• Ambitous stadium building programme may now be retendered or downsized
  • Contractors submitted bids last year
  • The $5bn programme involves building 11 stadiums at various locations across Saudi Arabia

Saudi Aramco has still not awarded construction contracts for the $5bn of stadiums it plans to build leading to concerns that the ambitious building programme may be downsized or scrapped.

The deals were expected to be awarded by the end of 2014, but since then progress on the project has slipped. Falling oil prices and a change in the leadership in Saudi Arabia fuelling the expectation that the programme that was launched by King Abdullah bin Abdulaziz al-Saud could be delayed, downsized or cancelled.

“The focus has shifted. Last year it was all about delivery,” says a source close to the project. “It is now all about cost, so it could be retendered, downsized or scrapped altogether.”

In mid-January contractors had been negotiating with Aramco, and several frontrunners had emerged for some of the 11 stadiums. Since then the talks have stalled as it is understood to no longer be a priority for policy makers in the kingdom as capital expenditure plans are reviewed in the wake of lower oil prices. “It seems the new government wants to reassess the programme,” says another source close to the project.

The new Saudi king, King Salman bin Abdulaziz al-Saud, appointed a new cabinet in late January after becoming the Saudi Monarch on 23 January.

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The stadiums programme was being developed by on a fast track basis. Firms first submitted offers for the construction contracts in November, and revised prices were submitted by contractors in mid-December 2014.

Nine groups were invited to bid for the contracts, with a select list for each stadium:

The stadiums are planned for Medina, Al-Qassim, the Eastern Province, Asir, Tabuk, Hail, the Northern Borders, Jizan, Najran, Baha and Al-Jouf.

Contractors that were invited to bid:

Medina

Qassim

Dammam

  • Nasser al-Hajri (local)/Vinci(France)
  • Bouygues (France)/Almabani (local)/Al-Rushaid Construction Company (local)
  • Al-Muhaidib Trading & Contracting (local)/Six Construct (Belgium)

Asir

  • Vinci/Nasser al-Hajri
  • Baytur (Turkey)/Clark Construction (US)
  • Besix/Al-Muhaidib Trading & Contracting

Tabuk

Hail

  • CCC/Strabag
  • Baytur/Clark Construction
  • Nesma & Partners/Salini Impregilo

Arar

  • SBG/Eiffage
  • CCC/Strabag
  • Bouygues/Al-Rushaid Construction Company/Almabani (local)
  • Baytur/Clark Construction

Jizan

  • Vinci/Nasser al-Hajri
  • Bouygues/Al-Rushaid Construction Company/Almabani
  • Nesma & Partners/Salini Impregilo
  • Sixco/Al-Muhaidib Trading & Contracting

Najran

Baha

  • CCC/Strabag
  • Samsung C&T/Azmeel Contracting
  • Vinci/Nasser al-Hajri

Al-Jouf

  • El-Seif Engineering & Contracting/Bam
  • SBG/Eiffage
  • CCC/Strabag
  • Bouygues/Al-Rushaid Construction Company/Almabani
  • Nesma & Partners/ Salini Impregilo

Aramco had appointed a team of firms to project manage the development and construction of the 11 stadiums.

The project management firms that have been appointed are:

The project managers will work with US-based CH2M Hill and UK-based EC Harris, which have been appointed as programme managers.

Aramco is the world’s largest oil exporter and, in light of the decline in oil prices, has recently been reassessing where and how it will spend its money.

Earlier in 2015 the company decided to postpone the rehabilitation of its 550,000 barrel-a-day (b/d) Ras Tanura refinery.

However other projects are continuing. The oil company is currently tendering the $5bn Fadhili gas plant and maintaining its commitment to increase the gas output of the kingdom.

Aramco also recently confirmed that it is in the process of renewing a standby revolving credit facility. The new arrangement will replace the current $4bn facility raised in November 2010 with a syndicate of local, regional and international banks, the oil major said in a statement seen by MEED.

It said the facility would help the company “maintain financial flexibility”, but did not elaborate of the purpose of the loan.

The statement followed reports that Saudi Aramco was in talks with the banks and that the new facility could be increased up to $10bn. The deal is reportedly due to close in the first quarter of the year.

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