The total value of awarded contracts in Saudi Arabia for the third quarter fell to SR7.4 billion ($2 billion) as Covid-related strains on government and private sector entities persist, leading to a slowdown in the construction sector, said a report.
The total value of awarded contracts through the first three quarters of 2020 reached SR63.6 billion, stated US-Saudi Business Council (USSBC) in its Q3 Contract Awards Index.
The index fell to 105.26 points by the end of the third quarter steadily declining through the quarter as the slowdown in the construction sector continued.
A majority of the awarded contracts were in transportation, power, and real estate which accounted for approximately 59 per cent of the total value of contracts awarded.
Water, urban development, and petrochemicals accounted for 32 per cent of the total value while oil and gas accounted for only seven per cent of the total, the lowest on record. Two per cent of the contracts were awarded in other sectors.
Sector-wise, the lion’s share of the awarded contracts (SR1.7 billion) came from the transportation industry followed by power sector with SR1.6 billion and the real estate sector with SR1.1 billion deals, stated the USSBC Index.
Among the regions, the Eastern Province accounted for nearly a third of the value of awarded contracts (32 per cent) in Q3, including a new chlorine derivatives plant and an industrial wastewater processing plant in Jubail.
Makkah Province came a distant second with 20 per cent of contract awards, primarily in the power and real estate sectors followed by Tabuk Province which hit a new high last year with SR1.4 billion contracts (around 19 per cent) including major infrastructure works at Red Sea International Airport.
The other mega project contracts in Q3 include transportation infrastructure works at mega entertainment project Qiddiya in Riyadh Province. According to USSBC, the construction sector continued to weather the Covid-19 pandemic as project owners and contractors faced ongoing challenges.