NEOM project has been fast tracked to meet deadline, says top executive

Work has also commenced on The Line, a series of communities built along a 170-km strip of land from the Red Sea deep into the interior of Saudi Arabia, integrated with The Spine, the transport and logistics backbone that will service The Line.
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Updated 20 February 2022
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NEOM project has been fast tracked to meet deadline, says top executive

  • Smythe says 2023 will see a speed up of large-scale permanent construction in all areas

RIYADH: Brett Smythe has a big and challenging task ahead of him. Smythe, who is the chief projects officer of NEOM, has been commissioned along with his team to turn the ambitious dream of Saudi Crown Prince Mohammed bin Salman of a $500 billion futuristic megacity into a reality.

And he is exactly doing that.

“When Saudi Arabia’s visionary NEOM project was announced by Crown Prince Mohammed bin Salman in 2017, it caught the attention of the world with its ambition and scale — an attempt to achieve something that has never been achieved before, redefining livability, business and conservation. A cornerstone of Vision 2030 that is driving economic diversification in the Kingdom,” Smythe told Arab News in an exclusive interview.

Since then, NEOM’s strategy has grown up, with significant developments underway.




Brett Smythe, NEOM chief projects officer. (Supplied)

All regions of NEOM will be built simultaneously, in keeping with the project’s mission to accelerate and deliver progress, according to him.

Smythe gave thorough explanations on the progress of the project.

“Work has also commenced on The Line, a series of communities built along a 170-km strip of land from the Red Sea deep into the interior of Saudi Arabia, integrated with The Spine, the transport and logistics backbone that will service The Line. Early grading work has already commenced, and major contracts are progressing for The Spine infrastructure to Bechtel (executive project manager), AECOM (lead designer) and China Railway Construction Corp. (adits and portals),” Smythe noted.

Work has started on OXAGON, a radical new model for future manufacturing centers, as well as the civil engineering and infrastructure for its water innovation hub.

“Construction has made important headway on NEOM’s road and utility backbone, its first permanent villages, marine works and social infrastructure,” Smythe said.

He also pointed to the world’s largest volumetric mass modular manufacturing facility in NEOM is also being established, and additional work is commencing on major energy, water and transport assets, hospitality venues, airport upgrades, island tourism destinations and a marina.

Smythe promised that 2023 will see a speed up of large-scale permanent construction in all areas. Across its 26,500 square kilometers, covering both land and maritime regions, the above scale of development still only accounts for 5 percent of NEOM in total — maintaining the project’s conservation goals and promise to shape a future in harmony with nature.

He proudly indicated that the scale of the work on this project has never been witnessed before.

“We’re building something on a scale never seen before, using new technologies to bring to life one of the world’s most exciting and disruptive projects. As NEOM progresses through the construction of the project, it will create the most advanced economic construction ecosystem in the world, which will go on to contribute to the long-term gross domestic product of NEOM, Saudi Arabia and beyond,” Smythe said.

HIGHLIGHTS

All regions of NEOM will be built simultaneously, in keeping with the project’s mission to accelerate and deliver progress.

Construction has made important headway on NEOM’s road and utility backbone, its first permanent villages, marine works and social infrastructure.

There are currently over 11,000 workers from 44 contractors on site.

 

New perspective

Smythe and his team are putting the final touches on the construction of essential support infrastructure.

“We are finalizing the construction of the essential support infrastructure including logistics parks, roads and utilities. Massive scale permanent work is ramping up, and it will go on for the rest of this decade,” he said.

The teams had a robust pipeline of work and schedules set for the next 18 months.

“Our master plans have developed considerably, so much so that we are significantly opening up our permanent works. We are open for business, and hosted 300 design and construction leaders in NEOM who were given a detailed overview of how the project’s vision is coming to life.”

There are currently over 11,000 workers from 44 contractors on site; over 8,000 pieces of plant and heavy equipment and over 34 million job hours completed to date.

Permanent facility works have already commenced in OXAGON, as well as the NEOM Logistics Park. The 12-square-km park includes new construction villages that will support the initial communities of 30,000, expanding to well over 150,000 within the next two years, and will specifically cater to construction requirements.

Additionally, the logistics park will include manufacturing and distribution hubs servicing long-term construction, along with 30 initial concrete and asphalt batching plants, and waste segregation and recycling areas. This infrastructure will complement and enable the latest in offsite manufacturing, design and construction automation.

Smythe stressed that Saudi Arabia is on the verge of the biggest construction boom in the world.

“It is essential to take advantage of this development to benefit NEOM and the whole Kingdom. We will work with our partners to create a design and construction economy, including the full value chain to act as a construction hub for companies in NEOM and Saudi Arabia,” he added.

Smythe said the construction ecosystem of NEOM is being pioneered to meet the challenges of the project’s scale and pace.

“We are committed to positively disrupting the way projects are conceived, planned and delivered. NEOM will serve as a living laboratory for research and development into design and construction processes and materials. In fact, the full development process, from planning, to design, construction and operations, will be enabled by advanced technologies designed to increase efficiency and sustainability, creating the largest modern methods of construction (MMC) ecosystem in the world and leveraging best practice with worker welfare.”

 

Pillars of the project

To build at the required pace, a significant proportion of the work will be moved offsite to be prefabricated in factories. The application of MMC for both infrastructure and buildings, integrated with innovations including 3D printing, autonomous vehicles, new materials and structural forms, will drive benefits in speed, cost, quality, health and safety, and sustainability. Additionally, the development of these capabilities will establish NEOM as a global center of best practice for construction innovation, creating new businesses and skilled jobs.

In his view, better planning, design and execution, using MMC and supported by a variety of digital tools together with recycling, will allow NEOM to send zero construction waste to landfill, use fewer natural resources and reduce emissions from both construction and operations when compared to traditional buildings and infrastructure. This has significant sustainability benefits.

Circular economy techniques will also be enormously important for NEOM.

“Our focus within our master planning process is the designing of buildings and communities for both their intended use, and for their next life; details of the materials used will be recorded so we can plan for their next life.”

Smythe’s team is committed to significantly reducing embodied carbon, and using sheer scale, and to work with industry to reduce emissions from concrete, one of the largest sources of CO2 in construction.




Work has started on OXAGON, a radical new model for future manufacturing centers. (Photo courtesy of NEOM website)

Sustainability

NEOM’s long-term ambition is to be able to deliver net-carbon-zero communities in the future, and the starting point is how we build.

“To achieve this, we are exploring alternative structural forms and building materials, and collaborating with the entire supply chain, including the cement manufacturers and vehicle suppliers, to minimize the carbon footprint of our construction activities,” Smythe said.

NEOM is looking at significant pilot projects that adopt the use of materials and structures that will reduce concrete demand by over 30 percent and will phase in tools, techniques and powertrain shifts over time to develop viable large-scale zero-emission construction equipment and vehicles to reduce emissions even further. Longer term, NEOM will be installing renewable energy grid across NEOM’s construction sites.

According to the CFO, Digital technologies will play a fundamental leading role during NEOM’s planning, design and procurement processes, through construction, and critically, over the lifetime of operations and management.

NEOM will tap into its core digital backbone right from the start of the design phase and into construction; Singapore is the only place in the world that has anything comparable, and it was initiated recently and retroactively.

By digitalizing all its systems from the start of development, NEOM will be able to optimize all of its processes within the life cycle of design and construction.  

 

AI, machine learning

The development team is exploring the integration of virtual supply chain platforms, the future of procurement and dealing with suppliers linked to the digital backbone.

“This will be further enhanced through the use of AI and machine learning to constantly improve efficiencies, reduce work hours and enable construction at speed while driving improvements in both quality and sustainability. In short, we will be deploying advanced MMC using sustainable and digital technologies and through this, we will be supporting both the Kingdom’s and the global construction industry’s journey to a new paradigm,” Smythe said.

 

Investing in humanity

The team is building a new region and with it comes obligations to change the role of workers in construction.

The purpose is to create an industry defined by high skills, automation, factory working and one where the traditional risks are no longer tolerated.

This will be a significant change program, and it is one that underpins NEOM’s overarching approach to health and welfare, to training and to engagement, according to Smythe.

“Technology is a key enabler, but much more than that, we seek to significantly increase the value of a person-hour in our industry. We are taking a different approach to how we design our accommodation, to training, to the working environment and ultimately to integration in society. This will continue to underpin every decision that we make,” he concluded.


Saudi authorities plan to boost assets under management to 29.4% of GDP in 2024

Updated 03 May 2024
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Saudi authorities plan to boost assets under management to 29.4% of GDP in 2024

  • Capital Market Authority plans to accelerate the pace of listings by welcoming 24 new companies

RIYADH: Saudi Arabia aims to enhance its stock exchange appeal to foreign investors, targeting 17 percent ownership of free float shares by 2024, a new report has revealed.

According to the 2023 Financial Sector Development Program document, the Saudi Capital Market Authority plans to boost assets under management to 29.4 percent of gross domestic product in 2024 by increasing the investment environment and attracting more investors.
The report, published annually, highlights the achievements in the financial sector, particularly the Kingdom’s ongoing progress in competitiveness indicators related to the capital market, as stated by Mohammed Al-Jadaan, minister of finance and chairman of the FSDP.
Commenting on the development of the financial sector, Al-Jadaan emphasized the importance of innovation and investment in talent and technology.
“We have placed innovation and investment in both talent and technology at the top of our priorities, because we recognize the importance of building a dynamic financial environment that allows companies — especially startups — to flourish and succeed,” the minister stated.
In line with its commitment to facilitating financing in the capital market, the CMA also plans to accelerate the pace of listings by welcoming 24 new companies in 2024.
Moreover, there will be a focus on supporting the development of new and promising sectors, with a target of having micro and small enterprises account for 45 percent of total listings.
Another area of emphasis is the deepening of the sukuk and debt instruments market, with the goal of increasing the debt-to-GDP ratio to 22.1 percent by the end of 2024. These measures aim to provide diverse financing options for companies and further stimulate economic growth.
“The capital market ecosystem continued its efforts to contribute to developing the financial sector and achieving the Saudi Vision 2030,” stated Mohammed El-Kuwaiz, chairman of the CMA. 
“By approving rules for foreign investment in securities and streamlining regulatory procedures, we have witnessed a significant increase in foreign investments in the capital market, reaching SR401 billion ($106.9 billion),” El-Kuwaiz added.
The Saudi Central Bank also reaffirmed its commitment to adhering to international standards and best practices to enhance the strength and stability of the financial sector. 
Initiatives such as developing digital solutions for supervising the financial sector and enabling local and international FinTechs demonstrate the Kingdom’s dedication to embracing technological advancements.
Furthermore, the Financial Academy unveiled its new strategy for 2024-2026, focusing on enhancing human capabilities in the financial sector through training programs and professional certifications. 
The academy aims to increase the number of trainees and improve the quality of its services to meet the evolving needs of the industry.
The 2023 FSDP report highlighted significant progress across sectors like fintech and digital banking. 
The Kingdom saw a surge in fintech companies, surpassing 2023 targets with 216 in operation and launching two digital banks. 
Saudi Arabia claimed the top spot in the Corporate Boards Index among G20 nations and secured second place in various indices. Foreign companies relocated headquarters to the Kingdom, deepening the capital market. 
Moody’s, Fitch, and S&P Global Ratings revised Saudi Arabia’s outlook to “Positive” and affirmed its “A1” and “A+” credit ratings, citing fiscal policy development, economic reforms, and structural improvements. 
Saudi Arabia led venture investments in the Middle East & North Africa, securing 52 percent of total investments in 2023, and allocated SR10 billion to support small and medium enterprises across economic activities and regions in the first half of the year.


Islamic finance industry projected to grow in 2024-2025

Updated 02 May 2024
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Islamic finance industry projected to grow in 2024-2025

  • Global sukuk issuance likely to reach around $170 billion in 2024

RIYADH: The Islamic finance industry is projected to grow globally in 2024-2025 with total assets likely to witness single-digit growth driven by economic diversification efforts, a report said.
It predicted that sukuk issuance globally would hover between $160 billion and $170 billion in 2024, representing a steady momentum from $168.4 billion in 2023 to $179.4 billion in 2022.
In its latest analysis, credit rating agency S&P Global highlighted that the industry grew by 8 percent and 8.2 percent in 2023 and 2022, respectively, stemming from growth in banking assets and the sukuk industry.
According to the US-based firm, Islamic banking assets grew 56 percent in 2023 compared to 72 percent in 2022.
Financial institutions across the Gulf Cooperation Council region accounted for 86 percent of the reserve increase in 2023, with Saudi Arabia becoming the chief contributor, having generated 56.7 percent of the maturation.
“We expect the implementation of Vision 2030 and growth in corporate and mortgage lending to continue supporting the Islamic finance industry over the next 12-24 months. In addition, the UAE showed a stronger contribution in 2023 thanks to the good performance of the non-oil sector,” the report noted.
It added: “Elsewhere, we observed some growth, particularly in Turkiye and Indonesia. The performance in Malaysia and Turkiye was somewhat tempered by the depreciation of the ringgit and the lira.”
According to the US-based firm, the issuance of this Shariah-compliant debt product began on a strong footing in 2024, with Saudi Arabia becoming a key contributor to the performance.
“The drop in issuance volumes in 2023, which mainly resulted from tighter liquidity conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit, was somewhat compensated by an increase in foreign currency-denominated sukuk issuance,” S&P Global said in the report.
It added: “The market has started 2024 on a strong footing, with total issuance reaching $46.8 billion at March 31, 2024, compared with $38.2 billion at March 31, 2023.”
The analysis highlighted that the sukuk market will continue its growth momentum in the near term as financing needs in core Islamic finance countries remain high, given ongoing economic transformation programs, especially in countries like Saudi Arabia.
“We expect the sukuk market to fill in some of these needs. Specifically, we see some opportunities in the structured finance space with banks tapping the sukuk market to refinance their sizable mortgage books,” said the agency in the report.
The agency highlighted that the drive for digitalization and sustainability initiatives have yielded mixed results in the Islamic finance industry.
“While opportunities related to sustainable finance are significant as the industry is concentrated in oil exporting countries, progress has been relatively slow and limited in the global context,” according to S&P Global.
However, the report noted that digitalization has helped the banking side of the industry.
S&P Global concluded the study by saying that the future of Islamic finance is sustainable, collaborative, and digital.
“It is sustainable thanks to the alignment between Shariah principles, overarching pillars of sustainability, and the value proposition of Islamic finance that capture more than just financial objectives,” said the report.
According to the analysis, the future of Islamic finance is collaborative because stakeholders do not want to disrupt the industry equilibrium and erase the development achieved over the past 50 years.
The report added that digitalization will also impact Islamic finance in the coming years, as leveraging emerging technologies could help the industry enhance its efficiency and ultimately increase its value proposition for investors and issuers.


Pakistan says expecting more high-level Saudi business delegations amid investment push

Updated 02 May 2024
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Pakistan says expecting more high-level Saudi business delegations amid investment push

ISLAMABAD: Pakistan expects continued visits by high-level business delegations from Saudi Arabia in the upcoming weeks to further explore investment opportunities facilitated under the Special Investment Facilitation Council, the Foreign Office announced on Thursday.

The statement came just days after Prime Minister Shahbaz Sharif concluded his visit to Riyadh, where he addressed the two-day World Economic Forum conference.

During his visit, Sharif met with Crown Prince Mohammed bin Salman and several Saudi ministers to strengthen bilateral relations and economic partnerships between the two nations.

Prior to his visit to the Kingdom, Saudi Foreign Minister Prince Faisal bin Farhan was in Islamabad with a large delegation, saying the Pakistani administration’s resolve to strengthen the economy would yield “significant benefits.”

“Saudi investors have been coming to Pakistan in recent months, and engaged with the SIFC in terms of exploring opportunities for Saudi investments in Pakistan, and this is an ongoing process, and we expect similar high-level business delegations to undertake visits to Pakistan in the coming days and weeks as well,” Foreign Office spokesperson Mumtaz Zahra Baloch told reporters in her weekly media briefing.

She added that both countries were involved in robust and mutually beneficial dialogue that had gained significant momentum in recent months.

“Pakistan and Saudi Arabia are engaged in consultations with each other in terms of increased Saudi investments in Pakistan, including in the energy domain,” she added.

Asked about reports of Pakistan providing military bases to the US, Baloch called them rumors.

“Pakistani has no plan to provide any bases to a foreign country against any other country,” she said.

Speaking about the Organization of Islamic Cooperation’s summit in Gambia, the spokesperson said the country’s deputy prime minister, Ishaq Dar, would highlight the ongoing genocide in Gaza, the right to self-determination of the people of Jammu and Kashmir, the imperatives of solidarity and unity of the Muslim ummah, rising Islamophobia, issues of climate change, terrorism, and other contemporary global challenges.

She said Pakistan strongly condemned the escalating violations of human rights by Israel and increasing number of illegal Israeli settlements in the West Bank.

“Israel’s actions constitute a breach of international law, including humanitarian laws and other pertinent international laws, and these acts also undermine any prospects of a two-state solution,” she added.


Saudi authority imposes $11.4m in fines on investors for dodgy practices

Updated 02 May 2024
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Saudi authority imposes $11.4m in fines on investors for dodgy practices

RIYADH: Saudi Arabia’s Capital Market Authority slapped fines to the tune of SR42.9 million ($11.4 million) on 13 investors and others found in violation of the law.

A total of SR17 million fines have been imposed on 13 investors “for placing purchase orders that influenced the share price, some of which were linked to sale orders, while trading on the shares of listed companies.”

A CMA statement said: “They and other investors were obligated to pay a total of SR25.9 million for the illegal gains achieved in their investment portfolios.”

The authority clarified that the definitive decision of its Appeals Committee for the Resolution of Securities Disputes resulted from the coordination and mutual collaboration between the authority and relevant entities.

It added that the action was taken in light of the public criminal lawsuit filed by the Public Prosecution.

CMA underscored the importance of investor confidence in fostering the growth and advancement of the financial market. It reiterated its commitment to vigilantly observe any misconduct, apprehend wrongdoers, and ensure the implementation of appropriate measures to impose penalties.

Moreover, it stated that these actions are consistent with the authority’s endeavors to nurture an appealing atmosphere for investors of all types, shielded from unjust, precarious, deceitful, fraudulent, or manipulative activities.


Saudi energy minister lauds growing economic ties with Uzbekistan

Updated 02 May 2024
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Saudi energy minister lauds growing economic ties with Uzbekistan

RIYADH: Saudi Arabia and Uzbekistan’s economic cooperation models reflect mutual commitment to prosperity through shared goals in the two countries’ 2030 plans, said the Saudi energy minister.

During the main dialogue session of the third Tashkent International Investment Forum, Prince Abdulaziz bin Salman emphasized the distinguished relations between the two nations and the commitment of their leaderships to enhance and develop cooperation in all fields, particularly in the energy sector.

Uzbekistan President Shavkat Mirziyoyev also attended the meeting.

The Saudi minister pointed out that economic cooperation between the two countries serves as a model, especially in light of the “Uzbekistan 2030” strategy and the Kingdom’s Vision 2030, with their similar goals aimed at economic growth, diversification, and sustainable development, reflecting a mutual commitment to building a prosperous future for both nations, according to the Saudi Press Agency.

“The bilateral relations saw a notable advancement subsequent to a meeting between Crown Prince Mohammed bin Salman and President Mirziyoyev in Riyadh in 2022,” he said.

Prince Abdulaziz stressed the significance of the energy sector in the growing relations between the two nations, particularly in renewable energy, highlighting the substantial involvement of Saudi companies in Uzbekistan, exemplified by ACWA Power.

He elaborated on the investment flowing between the two countries in this domain, eclipsing $14 billion, with the aim of producing over 11 gigawatts of renewable energy electricity, affirming that Uzbekistan has demonstrated a serious commitment to achieving a fair and equitable energy transition, aligning with the Kingdom’s aspirations.

The energy minister further underscored the rational stances jointly embraced by both nations, placing significant emphasis on the critical aspects of energy security, development, and conservation.

He also underscored the two countries’ collaborative roles in addressing climate change through collective endeavors.

Recently, ACWA Power signed a power purchase agreement with the National Electric Grid of Uzbekistan for the Aral five-gigawatt wind power project worth SR18.2 billion ($4.85 billion).

Two weeks ago, ACWA Power announced it had secured an $80 million equity bridge loan from the Bank of China for its projects in Uzbekistan.

The Saudi entity said the fund will boost its Tashkent 200 megawatts solar photovoltaic power plant and 500 MW per hour battery energy storage system project in Uzbekistan.

“This transaction culminated the initial agreement reached during the 3rd BRF (Belt and Road Forum) summit in October 2023, where ACWA Power was represented by its chairman as a keynote speaker,” the company said in a statement.