NEOM project has been fast tracked to meet deadline, says top executive

Work has also commenced on The Line, a series of communities built along a 170-km strip of land from the Red Sea deep into the interior of Saudi Arabia, integrated with The Spine, the transport and logistics backbone that will service The Line.
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Updated 20 February 2022
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NEOM project has been fast tracked to meet deadline, says top executive

  • Smythe says 2023 will see a speed up of large-scale permanent construction in all areas

RIYADH: Brett Smythe has a big and challenging task ahead of him. Smythe, who is the chief projects officer of NEOM, has been commissioned along with his team to turn the ambitious dream of Saudi Crown Prince Mohammed bin Salman of a $500 billion futuristic megacity into a reality.

And he is exactly doing that.

“When Saudi Arabia’s visionary NEOM project was announced by Crown Prince Mohammed bin Salman in 2017, it caught the attention of the world with its ambition and scale — an attempt to achieve something that has never been achieved before, redefining livability, business and conservation. A cornerstone of Vision 2030 that is driving economic diversification in the Kingdom,” Smythe told Arab News in an exclusive interview.

Since then, NEOM’s strategy has grown up, with significant developments underway.




Brett Smythe, NEOM chief projects officer. (Supplied)

All regions of NEOM will be built simultaneously, in keeping with the project’s mission to accelerate and deliver progress, according to him.

Smythe gave thorough explanations on the progress of the project.

“Work has also commenced on The Line, a series of communities built along a 170-km strip of land from the Red Sea deep into the interior of Saudi Arabia, integrated with The Spine, the transport and logistics backbone that will service The Line. Early grading work has already commenced, and major contracts are progressing for The Spine infrastructure to Bechtel (executive project manager), AECOM (lead designer) and China Railway Construction Corp. (adits and portals),” Smythe noted.

Work has started on OXAGON, a radical new model for future manufacturing centers, as well as the civil engineering and infrastructure for its water innovation hub.

“Construction has made important headway on NEOM’s road and utility backbone, its first permanent villages, marine works and social infrastructure,” Smythe said.

He also pointed to the world’s largest volumetric mass modular manufacturing facility in NEOM is also being established, and additional work is commencing on major energy, water and transport assets, hospitality venues, airport upgrades, island tourism destinations and a marina.

Smythe promised that 2023 will see a speed up of large-scale permanent construction in all areas. Across its 26,500 square kilometers, covering both land and maritime regions, the above scale of development still only accounts for 5 percent of NEOM in total — maintaining the project’s conservation goals and promise to shape a future in harmony with nature.

He proudly indicated that the scale of the work on this project has never been witnessed before.

“We’re building something on a scale never seen before, using new technologies to bring to life one of the world’s most exciting and disruptive projects. As NEOM progresses through the construction of the project, it will create the most advanced economic construction ecosystem in the world, which will go on to contribute to the long-term gross domestic product of NEOM, Saudi Arabia and beyond,” Smythe said.

HIGHLIGHTS

All regions of NEOM will be built simultaneously, in keeping with the project’s mission to accelerate and deliver progress.

Construction has made important headway on NEOM’s road and utility backbone, its first permanent villages, marine works and social infrastructure.

There are currently over 11,000 workers from 44 contractors on site.

 

New perspective

Smythe and his team are putting the final touches on the construction of essential support infrastructure.

“We are finalizing the construction of the essential support infrastructure including logistics parks, roads and utilities. Massive scale permanent work is ramping up, and it will go on for the rest of this decade,” he said.

The teams had a robust pipeline of work and schedules set for the next 18 months.

“Our master plans have developed considerably, so much so that we are significantly opening up our permanent works. We are open for business, and hosted 300 design and construction leaders in NEOM who were given a detailed overview of how the project’s vision is coming to life.”

There are currently over 11,000 workers from 44 contractors on site; over 8,000 pieces of plant and heavy equipment and over 34 million job hours completed to date.

Permanent facility works have already commenced in OXAGON, as well as the NEOM Logistics Park. The 12-square-km park includes new construction villages that will support the initial communities of 30,000, expanding to well over 150,000 within the next two years, and will specifically cater to construction requirements.

Additionally, the logistics park will include manufacturing and distribution hubs servicing long-term construction, along with 30 initial concrete and asphalt batching plants, and waste segregation and recycling areas. This infrastructure will complement and enable the latest in offsite manufacturing, design and construction automation.

Smythe stressed that Saudi Arabia is on the verge of the biggest construction boom in the world.

“It is essential to take advantage of this development to benefit NEOM and the whole Kingdom. We will work with our partners to create a design and construction economy, including the full value chain to act as a construction hub for companies in NEOM and Saudi Arabia,” he added.

Smythe said the construction ecosystem of NEOM is being pioneered to meet the challenges of the project’s scale and pace.

“We are committed to positively disrupting the way projects are conceived, planned and delivered. NEOM will serve as a living laboratory for research and development into design and construction processes and materials. In fact, the full development process, from planning, to design, construction and operations, will be enabled by advanced technologies designed to increase efficiency and sustainability, creating the largest modern methods of construction (MMC) ecosystem in the world and leveraging best practice with worker welfare.”

 

Pillars of the project

To build at the required pace, a significant proportion of the work will be moved offsite to be prefabricated in factories. The application of MMC for both infrastructure and buildings, integrated with innovations including 3D printing, autonomous vehicles, new materials and structural forms, will drive benefits in speed, cost, quality, health and safety, and sustainability. Additionally, the development of these capabilities will establish NEOM as a global center of best practice for construction innovation, creating new businesses and skilled jobs.

In his view, better planning, design and execution, using MMC and supported by a variety of digital tools together with recycling, will allow NEOM to send zero construction waste to landfill, use fewer natural resources and reduce emissions from both construction and operations when compared to traditional buildings and infrastructure. This has significant sustainability benefits.

Circular economy techniques will also be enormously important for NEOM.

“Our focus within our master planning process is the designing of buildings and communities for both their intended use, and for their next life; details of the materials used will be recorded so we can plan for their next life.”

Smythe’s team is committed to significantly reducing embodied carbon, and using sheer scale, and to work with industry to reduce emissions from concrete, one of the largest sources of CO2 in construction.




Work has started on OXAGON, a radical new model for future manufacturing centers. (Photo courtesy of NEOM website)

Sustainability

NEOM’s long-term ambition is to be able to deliver net-carbon-zero communities in the future, and the starting point is how we build.

“To achieve this, we are exploring alternative structural forms and building materials, and collaborating with the entire supply chain, including the cement manufacturers and vehicle suppliers, to minimize the carbon footprint of our construction activities,” Smythe said.

NEOM is looking at significant pilot projects that adopt the use of materials and structures that will reduce concrete demand by over 30 percent and will phase in tools, techniques and powertrain shifts over time to develop viable large-scale zero-emission construction equipment and vehicles to reduce emissions even further. Longer term, NEOM will be installing renewable energy grid across NEOM’s construction sites.

According to the CFO, Digital technologies will play a fundamental leading role during NEOM’s planning, design and procurement processes, through construction, and critically, over the lifetime of operations and management.

NEOM will tap into its core digital backbone right from the start of the design phase and into construction; Singapore is the only place in the world that has anything comparable, and it was initiated recently and retroactively.

By digitalizing all its systems from the start of development, NEOM will be able to optimize all of its processes within the life cycle of design and construction.  

 

AI, machine learning

The development team is exploring the integration of virtual supply chain platforms, the future of procurement and dealing with suppliers linked to the digital backbone.

“This will be further enhanced through the use of AI and machine learning to constantly improve efficiencies, reduce work hours and enable construction at speed while driving improvements in both quality and sustainability. In short, we will be deploying advanced MMC using sustainable and digital technologies and through this, we will be supporting both the Kingdom’s and the global construction industry’s journey to a new paradigm,” Smythe said.

 

Investing in humanity

The team is building a new region and with it comes obligations to change the role of workers in construction.

The purpose is to create an industry defined by high skills, automation, factory working and one where the traditional risks are no longer tolerated.

This will be a significant change program, and it is one that underpins NEOM’s overarching approach to health and welfare, to training and to engagement, according to Smythe.

“Technology is a key enabler, but much more than that, we seek to significantly increase the value of a person-hour in our industry. We are taking a different approach to how we design our accommodation, to training, to the working environment and ultimately to integration in society. This will continue to underpin every decision that we make,” he concluded.


Saudi Arabia’s JEDCO, Tarshid partner to boost energy efficiency at King Abdulaziz Int’l Airport

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Saudi Arabia’s JEDCO, Tarshid partner to boost energy efficiency at King Abdulaziz Int’l Airport

  • Tarshid will conduct on-site surveys and technical studies of KAIA’s targeted buildings and facilities

JEDDAH: Saudi Arabia’s King Abdulaziz International Airport is set to enhance energy efficiency and reduce emissions through a strategic partnership with the country’s National Energy Services Co., or Tarshid.

The pact between Jeddah Airports Co., or JEDCO, the airport’s operating company, and Tarshid, a Public Investment Fund company, aims to deliver sustainable energy efficiency solutions for the airport’s facilities. The partnership is facilitated through a Tarshid subsidiary and aligns with the Kingdom’s Vision 2030 and the Saudi Green Initiative.

The agreement was signed in the presence of Prince Abdulaziz bin Salman, minister of energy and chairman of Tarshid’s board of directors, according to the Saudi Press Agency.

The deal, which aims to launch innovative energy-saving initiatives and promote environmental responsibility, supports Saudi Arabia’s Civil Aviation Environmental Sustainability Program and contributes to achieving the goals of the Saudi Green Initiative and Vision 2030, which seek to improve energy efficiency and implement sustainable solutions across public and private sector facilities in the Kingdom.

The Kingdom has been developing the Civil Aviation Environmental Sustainability Plan, which seeks to mitigate the environmental impact associated with the expected growth of the country’s civil aviation sector.

The plan is crafted to align with global commitments outlined in the Paris Climate Agreement and the emission reduction targets set by the International Civil Aviation Organization.

The country has made several national-level achievements over the past years in the pursuit of it net-zero emissions goal, set for 2060. It is also pursuing new technologies to improve fuel efficiency and decarbonize the aviation sector.

Ranked among the top 100 airports globally, KAIA holds the distinction of being the third-best airport in the Middle East, according to Skytrax rankings.

Under the agreement, Tarshid will conduct on-site surveys and technical studies of KAIA’s targeted buildings and facilities, recommending optimal solutions to enhance energy efficiency and reduce consumption within the project’s scope.

Waled Abdullah Al-Ghreri, CEO of Tarshid and board member said that they are dedicated to realizing Vision 2030’s objectives of enhancing energy efficiency and sustainability in Saudi Arabia.

“Tarshid continues to strengthen its partnerships with both public and private sectors, and our collaboration with Jeddah Airports Co. is a pivotal step toward establishing new energy efficiency benchmarks in the aviation sector, reflecting a future that merges operational excellence with environmental responsibility.”

Mazen bin Mohammed Johar, CEO of JEDCO, expressed his enthusiasm for the collaboration, emphasizing that the agreement is a significant step in advancing the company’s efforts to enhance the operational efficiency of airport facilities.

Johar emphasized that the agreement aligns with the National Aviation Strategy’s goal of operating a world-class, sustainable airport with high energy efficiency standards, consistent with Vision 2030.

He highlighted KAIA’s achievements in environmental preservation, including sustainability projects such as a recycling initiative that reduces carbon emissions and achieves net-zero targets, electricity and water conservation projects utilizing solar panels and smart technologies, and air quality monitoring in collaboration with the National Center for Environmental Compliance.

He said that the airport has increased green spaces to mitigate carbon emissions.

Established in 2017, Tarshid specializes in retrofitting buildings and facilities to improve energy efficiency and sustainability across government and private sectors. The KAIA project is among its key initiatives with the private sector, aiming to encourage the aviation industry to adopt sustainable practices.

By the end of the third quarter of 2024, the company had achieved annual energy savings of 7.3 terawatt-hours across various projects, equivalent to conserving over 11.7 million barrels of oil equivalent and avoiding approximately 4.2 million metric tons of harmful emissions. These efforts equate to the environmental impact of planting more than 69.4 million seedlings annually, as per SPA.

Tarshid has recently signed a similar agreement with SAL Logistics Services, underscoring its role in advancing energy efficiency and sustainability across both governmental and private sectors. 


Saudi non-profit sector revenues surge 33% to $14.4bn in 2023

Updated 7 min 36 sec ago
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Saudi non-profit sector revenues surge 33% to $14.4bn in 2023

RIYADH: Saudi Arabia’s non-profit sector recorded revenues of SR54.4 billion ($14.4 billion) in 2023, marking a 33 percent year-on-year increase, according to data from the Saudi General Authority for Statistics.  

The sector’s total expenditures also rose by 33 percent, reaching SR47 billion, while employee compensation climbed 17 percent to SR21.7 billion. 

The health sector led the revenue surge with a 70 percent increase compared to the previous year. Education and research activities followed, growing 53 percent, while volunteer intermediary and enhancement activities rose 36 percent. Together, these areas were the largest contributors to the sector’s growth. 

Saudi Arabia’s non-profit sector has seen rapid growth, aligning with the objectives of Vision 2030. As of March 2024, the Kingdom had 4,721 registered non-profit organizations — a 182 percent increase since 2018.  

On the spending front, the health sector led with a 74 percent year-on-year rise in expenditures in 2023, followed by education and research activities with a 55 percent increase, and environmental activities, which grew by 34 percent. These categories contributed the most to the sector's overall spending.  

Employee compensation reflected similar trends, with education and research activities seeing the sharpest growth at 84 percent. Environmental activities recorded a 38 percent rise, while volunteer-related activities saw a 29 percent increase in compensation. 

In terms of workforce distribution, cultural and recreational sectors emerged as the largest employers, accounting for 27.6 percent of total employment in the non-profit sector. Social services followed at 27.2 percent, with development and housing activities comprising 12.4 percent. Health-related roles accounted for 11.5 percent, and education and research activities contributed 7.5 percent, while other non-profit activities made up the remaining 13.8 percent. 

This distribution marked a shift from 2022, where social services led at 29.7 percent, followed by cultural and recreational activities at 25.4 percent. 

This growth in the non-profit sector has raised its contribution to the gross domestic product to 0.87 percent, exceeding the 2023 target of 0.51 percent and aiming for an ambitious 5 percent by 2030. 

Additionally, the Kingdom has surpassed its target of 1 million volunteers six years ahead of schedule, achieving this milestone by the end of 2024. 


Dubai sees 7.4% surge in international visitors through August 2024

Updated 26 December 2024
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Dubai sees 7.4% surge in international visitors through August 2024

RIYADH: Dubai recorded a 7.4 percent year-on-year increase in international visitors from January to August 2024, reaching a total of 11.93 million, according to recent data from the Dubai Department of Economy and Tourism.

The report highlights that Western Europe, South Asia, and the Gulf Cooperation Council remain the top three source markets for the emirate, collectively accounting for more than 50 percent of all international visitors.

This growth in tourism mirrors Dubai’s strong market performance, with both the average daily rate and revenue per available room seeing year-on-year increases of 2.5 percent and 2.7 percent, respectively, between January and September.

Meanwhile, according to the latest JLL report, Dubai’s hotel inventory grew by 240 rooms in the third quarter, bringing the total to approximately 155,400 rooms. The report also anticipates an additional 4,800 rooms will be added by the end of 2024, mainly in the four- and five-star categories.

Major projects like Marsa Al-Arab, The Island by Wasl, and Dubai Islands are expected to set new benchmarks for luxury beachfront real estate, further driving growth in the hospitality sector.

However, the JLL report also noted an emerging trend of price sensitivity within the luxury hotel segment. Increased competition from other regional and global tourist destinations has led to a shift in the spending behavior of high-end travelers.

In response, luxury hotel operators are adjusting their ADR to maintain higher occupancy levels, a strategy that is also being adopted by mid-scale and budget hotels.

As competition in the hospitality market intensifies, hotel operators are focusing on improving guest experiences, food and beverage offerings, and overall service quality to attract visitors and stay competitive. Price fluctuations in the luxury segment are expected as operators align rates with changing demand patterns.

In another sign of Dubai’s growing global appeal, Dubai International Airport reported a record 44.9 million passengers in the first half of 2024. CEO Paul Griffiths emphasized the airport’s strategic importance as a global aviation hub and reiterated Dubai’s position as a leading destination for business, tourism, and talent. With these strong indicators of growth, Dubai is well on track to solidify its place as one of the world’s top travel and tourism destinations.


Saudi Arabia’s logistics centers surge 267% amid Vision 2030 push

Updated 26 December 2024
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Saudi Arabia’s logistics centers surge 267% amid Vision 2030 push

RIYADH: Saudi Arabia’s logistics sector has seen notable growth, with the number of facilities increasing by 267 percent since 2021, according to a report by the General Authority for Statistics. 

In 2023, the Kingdom had 22 hubs spanning over 34 million sq. meters, underscoring the nation’s push to become a regional logistics leader under its Vision 2030 plan.

The Eastern Region topped the list in terms of the number of logistics centers, with six hubs covering an area of 6.3 million sq. meters.

However, the Makkah Region occupied the highest total area, with five centers spanning 20 million sq. meters, followed by Riyadh with five centers covering 4.9 million sq. meters.

The report also highlighted that the Kingdom had 12,451 warehouses in 2023, covering a total area of 22.8 million sq. meters.

Riyadh accounted for 52.9 percent, occupying 10.6 million sq. meters, followed by Makkah with 17.9 percent, the Eastern Province with 14.3 percent, and other regions making up the remaining 14.9 percent.

According to the report, general warehouse licenses were the most prevalent, totaling 6,923 and making up 55.6 percent of all licenses. Humidity-controlled warehouses followed with 2,115 licenses, representing 17 percent of the total, while refrigerated warehouses accounted for 16 percent with 2,006 licenses.

The maritime sector dominated cargo transport by quantity with 308.7 million tonnes, followed by 24.9 million tonnes transported via land, 14.3 million tonnes by rail, and 918,000 tonnes via air.

The report also revealed that the goods transport segment registered 7,963 valid licenses, with Riyadh region leading the way with 1,996 active licenses.

Saudi Arabia’s warehousing and logistics sector is undergoing a transformative surge, driven by Vision 2030 and supported by significant government and private investments.

According to a November report by Maersk, a leader in integrated logistics, the Kingdom is poised to become a global trade and logistics powerhouse. The market is projected to reach $38.8 billion by 2026, growing at a compound annual growth rate of 5.85 percent.

This growth reflects Saudi Arabia’s strategic positioning as a regional logistics hub, supported by its $106.6 billion commitment to expanding land, air, and sea cargo capacities.

The Saudi Ports Authority’s $4.5 billion investment into maritime logistics in 2023 is a testament to this vision. Coupled with giga-projects like NEOM and the National Industrial Development and Logistics Program, the country aims to capture 55 percent of the Gulf Cooperation Council’s logistics market while exponentially increasing non-oil exports.

According to Knight Frank’s Industrial and Logistics Market Review for the first half of 2024, warehouse occupancy in Saudi Arabia reached a record 97 percent nationally in mid-2024, underscoring strong demand for storage and light industrial facilities.

Riyadh and Jeddah have emerged as focal points, with high lease rates and increasing global interest from firms like Maersk, DB Schenker, and DP World.

Additionally, the rise of e-commerce and digital logistics solutions has catalyzed innovation and competition, positioning Saudi Arabia at the forefront of logistics advancements in the region.

Digital transformation

According to the report, the postal and parcel sector in Saudi Arabia handled over 140 million items in 2023, supported by 1,300 sales outlets, with an average delivery time of just 2.45 days — highlighting the sector’s growing efficiency.

Meanwhile, customs and digital transport advancements continue to reshape the logistics landscape. Customs clearance activity licenses totaled 170 in 2023, with airports accounting for 47 licenses.

Additionally, 37 delivery app companies were licensed for freight transport, signaling a significant shift toward digital innovation in the sector.


Egypt pays off $38.7bn in debts in 2024

Updated 26 December 2024
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Egypt pays off $38.7bn in debts in 2024

RIYADH: Egypt has successfully repaid $38.7 billion in debts during 2024, including $7 billion in November and December, demonstrating its commitment to meeting financial obligations despite significant economic challenges.

The announcement was made by Egyptian Prime Minister Mostafa Madbouly during a Cabinet meeting, where he emphasized the government’s efforts to manage debt repayments in the face of a volatile global economic environment.

As Egypt continues to tackle its economic difficulties, the country is also set to receive around $1.2 billion from the International Monetary Fund under a staff-level agreement for the Extended Fund Facility program. The agreement, which is pending approval from the IMF’s executive board, aims to provide crucial financial support to stabilize Egypt’s economy.

This funding is part of Egypt’s broader strategy to stabilize its economy amid soaring inflation and lower-than-expected revenues, including a significant drop in earnings from the Suez Canal.

“The Egyptian authorities have consistently implemented key policies to maintain macroeconomic stability, despite the ongoing regional tensions and the sharp decline in Suez Canal receipts,” said Ivanna Vladkova Hollar, who led the IMF mission to Egypt.

Egypt’s Foreign Minister Badr Abdelatty revealed last month that the country had lost $8 billion in Suez Canal revenues, underscoring the broader economic challenges.

In response, the IMF and Egyptian authorities have agreed to revise the country’s fiscal consolidation strategy, allowing for crucial social programs aimed at supporting vulnerable groups and the middle class, while ensuring long-term debt sustainability.

“Special attention will be required to manage fiscal risks related to state-owned enterprises in the energy sector, and to enforce the strict implementation of the public investment ceiling, which includes capital expenditures from public entities operating outside the general government budget,” added Hollar.

The reduction in external debt is a significant achievement, reflecting the Egyptian government’s commitment to managing its financial obligations despite the ongoing global economic turbulence.

Despite economic hurdles like rising inflation and fiscal deficits, Egypt has worked to balance addressing external debt with fostering sustainable growth. This reduction in debt is expected to improve Egypt’s creditworthiness, sending a positive signal to international markets and potentially attracting more global investment.

In an effort to stimulate further economic growth, Madbouly also announced plans to privatize several airports and banks, with the aim of boosting private sector involvement in the economy.