Saudi Arabia’s General Authority of Civil Aviation (Gaca) has not awarded any new contracts to build new or expand existing airports in 2016. The only major deal signed this year is a five-year contract to operate and maintain (O&M) the new Terminal 5 at Riyadh airport. 

Several domestic airport projects, whose combined value is estimated by regional projects tracker MEED Projects at $1.4bn, were due for award this year. This value excludes the planned Taif airport public-private partnership (PPP) project, which was put on hold earlier this year.

The lack of new awards in the sector so far stands in contrast with reassurances made earlier this year that the budget for the kingdom’s airport modernisation plan will not be affected by the ongoing austerity measures due to lower oil revenues.

The kingdom has awarded some $15.6bn airport contracts between 2006 and 2015, peaking in 2010, when contracts worth in excess of $7bn for the construction of the new terminal at Jeddah’s King Abdulaziz International was awarded to Saudi Binladin Group. This project was due for completion this year, but it is now understood that the target completion date has been pushed back by a year.

Some $320m-worth of projects are undergoing bid evaluation, with over $25bn planned, including the further two phases for Jeddah’s King Abdulaziz International, which carry an estimated budget of $20bn.

The Jizan airport expansion, which was awarded in 2015 to a joint venture of Safari Company, Saudi-Lebanese Construction and Nassir Hazza & Brothers, has also been put on hold earlier this year following a suggestion by Saudi Aramco that the location of the new airport carries potential for oil and gas exploration.

Gaca also recently cancelled the tender for the O&M contract for the Jeddah airport. It is unclear if it will retender the contract ahead of the airport expansion project’s expected completion in 2017.

Saudi Arabia’s 27 airports processed 81.9 million passengers in 2015, 10 per cent higher than the previous year.

It is not unlikely for airport passenger growth to slow this year, given the fall in the number of haj visitors. It is understood that only 1.86 million participated in the annual religious pilgrimage this year, down from a peak of nearly 3 million a few years earlier.