EXCLUSIVE: Turkish/local team to upgrade Riyadh airport

09 May 2017

Contract with Hochtief-led team cancelled in 2016

A joint venture of Turkey’s IC Ictas and the local Al-Rashid Trading & Contracting has been awarded a four-year contract to redevelop four existing terminals at the King Khaled International Airport in Riyadh.

The team lost its bid for the contract to upgrade the terminals in 2015 to a joint venture comprising Germany’s Hochtief, local Nahdat al-Emaar and India’s Shapoorji Pallonji.

The contract with the Hochtief-led team, however, was cancelled in 2016.

Unlike the cancelled contract, which calls for the construction of new concourses, the new contract entails mainly renovation and refurbishment works that aim to expand the terminals’ capacities and improve services, according to a source familiar with the transaction.

The value of the new contract has not been disclosed.

The previous deal was split into two packages - one for terminals 1 and 2, and a second one for terminals 3 and 4. Hochtief confirmed in 2015 that it was awarded a $1.45bn contract for package 2. It is unclear if package 1 was officially awarded.

Phase 1 of the new contract entails work on the unused Terminal 4, which is understood to have been turned over to the contractors in late April.

“The renovation will be conducted in phases, starting with Terminal 4,” the source tells MEED.

The next phase will involve renovations for Terminal 3, which has been closed since August last year. Terminal 3 caters to domestic flights, which have been gradually moved to the newly completed Terminal 5 since mid-2016.

Succeeding phases will entail redevelopment work for terminals 1 and 2, which cater to international flights.

Terminal 5, which was completed in 2016, is being operated and managed by Dublin Airport Authority (DAA) under a five-year contract with the General Authority of Civil Aviation (Gaca). A joint venture of Turkey’s TAV and local Al-Arrab Contracting won the $430m contract to build the terminal, which has a capacity to handle up to 12 million passengers annually, in 2012.

A new terminal, Terminal 6, is now being planned. It will be developed using a build-operate-transfer (BOT) model.

The ongoing redevelopment of King Abdulaziz International is the first of a three-phased expansion plan meant to take the airport’s annual passenger capacity from the current 20 million, inclusive of Terminal 5, to 80 million by 2035. The three-phased project initially had a total budget of $28bn.

King Khaled International processed 23.7 million passengers in 2016, up 5 per cent compared to the previous year.

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