{"id":108174,"date":"2026-04-30T00:00:00","date_gmt":"2026-04-30T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/?p=108174"},"modified":"2026-04-30T03:10:22","modified_gmt":"2026-04-30T03:10:22","slug":"shelved-gigaprojects-regional-conflict-weigh-on-1q-2026-saudi-project-contract-awards","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2026\/04\/30\/shelved-gigaprojects-regional-conflict-weigh-on-1q-2026-saudi-project-contract-awards\/","title":{"rendered":"Shelved gigaprojects + regional conflict weigh on 1Q 2026 Saudi project contract awards"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <strong>Saudi<\/strong><strong> project contract awards fell to their second-lowest quarterly level in <\/strong><strong>more than five years in 1Q 2026<\/strong>, dropping 51.1% y-o-y to USD 11 bn, according to Kamco Invest\u2019s <a target=\"_blank\" href=\"https:\/\/ent.news\/2026\/4\/1545.pdf\" style=\"\">GCC Projects Market Update (pdf)<\/a>. The slowdown reflects scaled back gigaprojects activity and the fallout from the US and Israel\u2019s war on Iran, which rattled regional markets. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Awards were down across four of Saudi Arabia\u2019s eight project sectors<\/strong>, extending a weaker run that began in 2025 as gigaproject momentum eased and regional instability due to the US-Iran conflict deepened. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>REMEMBER- <\/strong>The Saudi government recently scrapped several gigaproject-related contracts, including USD multi-bn <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2026\/03\/29\/neom-terminates-multi-bn-usd-trojena-lake-contracts\/\" style=\"\">contracts to build a freshwater lake<\/a> at Trojena and a <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/menaplus\/2026\/03\/25\/the-giga-scaleback-continues-as-saudi-exes-usd-1-bn-tunnelling-contract-for-the-line\/\" style=\"\">USD 1 bn tunneling contract<\/a> at Neom\u2019s The Line, while construction at the Mukaab has also recently been halted. The scrapped contracts come as the Kingdom began scaling back Neom following a <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/ksa\/2026\/01\/04\/shifting-the-gigaproject-focus\/\" style=\"\">comprehensive review<\/a> after years of delays, design challenges, and cost overruns.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The sector breakdown:<\/strong> The downturn was led by construction, where awards dropped 64.4% y-o-y to USD 3.4 bn, followed by water, which fell around 85% y-o-y to USD 729 mn. Gas awards dropped to just USD 16 mn and power to USD 148 mn, while the oil sector saw only USD 800 mn of contracts awarded. Chemicals defied the trend, posting the largest absolute increase as awards rose from zero in 1Q 2025 to USD 2.5 bn.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\">The regional picture<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Saudi Arabia was not alone:<\/strong> Total contract awards across the GCC fell 9.7% y-o-y during the quarter to a combined USD 61.2 bn. Along with Saudi Arabia, the UAE drove the downward trajectory, with contract awards dropping 18.5% y-o-y during the quarter to USD 29.2 bn. Bahrain sustained the steepest drop in percentage terms (-87%) but it accounts for the smallest value of awards in the GCC, which helped to mitigate its impact. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>It was a better quarter for Kuwait and Qatar<\/strong>, with Kuwait\u2019s project awards rising more than fivefold to USD 8.1 bn, while awards in Qatar were up 62.1% to USD 8.8 bn.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>In terms of what\u2019s already underway, the Kingdom remains MENA\u2019s largest project <\/strong><strong>market<\/strong>, with USD 735.1 bn of projects under execution, the data shows. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\">What\u2019s next?<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>GCC project activity is expected to slow further<\/strong>, weighed down by spillover effects from the regional conflict. Kuwait, Qatar, and Bahrain declared force majeure on parts of their energy production and export assets, while others reduced their output. These moves are tightening fiscal space and limiting the ability to fund projects.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Still, the regional pipeline remains substantial.<\/strong> Saudi Arabia accounts for nearly 50% of the USD 2 tn in upcoming GCC projects, followed by the UAE with 27.5%. The Kingdom\u2019s future pipeline is worth USD 999.3 bn as of April, led by construction (38%), power (20%), and transport (17%). <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Across the region, construction makes up 39.7% of upcoming projects<\/strong>, followed by transport at 16.3% and power at 15.7%. A total of USD 841.5 bn worth of upcoming projects is in the design phase, with USD 554.1 bn at study stage and USD 220.4 bn in bid evaluation \u2014 pointing to a sizable backlog that could feed a rebound in awards as conditions stabilize, with a recovery tentatively expected from 2027.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The downturn was led by construction, with awards dropping more than 60%<\/p>\n","protected":false},"author":1,"featured_media":108175,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2547],"tags":[10,509,66],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-108174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-infrastructure","tag-enterpriseam-ksa","tag-gigaprojects","tag-infrastructure","wpautop","entry"],"acf":{"mongo_id":"ba2fc4f9-f14b-4b01-9048-9fe0630d0e92","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2026\/4\/1592.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Scaled 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