martin Boson, general manager at Parsons The Six Flags Qiddiya themepark. [Image: Qiddiya] | LEISURE & ENTERTAINMENT | 28 Moreover, according to Rick Hopper, vice president and head of buildings and places at AECOM Arabia, the increasing demand to build leisure and entertainment projects in the construction sector can also be observed through SEVEN and Qiddiya. He says: “The construction sector is keen to get involved, but more importantly, the specialist infrastructure related to these types of projects is attracting international contractors to enter the market much more so than any other project type. In other words, the entire construction sector will benefit from this influx of expertise.” The development of cultural and historical attractions, mega sporting events, and leisure projects is also enhancing KSA’s culture and character as part of Vision 2030. Many contractors are increasingly showing their keenness to participate in transforming the kingdom into an investment powerhouse and Parsons, a leading consultant in the industry, exemplifies this trend. Martin Boson, general manager at Parsons, Saudi Arabia, says: “These projects will address the significant growing demand for leisure and entertainment while driving the region’s economic diversification and social growth. By opening the kingdom to global business and tourism opportunities, KSA will become home to some of the most forward-thinking and visionary companies in the region.” A conventional strategy In the past, Saudi Arabia’s greatest source of tourism experience has arguably been religious tourism. Each year, the country welcomes millions of devotees for the annual pilgrimage or ‘Hajj’ to The Holy city of Makkah. While this is incredibly significant to the kingdom in religious, cultural, and economic terms, the government also aims to expand other forms of domestic and international tourism by offering greater access to new opportunities. In addition to this, Saudi Arabia’s location, weather, and demographics also play a part in influencing how these leisure and entertainment projects are approached. Edward McIntosh, the regional design director at Atkins, a member of the SNC- Lavalin Group, emphasises how some of the country’s factors are better served by a tailored approach. He says: “There is a huge desire to improve people’s lives with entertainment and leisure projects that focus on sports, wellbeing, and cultural and intellectual enrichment. We believe this is a great initiative by the kingdom’s leadership and an incredible tool to contribute to the development of the nation. Because Saudi Arabia is a large country with many diverse regions and climates, specific sites are serviced by specific project visions.” On the other hand, the ambiguity of entertainment also plays a role in determining projects within the country. Technically, leisure and entertainment is not a new concept in Saudi Arabia considering the kingdom had hospitality projects prior to the launch of Vision 2030. However, its definition of acceptable entertainment and its approach to the segment have shifted. Lee French, partner and operations director at Cundall MENA, an engineering consultancy firm that has won contracts at The Red Sea Project, comments on the Xxxx xxxxx | LEISURE & ENTERTAINMENT | 29 Rick Hopper, VP & head of buildings and places, AECOM Arabia. Concert hall deisgn concept using AI tools. [Image: Atkins, a member of SNC-Lavalin Group]Next >