JEDDAH: The value of awarded contracts in Saudi Arabia maintained its momentum recaptured in the fourth quarter of 2014 to reach SR57.3 billion in first quarter of 2015, recording a marginal decrease of 7 percent from the previous quarter.

The main contributing sector was health care, accounting for 26 percent of awarded contracts at (SR15.0 billion), followed by residential real estate (SR12.0 billon) and industrial (SR6.0 billon), according to a report by the National Commercial Bank.

The value of awarded contracts in January jumped to SR30.4 billion, which had the highest monthly value of awarded contracts during Q1, 2015. The Riyadh region amounted for the largest share of the value of awarded contracts, which is largely attributed to the new military medical city. It is followed in terms of share of the value of awarded contracts, but with a wide margin, by the Jazan region, and then Eastern Province.

The SR57.3 billion in awarded contracts during Q1, 2015 reflects the continued strength of the construction industry and also shows that the Kingdom can afford to keep spending close to its recent past levels, even at lower oil prices.

The Construction Contracts Index increased to 290.78 points by the end of the first quarter of 2015, from 234.48 points recorded at the end of 2014, yet still below the year end peak of 2013’s 465.03 points. The CCI exhibited volatile swings during 2014, then reversed direction in the Q1, 2015. The February’s awarded contracts value resulted in the CCI rising by 17 percent to 300.85 points, reaching its highest level during Q1, 2015, and then settling at 290.78 points in March. This continued strong reading of CCI confirms the growing volume of projects that will be under implementation.

The NCB report said Riyadh region captured 33 percent of the total value of awarded contracts during Q1, 2015. The largest share in the Riyadh's projects was attributed to the medical city contract being awarded by the Ministry of Defense in the healthcare sector. The Jazan region witnessed two large contracts being awarded in the residential real estate sector, two sugar refinery projects in the industrial sector, and one large contract in the transportation sector. As for the Eastern Province, two large contracts were awarded by Saudi Aramco in the oil and gas sector, and for the Makkah region, a major contract was awarded in the residential sector.

January

The value of awarded contracts showed an increase in January, reaching SR30.36 billion. The healthcare, transportation, water and oil & gas sectors were the largest contributors. Three major contracts were awarded in the healthcare sector. The largest contract amounting to SR14.25 billion was awarded by the Ministry of Defense to Saudi Bin Laden Group. This contract called for the construction of phase 1 of the Military Medical City in Riyadh. The second and third contracts worth SR367.5 million, and 262.5 million were awarded by the Ministry of Health to Almajal Alarabi Holding for the construction of two 500 beds mental health hospitals in Taif and Jeddah, respectively.

Within the transportation sector, three major contracts were awarded. The largest contract in the amount of SR1.8 billion was awarded by the General Authority of Civil Aviation (GACA) to Al Jaber Group to construct Abha regional airport in Asir province.

The second largest contract was awarded by Arriyadh Development Authority (ADA) to Spain’s Indra worth SR1.18 billion to implement the entire ticketing and access control systems for the Riyadh Metro, which is currently under construction. The project is expected to be completed by the first quarter of 2018. The third project in the amount of SR652 million was also awarded by GACA to Almabani for the Improvement and renovation of runways in seven areas: Abha, Tabuk, Baha, Rafha, Tarif, Qysuma, Sharoura.