Local firm wins SR2.5bn contract on Saudi security network programme

18 June 2014

Local contractor will build various security facilities for Interior Ministry at two locations

Saudi Arabia’s Interior Ministry has awarded an estimated SR2.5bn ($667m) to the local El-Seif Engineering Contracting to build phase 2b of its security compounds network programme, also known as the King Abdullah Project (KAP).

Phase 2b of the programme will involve building various, headquarters, administrative and residential buildings at sites in Hail and Tabuk. This is the second contract that El-Seif has been awarded on the scheme in the past year, with the local contractor winning the contract to build phase 2a of the project in December.

Packages 2a and 2b were formerly part of the package awarded to the local Saudi Oger in 2011 for the second phase of the KAP security network scheme. The ministry cancelled Oger’s contract in 2012 for undisclosed reasons, and the ministry has retendered the second phase in five packages. The Interior Ministry received bids for phase 2c in October last year, but has still not awarded the contract.

For phase 2d, the Interior Ministry has split the phase into six packages. Cyprus-based Joannou & Paraskevaides (J&P) submitted the lowest price for four of the packages in February, with El-Seif submitting the lowest bid for the remaining two contracts. For packages 2, 3, 4 and 5, J&P submitted the lowest prices, ranging from SR1bn ($267m) to SR1.6bn. For package 1, El-Seif submitted a price of SR2.2bn, while for package 6, the contractor submitted the lowest bid of SR3.5bn.

In February this year, contractors submitted bids for phase 2e of the KAP programme. J&P submitted the low bid for five packages, while Beijing Emirates offered the lowest prices for the remaining three contracts. Each package is estimated to be worth between SR500m and SR1bn.

The security compounds will be used to house, educate and train members of the kingdom’s public security, civil defence, police, passports division, and special security and investigative forces. The facilities have been designed to include schools, mosques, theatres, civilian dormitories, military barracks, administrative buildings, training facilities and units for recreation and entertainment.

The KAP programme will cover the construction, operation and maintenance of 28 types of facilities at more than 50 locations. In total, the ministry is expected to spend more than $15bn across five phases of the project.

Most of the security premises will be constructed in and around Riyadh, but facilities will also be built in the provinces of Qassim, Hail, Tabuk, Jeddah, Medina, Taif, Al-Jouf and on Saudi Arabia’s northern borders.

The award of the latest contract on the KAP programme will please contractors interested in the kingdom’s construction market, which has had a slow start to 2014. The award brings the total contract awards for construction projects in the kingdom to $4.4bn for the year-to-date, a 66 per cent drop on the $12.8bn of construction contract awards made in the first half of 2013, according to data from regional projects tracker MEED Projects.

The Interior Ministry has become an increasingly key client in Saudi Arabia’s construction sector in recent years. Since 2012, the ministry has awarded $13bn-worth of construction contracts, 28 per cent of the total SR46bn civil construction deals awarded in the kingdom in that period.

It is not just the KAP programme the Interior Ministry is developing, as it oversees several other major construction schemes. These include its new Jeddah headquarters, for which contractors are due to submit bids on 14 July. In 2013, the ministry awarded $2bn-dollar-plus dollar contracts to the local ABV Rock and Saudi Binladin Group (SBG) to build medical cities in Riyadh and Jeddah.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications