Saudi Arabia’s Red Sea project awarded contracts worth 14.5bn riyals this past year

June 22, 2021 Photo News
The Red Sea Development Company (TRSDC) awarded contracts worth 14.5 billion Saudi riyals ($3.86bn) in 2020 as the business pushes ahead with the construction of a mega tourism project on the country’s west coast.

In total, the company awarded 500 contracts, with local companies clinching 70 % of the deals, TRSDC said in its inaugural sustainability report on Monday.

A few of the key contracts awarded in 2020 are the delivery of an airside package of works to an all-Saudi jv, as well for construction of coastal village workers' accommodation, and management accommodation, studio apartments and townhouses on the same site. Contracts were also awarded for the construction of a hotel and for site-wide wastewater and sewage treatment.

TRSDC caused the kingdom's General Authority for Small and Medium Enterprises, also called Monsha'at, to inspire local companies to bid for work and can be encouraging local investors to participate.

"The Red Sea Project offers numerous investment opportunities, enabling companies of different sizes and sectors to donate to this one-of-a-kind development, elevating the Kingdom of Saudi Arabia's position as a worldwide investment powerhouse," TRSDC's chief executive John Pagano said in the report.

TRSDC, which is owned by the kingdom’s Public Investment Fund, is developing 16 hotels with 3,000 rooms across five islands and two inland sites as part of the first phase of the project on Saudi Arabia’s west coast. The project is expected to welcome its first guests by the finish of 2022, when the airport terminal and first hotels are because of open.

Upon completion in 2030, The Red Sea project will comprise 50 resorts, offering up to 8,000 hotel rooms and a lot more than 1,000 residential properties across 22 islands and six inland sites.

The project is expected to generate 22bn riyals of income annually by 2030 and 464bn in cumulative revenues through its construction cycle and its own 10 years of steady procedure by 2040, based on the report. Additionally it is likely to support 70,000 jobs by 2040.

It will be powered by 100 % renewable energy and can house the “largest off-grid renewable energy systems in the world and the world’s most significant tourism destination to be powered solely by renewable energy,” in line with the report.

Last year, the business signed a 25-year PPP agreement which includes the delivery of sustainable energy to power utilities covering phase one of the project.

“Through this PPP, we expect to generate up to 650,000 megawatt hours of 100 % renewable energy to provide the destination and other utility systems during the period of the concession agreement,” it said.

The company is currently exploring various options to fully capture large amounts of skin tightening and each year by adopting large scale marine microalgae production farms, boosting biologically various habitats, adopting nature-based solutions for removing carbon and direct air capturing.

Earlier this month, Saudi Arabia’s Acwa Power signed an agreement with Dubai-based Neutral Fuels to supply net-zero biofuel - a clean type of fuel that lowers emissions - to power transportation work at the site.

In April, TRSDC secured 14.12bn riyals in funding through the first locally-denominated Green Financing credit facility.

The developer raised the administrative centre through term loans and revolving credit facilities from four banks in Saudi Arabia to invest in construction work.