Saudi Arabia Infrastructure “Projects Galore”

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KFH Research Ltd KDNPP15024/03/2013 (031903) 30 July 2013 ContentsContents

1.0 2013/2014 Macroeconomics Dynamics 3

2.0 Infrastructure/Construction Sector Dynamics 5

2.1 Robust construction/infrastructure spending in 2013 7

2.2 Social Infrastructure sector 8

2.3 Transport sector 8

2.3.1 Airports 9

2.3.2 Urban Road Networks 10

2.3.3 Expanding Rail 13

2.3.4 Sea Ports 14

3.0 Conclusion and Outlook 15

4.0 Appendix 1: Saudi Arabia – Development Strategies and Opportunities 16

5.0 Appendix 2: Top 100 On-going Projects by Highest Value in Saudi Arabia 19 Saudi Arabia Infrastructure “Projects Galore”

Saudi Arabia Infrastructure “Projects Galore”

1.0 2013/14 Macroeconomics Dynamics After expanding by a faster-than-expected pace of 6.8% in 2012, which was line with its historical average of 6.9% per annum over the last ten years, we forecast the Saudi Arabian economy to grow by 5.0% in 2013 as non-oil economic activities are expected to remain robust with an expansion of 7.0% for 2013, sustained from 7.2% registered in 2012. Our 2013 forecast represents an upward revision from earlier estimates of 4.5%, supported by strong domestic demand growth and a host of planned industrial projects. Growth of the Kingdom’s non-oil sector is expected to offset the decline in the oil sector, which contributes about 20% to real GDP. Given the fall in oil output for the first four months of 2013 to 9.2mln bpd from an average of 9.7mln bpd last year, we project Saudi Arabia’s oil sector to contract by -2.5% in 2013 (2012: +5.5%).

Overall, the Saudi economy will be underpinned by the government’s continuous push for diversification into other non-oil sectors such as manufacturing, construction, wholesale & retail trade, banking & financial services as well as transportation sectors. In addition, the two far-reaching fiscal spending packages announced by the King in early 2011, worth a combined 30% of GDP, will likely continue to provide a boost to consumption growth.

For 2014, we expect economic growth to strengthen further to 5.3% (revised from 5.0%) driven by a rebound of 2.7% in the oil sector as production is projected to increase in line with rising oil demand. As the world’s largest oil exporter holding about a fifth of the world’s proven oil reserves, Saudi Arabia plays a systemic role in the world economy by helping to provide stability to the global oil market. Growth momentum for the largest economy in the GCC region will also be held up by the continued healthy growth of the non-oil sector of 6.0% in 2014. Strong oil production and high oil prices will continue to generate excesses in the economy as well as fiscal budgets, enabling the government to direct huge investments into value-add sectors that will provide sustainable growth over the longer-term. In addition, a stable interest rate environment, benign inflationary pressures and strong credit growth is likely to accommodate further economic growth and development.

Saudi Arabia: Annual Real GDP Growth (2004 – 2014F)

Source: CDSI, Bloomberg, KFHR

One of the Best-Performing Economies among G-20 Historically, Saudi Arabia’s economic performance ranked amongst the best in the G-20, growing at a compounded annual growth rate (CAGR) of 6.6% per annum during the 5-year period of 2008-2012, surpassed only by economic powerhouses, China and India with CAGR growth rates of 9.3% per annum and 6.8% per annum respectively over the same period. The strong economic performance of Saudi Arabia was mainly driven by high oil prices in recent years which strongly contributed to government revenues, enabling the world’s largest oil exporter holding about a fifth of the world’s proven oil reserves to carry out massive fiscal spending to fuel private consumption and create jobs.

G-20: Real GDP Growth (2008-2012) GDP Growth 2008 2009 2010 2011 2012 CAGR 1. China (%) 9.6 9.2 10.4 9.3 7.8 (2008-9.312) 2. India 6.2 5.0 11.2 7.7 4.0 6.8 3. Saudi Arabia 8.4 1.8 7.4 8.5 6.8 6.6 4. Indonesia 6.0 4.6 6.2 6.5 6.2 5.9 5. Argentina 6.8 0.9 9.2 8.9 1.9 5.4 6. Brazil 5.2 -0.3 7.5 2.7 0.9 3.2 7. Turkey 0.7 -4.8 9.2 8.5 2.6 3.1 8. Korea 2.3 0.3 6.3 3.6 2.0 2.9 9. Australia 2.7 1.4 2.6 2.4 3.6 2.5 10. South Africa 3.6 -1.5 3.1 3.5 2.5 2.2 11. Russia 5.2 -7.8 4.5 4.3 3.4 1.8 12. Mexico 1.2 -6.0 5.3 3.9 3.9 1.6 13. Canada 1.1 -2.8 3.2 2.6 1.8 1.2 14. Germany 0.8 -5.1 4.0 3.1 0.9 0.7 15. US -0.3 -3.1 2.4 1.8 2.2 0.6 16. France -0.1 -3.1 1.7 1.7 0.0 0.0 17. Japan -1.0 -5.5 4.7 -0.6 2.0 -0.2 18. UK -1.0 -4.0 1.8 0.9 0.2 -0.4 19. EU 0.5 -4.2 2.0 1.6 -0.2 -0.5 20. Italy -1.2 -5.5 1.7 0.4 -2.4 -1.4 Source: IMF, Bloomberg, KFHR

Non-Oil Sector: Rapid Expansion Having expanded by a robust 7.2% in 2012, non-oil sector growth, which accounts for almost 80% of real GDP, is expected to continue at a remarkable pace of 7.0% in 2013 and 6.0% in 2014 amid strong performance of the manufacturing, construction, wholesale & retail trade and transport sectors. Driven by efforts to diversify away from oil, the government continues to channel oil proceeds into public capital spending on massive infrastructure, power as well as housing projects which will provide a boost to the Kingdom’s construction, real estate, transport and utility sectors. Moreover, the government had also introduced several initiatives and tax breaks to facilitate its non-oil sector. Amongst these policies include Saudi Arabia’s offer of tax incentives and low rental for numerous industrial zones throughout the Kingdom to attract foreign direct investment and to guide it into targeted areas. Most incentives in recent years have gone to manufacturing and industrial companies, especially in petrochemicals production.

Saudi Arabia: Non-Oil GDP Growth (2004 – 2014F)

Source: CDSI, KFHR

G-20: Real GDP Growth (2008-2012) 2013 expansionary budget supports growth GDP Growth 2008 2009 2010 2011 2012 CAGR The Saudi government has published an expansionary budget for 2013 – a record high with spending at SAR 1. China (%) 9.6 9.2 10.4 9.3 7.8 (2008-9.312) 820bln, up 19% on 2012 budgeted figures. The budget reflects an increase in capital spending, in line with the 2. India 6.2 5.0 11.2 7.7 4.0 6.8 government’s wider economic and social objectives including the need to tackle unemployment among Saudis 3. Saudi Arabia 8.4 1.8 7.4 8.5 6.8 6.6 and increase job creation. Education, healthcare and infrastructure expenditure remain the key focus of 2013 4. Indonesia 6.0 4.6 6.2 6.5 6.2 5.9 budget, up 18% y-o-y and controlling close to 45% of total expenditure slated for FY2013. Government spending remains affordable as estimates put fiscal breakeven oil price at approximately USD75-80 per barrel based on 5. Argentina 6.8 0.9 9.2 8.9 1.9 5.4 2013 spending projections. 6. Brazil 5.2 -0.3 7.5 2.7 0.9 3.2

7. Turkey 0.7 -4.8 9.2 8.5 2.6 3.1 The 2013 budget has allocated SAR820bln for 2013, 19% higher than 2012 numbers. However, actual spending 8. Korea 2.3 0.3 6.3 3.6 2.0 2.9 is expected to be substantially higher than budgeted levels as the Saudi budget usually underestimates 9. Australia 2.7 1.4 2.6 2.4 3.6 2.5 government expenditure (2012 actual came in 24% higher than budgeted). The 2013 budget reflects an increase 10. South Africa 3.6 -1.5 3.1 3.5 2.5 2.2 in capital spending to 35% of total government expenditure. This is up from 2012 when capital expenditure 11. Russia 5.2 -7.8 4.5 4.3 3.4 1.8 accounted for approximately 33% of total spending. Key areas of capital spending include social development 12. Mexico 1.2 -6.0 5.3 3.9 3.9 1.6 (notably education, low-income housing and healthcare), utilities and infrastructure. The education sector will 13. Canada 1.1 -2.8 3.2 2.6 1.8 1.2 continue to receive the largest spending allocation, equivalent to 24% of total expenditure while health projects 14. Germany 0.8 -5.1 4.0 3.1 0.9 0.7 are slated to make up 16% of 2013 spending (up 16% y-o-y). Meanwhile, spending on infrastructure and 15. US -0.3 -3.1 2.4 1.8 2.2 0.6 transportation projects will grow 16% y-o-y (approximately 8% of total spending). Housing projects will be an 16. France -0.1 -3.1 1.7 1.7 0.0 0.0 important component of infrastructure spending. 17. Japan -1.0 -5.5 4.7 -0.6 2.0 -0.2 18. UK -1.0 -4.0 1.8 0.9 0.2 -0.4 Saudi Arabia Budget: Expenditure Trends (2006-2013E) 19. EU 0.5 -4.2 2.0 1.6 -0.2 -0.5 20. Italy -1.2 -5.5 1.7 0.4 -2.4 -1.4 Source: IMF, Bloomberg, KFHR

Saudi Arabia: Non-Oil GDP Growth (2004 – 2014F) 2.0 Infrastructure/Construction Sector Dynamics Taking into account 11.6% real growth in 2011 and the sheer number of projects in the pipeline, Saudi Arabia’s construction sector is estimated to have recorded a 9.3% real growth for 2012. We anticipate this trend to continue in the short to medium term on the back of the government's vast infrastructure investment scheme, aimed at staving off public discontent, and expect an annual average real growth of 5.6% between 2012 and 2016. Saudi Arabia's already buoyant construction sector was given an additional boost by a flurry of contract awards over the course of 2011 totaling USD72bln. In 1H211 alone, the value of awarded contracts reached USD50bln - higher that the total value for FY2010 - and overall, 2011 represented a 140% y-o-y increase in contract awards. January 2012 started off equally strong, with a 68% y-o-y increase but fell short of expectations, with the value of awarded contracts declining by 30% y-o-y in 2012.

The sectors that were highlighted in Saudi Arabia's 2012 budget as areas of focus - education, roads, healthcare and urban development - contributed to the strong start of 2012 and were a result of the Saudi government's vast Source: CDSI, KFHR investment scheme. Those sectors alone accounted for more than SAR15bln (USD4bln), equivalent to 30%, of

the total value of awarded contracts. Anchor sectors - such as petrochemicals, power and industrial - accounted for more than SAR23bln (USD6bln), equivalent to 44% of the total value of awarded contracts. Thus, the high number of contracts awarded should feed into strong growth over the coming years and build on a robust existing project pipeline.

Hence, beyond the infrastructure sector, there is considerable scope for construction activity that incorporates social infrastructure, real estate and industrial projects. Industrial projects, mostly related to the hydrocarbons sector, are a major source of construction output growth in Saudi Arabia. A growing number of petrochemicals projects are also boosting construction activity, as the country attempts to diversify its industrial sector away from oil and gas.

In line with this diversification strategy, Saudi Arabia intends to use solar energy to generate 10% of its electricity needs by 2020. The government expects the country's solar energy sector to create 15,000 jobs, encourage the development of solar farms and lead to the establishment of factories for the treatment and collection of raw materials from the related utilities. Over SAR3bln (USD800mln) has been invested in solar energy plants in Yanbu Port in the Madina region and Jubail in the Eastern Province.

Social infrastructure has likewise received a significant boost from the government as a means of placating growing unrest in the country. Saudi Arabia has not escaped the political challenges that have gripped much of the MENA region. In response, the country announced two packages of social benefits (part of the SAR1,444bln (USD385bln) 2010-2014 Ninth Development Plan) amounting to around USD130bln, providing funds for education, healthcare and housing projects. A total of SAR250bln (USD66bln) was pledged for housing alone, with 500,000 new units in the pipeline. If forthcoming, these projects will provide further upside to the construction sector.

Saudi Arabia: Construction Industry Value and Growth

35 14

30 12

25 10

20 8 %

USD Billion 15 6

10 4

5 2

0 0 2008 2009 2010 2011E 2012E 2013F

Construction Industry Value Construction Industry Value, Real Growth - rhs Construction Industry, % of GDP - rhs

Source: SAMA; KFHR; Various

© KFH Research Ltd 6 Saudi Arabia Infrastructure “Projects Galore” the total value of awarded contracts. Anchor sectors - such as petrochemicals, power and industrial - accounted Saudi Arabia Project Market: Key Sectors by Value and Number of Projects for more than SAR23bln (USD6bln), equivalent to 44% of the total value of awarded contracts. Thus, the high number of contracts awarded should feed into strong growth over the coming years and build on a robust existing project pipeline.

In line with this diversification strategy, Saudi Arabia intends to use solar energy to generate 10% of its electricity needs by 2020. The government expects the country's solar energy sector to create 15,000 jobs, encourage the development of solar farms and lead to the establishment of factories for the treatment and collection of raw Source: Zawya, KFHR materials from the related utilities. Over SAR3bln (USD800mln) has been invested in solar energy plants in

Yanbu Port in the Madina region and Jubail in the Eastern Province. Saudi Arabia Project Market: Sector Proportion (% of Total Ongoing Projects)

Furthermore, a draft law revolutionising the mortgage market has also been approved in Saudi Arabia, presaging the formation of a more liberalised housing sector. We believe that the move could prove a huge boon to both domestic firms and international players looking to capitalise on the significant growth potential possessed by the Kingdom. The mortgage law has been under discussion for three decades, but took a long time to be passed due Source: Zawya, KFHR to resistance from religious scholars concerned about its appliance with Islamic, or sharia, law. Overall, the sheer value of awarded contracts during 2011, added to the government's continued investment commitment and 2.1 Robust construction/infrastructure spending in 2013 reforms clearly demonstrates that the expansion of construction activities continues to be a focal point of Saudi's After a relatively disappointing 2012, with awards dropping by approximately 30% y-o-y, the market is expected economy in the short to medium term. to prepare for a robust pipeline of awards in 2013 worth an estimated USD140bln. Saudi is expected to remain the major construction market in the GCC with close to 50% of MENA pipeline in 2013. The Construction and Saudi Arabia: Construction Industry Value and Growth infrastructure sector is expected to retain the lion’s share of awards in 2013 driven by infrastructure spending on roads, railways, airports, hospitals and schools, along with further phases of SAR250bln housing projects across 35 14 the kingdom. 30 12 25 10 Saudi Arabia Infrastructure Projects: Value and Number of Projects

20 8 %

USD Billion 15 6

10 4

5 2

0 0 2008 2009 2010 2011E 2012E 2013F

Construction Industry Value Construction Industry Value, Real Growth - rhs Construction Industry, % of GDP - rhs

Source: SAMA; KFHR; Various

Source: Zawya, KFHR

Saudi Arabia Infrastructure Projects: Sub-Sector Proportion (% of Total Ongoing Infrastructure Projects)

Source: Zawya, KFHR

2.2 Social infrastructure sector Huge investments into the social infrastructure sector are in the pipeline, in part to appease the populace. Both the SAR1.44tln (USD385bln) Ninth Development Plan (2010-2014) and social benefit packages worth a total of USD130bln,announced in response to protests which broke out in 1Q2011, are heavy on social infrastructure spending. Healthcare and education investments are growing, and the potential for private sector participation is increasing. On the other hand, huge social housing projects are in the pipeline, with SAR250bln pledged and 500,000 housing units currently in the planning stages.

2.3 Transport sector Transport is also booming, especially rail infrastructure where USD24bln of projects are currently either underway or in the pipeline. The Haramain High Speed Railway has taken centre stage, with award of the final contract for this project (worth USD1.4bln and awarded to a Spanish consortium) having taken place in July 2011. Attention should now turn to the SAR26bln (USD7bln) Saudi Landbridge project, an east-west rail line which will link Jeddah and Dammam. The railway has been in the pipeline for a number of years, and was initially launched as a PPP concession. However, it has now been approved for construction using government funds (October 2011) and is expected to go into tender imminently. Whilst rail has overshadowed road investment over the past couple of years, it is noted that around USD1bln in transport projects were announced during the course of 3Q2011.

Saudi Arabia's transport infrastructure must cater for the needs of an expanding population. However, it not only services the Saudi population but also its tourism industry, mainly based around religious pilgrimage. The annual Hajj - the Muslim pilgrimage to Mecca - places intense pressure on the Saudi infrastructure framework, as estimated1.9mln overseas visitors and 500,000 domestic pilgrims make the trip. The kingdom's transport network has also grown around the needs of trade. The country's top five export destinations include the US, Japan, Korea, China and Singapore, while the majority of the country's imports originate from Asian markets, the US and Europe.

Saudi Arabia: Ongoing Transport Projects by Sector (USD Million)

Source: Zawya, KFHR

Saudi Arabia Infrastructure Projects: Sub-Sector Proportion 2.3.1 Airports (% of Total Ongoing Infrastructure Projects) The kingdom has three international airports. The King Abdulaziz International Airport in Jeddah was opened in 1981 and the King Khaled International Airport was opened in 1983. Located 35km north of Riyadh, with a land area of 225 square kilometres (sq km), King Khaled International has two 4,200m runways. The third international airport, the King Fahd International Airport, is located at Dhahran. The King Fahd International Airport has an area of 780sq km, making it the largest airport - by land area - in the world. There are two parallel runways, each measuring 4,000m. The airport has a cargo terminal with an annual capacity of 176,000 tonnes. In addition to the three international airports, there are a further 22 domestic and regional airports in Saudi Arabia, including facilities at Medina, Abha, Jizan, Taif, Tabuk and Qassim. In March 2010, Saudi Arabia's General Authority for Civil Aviation (GACA) pledged USD665.8mln for 34 airport projects in the country. GACA said that these projects would be implemented over four to five years. On completion, 23 airports will have the capacity to handle 9mln

Source: Zawya, KFHR passengers a year. This was in addition to the USD1.37bln allocated in the 2009 budget for airport construction, as part of a total USD5.12bln for transport projects. 2.2 Social infrastructure sector Huge investments into the social infrastructure sector are in the pipeline, in part to appease the populace. Both Saudi Arabia Infrastructure: On-going Airport Projects Project Completion the SAR1.44tln (USD385bln) Ninth Development Plan (2010-2014) and social benefit packages worth a total of Project Name Value (USD) Date USD130bln,announced in response to protests which broke out in 1Q2011, are heavy on social infrastructure GACA – King Abdulaziz International Airport – Phase 1 7,300,000,000 2015 spending. Healthcare and education investments are growing, and the potential for private sector participation is GACA – King Abdulaziz International Airport Development Project – Phase 1 – New 4,000,000,000 4Q2014 increasing. On the other hand, huge social housing projects are in the pipeline, with SAR250bln pledged and Terminal GACA – Prince Mohammed Bin Abdulaziz Airport Expansion 2,400,000,000 2020 500,000 housing units currently in the planning stages. GACA – King Khaled International Airport Expansion 1,500,000,000 2015 GACA – Prince Mohammed Bin Abdulaziz Airport Expansion – Phase 1 1,400,000,000 4Q2015 GACA – King Abdullah Bin Abdulaziz Airport 800,000,000 2017 2.3 Transport sector GACA – King Abdulaziz International Airport – Phase 1 – Aircraft Maintenance 765,000,000 Mar 2015 Transport is also booming, especially rail infrastructure where USD24bln of projects are currently either underway Hangers or in the pipeline. The Haramain High Speed Railway has taken centre stage, with award of the final contract for GACA – King Khaled International Airport Expansion – Terminal 3 Expansion 400,000,000 2015 GACA – King Khaled International Airport Expansion – Terminal 4 Expansion 400,000,000 2015 this project (worth USD1.4bln and awarded to a Spanish consortium) having taken place in July 2011. Attention GACA – King Khaled International Airport Expansion – Terminal 5 400,000,000 2Q 2014 should now turn to the SAR26bln (USD7bln) Saudi Landbridge project, an east-west rail line which will link GACA – King Abdulaziz International Airport – Phase 1 – Airfield Facilities Upgrade 312,867,257 Aug 2013 GACA – King Abdulaziz International Airport – Aprons 160,000,000 2015 Jeddah and Dammam. The railway has been in the pipeline for a number of years, and was initially launched as GACA – Abha Airport 100,000,000 2017 a PPP concession. However, it has now been approved for construction using government funds (October 2011) GACA – King Abdulaziz International Airport Development Project – Phase 1 – 96,000,000 1Q2014 and is expected to go into tender imminently. Whilst rail has overshadowed road investment over the past couple Automated People Mover GAGA – Arar Domestic Airport Expansion 80,000,000 2014 of years, it is noted that around USD1bln in transport projects were announced during the course of 3Q2011. Source: Zawya Projects, KFHR; Data as at 28 June 2013

Saudi Arabia's transport infrastructure must cater for the needs of an expanding population. However, it not only The work includes the development of new airports, the expansion of King Abdulaziz International Airport and services the Saudi population but also its tourism industry, mainly based around religious pilgrimage. The annual modernisation projects at Medina's Prince Mohammed Bin Abdulaziz Airport and Taif Airport. The expansion of Hajj - the Muslim pilgrimage to Mecca - places intense pressure on the Saudi infrastructure framework, as other airports is also in the pipeline, including King Khalid International Airport and several domestic airports. The estimated1.9mln overseas visitors and 500,000 domestic pilgrims make the trip. The kingdom's transport network expansion of King Abdulaziz International Airport (Jeddah International Airport) is by far the largest project has also grown around the needs of trade. The country's top five export destinations include the US, Japan, currently underway in the aviation sector, and one of the largest construction projects in the country. The Korea, China and Singapore, while the majority of the country's imports originate from Asian markets, the US and SAR27bln (USD7.3bln) project involves expanding the airport's annual capacity to 30mln passengers (from Europe. 17mln currently). King Abdulaziz Airport handled around 15mln passengers in 2010, a figure that has grown substantially over recent years as religious tourism has increased. The airport's location as the gateway to Mecca Saudi Arabia: Ongoing Transport Projects by Sector (USD Million) and Medina means that it caters for a substantial influx of passengers during the Hajj. Construction started in January 2011 and is expected to take three years. Saudi Binladin, Saudi Arabia's largest construction company was awarded two contracts for the first phase of the project in November 2010. However, Saudi's tourism industry is very cyclical and largely limited to religious pilgrimage. Furthermore, passenger traffic peaks throughout the five days of Hajj during the 12th and last month of the Islamic calendar. Consequently, with respect to the 690% increase in average passenger traffic during this period, augmented capacity seems sensible; but for the rest of the year it appears redundant. Unless the kingdom can attract more business passengers, position itself as a hub for intercontinental flights or appeal to a wider spectra of tourists, the utilisation rate is likely to be low for large parts of the year.

Source: Zawya, KFHR

2.3.2 Urban Road Networks Saudi Arabia's harsh climate and terrain make the construction of roadways unusually difficult. In spite of this, Saudi Arabia has established a highway network that principally serves the areas of Riyadh (in the centre), Jeddah (to the west) and the eastern coast. Key highways include the -Abu Hadriya- Highway (257km), the Khaybar-al-Ola Highway (175km), the Mecca-Medina Al Munawarah Highway (421km), the - Highway (383km), the -Sedir-al Qasim Highway (317km), the - Highway (750km), and the Taif-Abha-Gizan Highway (750km). The country's total road network is approximately 221,372km in length, of which 47,529km is paved. During 2004- 2009, USD40bln was spent on the construction of roads, with the length of the road network in 2008 measuring three times the length recorded in 1994. There are currently 233 road projects worth USD10bln ongoing in Saudi Arabia.

Saudi Arabia Infrastructure: Ongoing Road Projects Project Name Project Value (USD) Completion Date Saudi Arabia MOI - Saudi Arabia Security Border - Phase 2 2,600,000,000 2016 Saudi Arabia MMRA - Asphalting King Abdallah Province Roads 1,900,000,000 Q3 2014 Saudi Arabia MOT - Rennovation of Qulaiba-Abu Ajram Road 757,000,000 Q2 2015 Saudi Arabia MOT - Batha, Shiba Um Al Zamool Road - Phase 1 170,100,000 Q4 2013 Saudi Arabia MMRA - Fourth Ring Road and Madinah Road Intersection with Jeddah Old Road 170,000,000 Dec 2014 Saudi Arabia MOT - Shuqaiq to Jizan Highway 160,000,000 Oct 2013 RCJY - Ras Al Khair Road - Phase 2 125,000,000 Dec 2014 ADA - Western Section Part A and B King Abdullah Road Upgrade 123,000,000 Mar 2015 Saudi Arabia MOT - Qassim Roads - Group 16 107,000,000 Feb 2015 ADA - Riyadh Eastern part of King Abdallah Road Development (Contract 1) 100,000,000 Dec 2013 Saudi Arabia MOT - Jubail to Al Qassim Expressway Road 97,000,000 Jul 2016 Saudi Arabia MOT - Al Hair to Hutta Dual Carriageway 93,000,000 Oct 2013 Saudi Arabia MOT - Tabouk to Madinah Highway 92,000,000 Q1 2014 Madinah Municipality - Madinah Tunnels and Bridges 88,000,000 Jan 2014 Saudi Arabia MOT - Tabuk Roads - Package 3 80,000,000 Oct 2013 Saudi Arabia MOT - Batha, Shiba Um Al Zamool Road - Phase 2 68,000,000 Q4 2013 Saudi Arabia MOT - King Abdullah Sports City - Jeddah Linking Roads 66,396,348 Jun 2014 Saudi Arabia MOT - Qassim Internal Roads 63,000,000 Q3 2014 Saudi Arabia MOT - Abha - Taif Road - Phase 6 60,508,555 2014 RCJY - Matrifiyah Highway Phase 4 53,000,000 Mar 2015 Saudi Arabia MOT - Eastern Province Main Roads (Group 1) 49,000,000 NA Saudi Arabia MOT - Hail to Madina Dual Carriageway Extension 48,000,000 Jul 2016 Saudi Arabia MOT - Riyadh Roads - Group 20 48,000,000 Q1 2017 RCJY - Royal Commison Building in Yanbu - Infrasturcture 46,000,000 Feb 2014 Saudi Arabia MOT - Hail, Zubara and Hafar Al Batin Road - Phase 1 41,864,000 2014 Saudi Arabia MOT - Asir Roads - Group 20 41,064,000 2014 RCJY - Ras Al Khair Infrastructure 38,000,000 Mar 2015 Saudi arabia MOT - Abu Hadriyah/ Hafr Al Batin/ Rafha Road Refurbishment 37,330,000 H2 2015 Saudi Arabia MOT - Madina to Tabouk Expressway Road - Phase 2 37,330,000 Q4 2014 Saudi Arabia MOT - Northern Borders Roads Rehabilitation - Phase 2 37,065,000 Jan 2016 Saudi Arabia MOT - Al Jamjom to Al Zema Highway 37,000,000 2017 Saudi Arabia MOT - Jazan Coastal Highway Extension - Phase 1 37,000,000 2015 Saudi Arabia MOT - Al Sharqiya Roads Repair 36,000,000 Jul 2013 Saudi Arabia MOT - Jeddah to Makkah Expressway - Phase 1 36,000,000 2014 Saudi Arabia MOT - Yanbu to Al Sharaf Roads Repair 35,000,000 Dec 2015 Saudi Arabia MMRA - Prince Turki Bin Abdulaziz Street - Imam Saoud Bin Abdulaziz Mohammad Street Intersection 34,000,000 2014 Saudi Arabia MOT - Al Kharj to Al Gwayiyyah Dual Carriageway - Phase 2 33,400,000 Jul 2016 Saudi Arabia MOT - Jizan Roads - Group 14 33,065,000 Q4 2015 Saudi Arabia MOT - Al Kharj - Al Qaweyah Road 33,000,000 Aug 2015 ADA - Riyadh Eastern part of King Abdallah Road Development (Contract 2) 32,000,000 Dec 2013 Saudi Arabia MOT - Eastern Province Roads Extension (Group 8) 32,000,000 2015 Saudi Arabia MOT - Riyadh to Baqiq Road 32,000,000 NA Saudi Arabia MMRA - Asphalting Riyadh Roads 31,900,000 Q3 2014 Saudi Arabia MOT - Makkah Roads Extension - Group 25 30,000,000 Q3 2014 Saudi Arabia MOT - Sharma to Tabouk Highway 30,000,000 Q4 2014 Jeddah Municipality - King Fahed and Rawda Road Intersection 28,753,000 Q2 2015 Saudi Arabia MMRA - Prince Saad Bin Abdulrahman Street - Al Shafei Street Intersection 28,000,000 Q4 2013 Source: Zawya Projects, KFHR; Data as at 28 June 2013

2.3.2 Urban Road Networks Saudi Arabia Infrastructure: Ongoing Road Projects (continued) Saudi Arabia's harsh climate and terrain make the construction of roadways unusually difficult. In spite of this, Project Name Project Value (USD) Completion Date Saudi Arabia MOT - Al Jawf Main Roads - Group 1 27,540,000 H1 2016 Saudi Arabia has established a highway network that principally serves the areas of Riyadh (in the centre), Saudi Arabia MOT - Jazan Agricultural Roads - Group 26 27,200,000 Jul 2016 Saudi Arabia MOT - Medina Third Ring Road - Phase 5 27,000,000 Dec 2013 Jeddah (to the west) and the eastern coast. Key highways include the -Abu Hadriya- Highway (257km), the Saudi Arabia MOHE - Al Majmaah University - Phase 2 26,200,000 Q4 2014 Khaybar-al-Ola Highway (175km), the Mecca-Medina Al Munawarah Highway (421km), the - Highway (383km), Saudi Arabia MMRA - Al Madina Road - Al Amal Road Intersection 26,000,000 Q3 2013 Saudi Arabia MOT - Qassim Roads - Group 15 25,865,243 2014 the -Sedir-al Qasim Highway (317km), the - Highway (750km), and the Taif-Abha-Gizan Highway (750km). The ADA - Eastern Ring Road and Al-Oruba Road Intersection Bridge 25,000,000 Jun 2013 country's total road network is approximately 221,372km in length, of which 47,529km is paved. During 2004- Saudi Arabia MOT - Najran - Al Salil Road Improvement - Phase 2 24,532,000 Sep 2014 Saudi Arabia MOT - Madina Roads Extension - Group 17 24,000,000 Jul 2016 2009, USD40bln was spent on the construction of roads, with the length of the road network in 2008 measuring Saudi Arabia MOT - Riyadh Roads Extension - Group 24 24,000,000 Jul 2016 three times the length recorded in 1994. There are currently 233 road projects worth USD10bln ongoing in Saudi Saudi Arabia MMRA - Asphalting Tabouk Villages Roads 23,900,000 2014 Saudi Arabia MOT - Hail Roads - Group 11 23,465,000 2014 Arabia. Saudi Arabia MMRA - Asphalting King Abdallah Province Roads - Phase 2 - Part 2 23,400,000 Q3 2014 Saudi Arabia MOT - Riyadh Roads Extension - Group 19 23,200,000 Dec 2015 Saudi Arabia MOT - Hail to Madina Dual Carriageway 23,000,000 Oct 2013 Saudi Arabia Infrastructure: Ongoing Road Projects Saudi Arabia MOT - Madina Roads Extension - Group 15 22,666,000 2014 Saudi Arabia MOT - Jazan Roads Extension - Group 7 22,500,000 Jul 2016 Project Name Project Value (USD) Completion Date Saudi Arabia MOT - Makkah Road Group 21 22,500,000 Sep 2016 Saudi Arabia MOI - Saudi Arabia Security Border - Phase 2 2,600,000,000 2016 Saudi Arabia MMRA - Asphalting King Abdallah Province Roads - Phase 2 - Part 4 22,300,000 Q3 2014 Saudi Arabia MMRA - Asphalting King Abdallah Province Roads 1,900,000,000 Q3 2014 Saudi Arabia MOT - Al Baha Roads Expansion - Group 13 22,300,000 2014 Saudi Arabia MMRA - Asphalting King Abdallah Province Roads - Phase 2 - Part 1 22,000,000 Q3 2014 Saudi Arabia MOT - Rennovation of Qulaiba-Abu Ajram Road 757,000,000 Q2 2015 Saudi Arabia MMRA - Hizam Road and Taif Alternative Road Underpass 22,000,000 Q4 2014 Saudi Arabia MOT - Batha, Shiba Um Al Zamool Road - Phase 1 170,100,000 Q4 2013 Saudi Arabia MOT - Besha - Al Khrama Dual Carriageway 22,000,000 Q4 2013 Saudi Arabia MMRA - Fourth Ring Road and Madinah Road Intersection with Jeddah Old Road 170,000,000 Dec 2014 Saudi Arabia MOT - Jizan Roads - Package 9 22,000,000 Jun 2014 Saudi Arabia MOT - Shuqaiq to Jizan Highway 160,000,000 Oct 2013 Saudi Arabia MOT - Qassim Roads - Group 10 22,000,000 Nov 2013 Saudi Arabia MOT - Al Kharj to Riyadh/Dammam Highway Dualization Diversion 21,500,000 Jul 2016 RCJY - Ras Al Khair Road - Phase 2 125,000,000 Dec 2014 Saudi Arabia MOT - Jizan Agriculture Roads - Group 24 21,331,600 10 Jan 2014 ADA - Western Section Part A and B King Abdullah Road Upgrade 123,000,000 Mar 2015 Saudi Arabia MMRA - Asphalting South Jeddah 21,200,000 Q4 2013 Saudi Arabia MOT - Qassim Roads - Group 16 107,000,000 Feb 2015 Saudi Arabia MOT - Madina Secondary Roads - Package 1 21,000,000 Feb 2014 Saudi Arabia MOT - Yanbu to Haql Airport Road Rehabilitation 21,000,000 Jul 2013 ADA - Riyadh Eastern part of King Abdallah Road Development (Contract 1) 100,000,000 Dec 2013 Saudi Arabia MMRA - Asphalting King Abdallah Province Roads - Phase 2 - Part 5 20,700,000 Q3 2014 Saudi Arabia MOT - Jubail to Al Qassim Expressway Road 97,000,000 Jul 2016 Saudi Arabia MOT - Makkah Agricultural Roads - Group 13 20,000,000 Q4 2014 Saudi Arabia MOT - Al Hair to Hutta Dual Carriageway 93,000,000 Oct 2013 Saudi Arabia MOT - Rafha/Hail Road - Phase 2 20,000,000 Aug 2013 Saudi Arabia MOT - Tabouk to Madinah Highway 92,000,000 Q1 2014 Saudi Arabia MOT - Riyadh Road Improvement - Phase 1 20,000,000 2014 Saudi Arabia MMRA - Asphalting East Jeddah Roads 19,900,000 2014 Madinah Municipality - Madinah Tunnels and Bridges 88,000,000 Jan 2014 Saudi Arabia MOT - Asir Roads - Group 19 19,732,000 2014 Saudi Arabia MOT - Tabuk Roads - Package 3 80,000,000 Oct 2013 RCJY - Haii Al-Mehan Roads and Infrastructure 19,500,000 Nov 2013 Saudi Arabia MOT - Batha, Shiba Um Al Zamool Road - Phase 2 68,000,000 Q4 2013 Saudi Arabia MMRA - Asphalting Northern Boarders Roads - Package 1 19,400,000 Q2 2015 Saudi Arabia MOT - King Abdullah Sports City - Jeddah Linking Roads 66,396,348 Jun 2014 Saudi Arabia MOT - Northern Borders Roads - Group 6 19,200,000 Jun 2016 Saudi Arabia MOT - Makkah Roads - Group 20 19,000,000 2014 Saudi Arabia MOT - Qassim Internal Roads 63,000,000 Q3 2014 Saudi Arabia MOT - Jazan Roads Refurbishment - Phase 2 18,700,000 2014 Saudi Arabia MOT - Abha - Taif Road - Phase 6 60,508,555 2014 Saudi Arabia MOT - Aqabat Ash Shaar - Muhayil Dual Carriageway 18,667,000 2014 RCJY - Matrifiyah Highway Phase 4 53,000,000 Mar 2015 Saudi Arabia MOT - Al Baha Roads - Group 14 18,666,000 2014 Saudi Arabia MOT - Eastern Province Main Roads (Group 1) 49,000,000 NA Saudi Arabia MOT - Tabouk Road - Phase 7 18,600,000 2016 RCJY - Al Manafeh Road Phase 1 18,000,000 Feb 2014 Saudi Arabia MOT - Hail to Madina Dual Carriageway Extension 48,000,000 Jul 2016 Saudi Arabia MOT - Riyadh Agriculture Roads Group 43 18,000,000 Jun 2015 Saudi Arabia MOT - Riyadh Roads - Group 20 48,000,000 Q1 2017 Saudi Arabia MOT - Hail - Rafhaa Road 17,866,000 2014 RCJY - Royal Commison Building in Yanbu - Infrasturcture 46,000,000 Feb 2014 Saudi Arabia MOT - King Faissal/Prince Fahed Bin Sultan Roads Intersection 17,700,000 Sep 2016 Saudi Arabia MOT - Hail, Zubara and Hafar Al Batin Road - Phase 1 41,864,000 2014 Saudi Arabia MOT - Al Baha Ring Road - Phase 5 17,332,000 2014 Saudi Arabia MOT - Madina Agriculture Roads - Group 13 17,000,000 20 Nov 2013 Saudi Arabia MOT - Asir Roads - Group 20 41,064,000 2014 Saudi Arabia MOT - Riyadh Dual Carriageway 17,000,000 2014 RCJY - Ras Al Khair Infrastructure 38,000,000 Mar 2015 Saudi Arabia MMRA - Asphalting King Abdallah Province Roads - Phase 1 16,900,000 Q3 2014 Saudi arabia MOT - Abu Hadriyah/ Hafr Al Batin/ Rafha Road Refurbishment 37,330,000 H2 2015 Saudi Arabia MOT - Hail Agricultural Roads - Group 15 16,800,000 2015 Saudi Arabia MOT - Madina to Tabouk Expressway Road - Phase 2 37,330,000 Q4 2014 Saudi Arabia MMRA - Asphalting North Jeddah Roads 16,700,000 2014 Saudi Arabia MOT - Najran Agricultural Roads - Group 13 16,700,000 Sep 2016 Saudi Arabia MOT - Northern Borders Roads Rehabilitation - Phase 2 37,065,000 Jan 2016 Saudi Arabia MMRA - Asphalting South Jeddah Roads 16,500,000 2014 Saudi Arabia MOT - Al Jamjom to Al Zema Highway 37,000,000 2017 Saudi Arabia MOT - Riyadh/Damam/Khurais Dual Carriageway - Phase 1 16,340,000 Oct 2014 Saudi Arabia MOT - Jazan Coastal Highway Extension - Phase 1 37,000,000 2015 Saudi Arabia MOHE - Shaqra University - Phase 2 16,000,000 Q4 2014 Saudi Arabia MOT - Al Sharqiya Roads Repair 36,000,000 Jul 2013 Saudi Arabia MOT - Abu Hadriyah, Al Khafji Widening Road - Phase 1 16,000,000 NA Saudi Arabia MOT - Al Baha - Al Hazm Road 16,000,000 2014 Saudi Arabia MOT - Jeddah to Makkah Expressway - Phase 1 36,000,000 2014 Saudi Arabia MOT - Al Kharj to Al Gwayiyyah Carriageway - Phase 1 16,000,000 Jul 2013 Saudi Arabia MOT - Yanbu to Al Sharaf Roads Repair 35,000,000 Dec 2015 Saudi Arabia MOT - Asir Agricultural Roads - Group 16 16,000,000 Nov 2015 Saudi Arabia MMRA - Prince Turki Bin Abdulaziz Street - Imam Saoud Bin Abdulaziz Mohammad Street Intersection 34,000,000 2014 Saudi Arabia MOT - Tabarjal Road 15,800,000 2015 Saudi Arabia MOT - Al Kharj to Al Gwayiyyah Dual Carriageway - Phase 2 33,400,000 Jul 2016 Saudi Arabia MMRA - Asphalting Taif Roads -Group 3 15,400,000 2014 Saudi Arabia MOT - Makkah Roads Extension - Group 27 15,200,000 Dec 2015 Saudi Arabia MOT - Jizan Roads - Group 14 33,065,000 Q4 2015 Saudi Arabia MOT - Hail/Madina Road 15,000,000 Aug 2013 Saudi Arabia MOT - Al Kharj - Al Qaweyah Road 33,000,000 Aug 2015 Saudi Arabia MMRA - Asphalting 2.1 million sq.m. of Hail Roads 14,600,000 2014 ADA - Riyadh Eastern part of King Abdallah Road Development (Contract 2) 32,000,000 Dec 2013 Saudi Arabia MOT - Jazan Dual Carriageways Repair - Group 4 14,000,000 Dec 2015 Saudi Arabia MOT - Eastern Province Roads Extension (Group 8) 32,000,000 2015 Saudi Arabia MOT - Madina Roads Extension - Group 16 14,000,000 Nov 2015 Saudi Arabia MOT - Tabouk Roads - Group 8 14,000,000 Sep 2013 Saudi Arabia MOT - Riyadh to Baqiq Road 32,000,000 NA Saudi Arabia MOT - Dammam/Coastal Al Khobar Road Rehabilitation - Phase 3 13,500,000 Aug 2015 Saudi Arabia MMRA - Asphalting Riyadh Roads 31,900,000 Q3 2014 Saudi Arabia MOT - Hail Secondary Roads - Group 2 13,500,000 Jul 2016 Saudi Arabia MOT - Makkah Roads Extension - Group 25 30,000,000 Q3 2014 Saudi Arabia MOT - Madina Third Ring Road - Phase 6 13,333,000 Q3 2015 Saudi Arabia MOT - Sharma to Tabouk Highway 30,000,000 Q4 2014 Saudi Arabia MOT - Qassim Roads - Group 18 13,330,000 2015 Saudi Arabia MOT - Tabuk to Ras Al Shaikh Hamid Coast Road - Phase 1 13,330,000 NA Jeddah Municipality - King Fahed and Rawda Road Intersection 28,753,000 Q2 2015 Saudi Arabia MOT - Jizan Agriculture Roads - Group 11 12,532,315 10 Jan 2014 Saudi Arabia MMRA - Prince Saad Bin Abdulrahman Street - Al Shafei Street Intersection 28,000,000 Q4 2013 Saudi Arabia MOT - Riyad Dual Carriageway - Phase 1 12,500,000 2016 Source: Zawya Projects, KFHR; Data as at 28 June 2013 Source: Zawya Projects, KFHR; Data as at 28 June 2013

Saudi Arabia Infrastructure: Ongoing Road Projects (continued) Project Name Project Value (USD) Completion Date Saudi Arabia MOT - Qassim Roads Asphalting - Group 1 12,000,000 Q1 2014 Saudi Arabia MOT - Qassim Roads Improvement - Group 1 12,000,000 Q3 2013 Saudi Arabia MOT - Tabouk Road Improvement - Phase 1 12,000,000 2014 Saudi Arabia MOT - Tabouk to Haqil Road Dualization - Phase 1 12,000,000 2014 Saudi Arabia MOT ? Makkah Roads Extension ? Group 22 11,570,000 2015 Saudi Arabia MOT - Dammam/Khafji/King Faisal Roads Intersections 11,500,000 Jul 2016 Jeddah Municipality - Jeddah Municipality Building Wireless Network Infrastructure 11,430,000 2015 Saudi Arabia MMRA - Asphalting Taif Roads -Group 2 11,000,000 2014 Saudi Arabia MOT - Benyan/Khozam Roundabout Dualization 11,000,000 Jul 2016 Saudi Arabia MOT - Hail to Baqa Road Maintenance 11,000,000 Aug 2013 Saudi Arabia MOT - Najran/Sharurah/Al Wadiah Dual Carriageway 11,000,000 Nov 2015 Saudi Arabia MOT - Northern Agricultural Roads - Group 5 11,000,000 2015 Saudi Arabia MMRA - Asphalting Shaqraa, Al Qasab, Marrat, Thadeq and Osheeqr Municpalities Roads 10,900,000 Q3 2014 Saudi Arabia MMRA - Shaqra, Qasab, Morat, Thadeq and Ushaqer roads 10,900,000 Q4 2013 Saudi Arabia MMRA - Asphalting Al Qatif Roads 10,600,000 Q1 2014 Saudi Arabia MMRA - Asphalting Medmej Roads 10,600,000 2014 Saudi Arabia MMRA - Asphalting Najran Municipalities Roads - Phase 2 10,500,000 Q1 2014 Saudi Arabia MOT - Riyadh Agricultural Roads - Group 34 10,000,000 Q4 2013 Saudi Arabia MMRA - Asphalting Buraydah 1 Suburbs 9,830,000 Q3 2015 Saudi Arabia MOT - Rennovation of Al Radifa-Abu Ajram Road Part 3 9,300,000 Q1 2016 Saudi Arabia MMRA - Asphalting Al Jumjum, Asfan and Madrakah Roads 9,000,000 Feb 2015 Saudi Arabia MOT - Hail, Zubara and Hafar Al Batin Road - Phase 2 9,000,000 2014 Saudi Arabia MOT - Najran Roads Extension - Group 11 9,000,000 Jul 2016 Saudi Arabia MMRA - Asphalting Mahayel Roads 8,700,000 Q3 2014 Saudi Arabia MMRA - Zulfi and Al Ghat roads 8,500,000 Q4 2013 Saudi Arabia MMRA - Asphalting Al Ghat and Al Zilfi Municipality Roads 8,400,000 Q3 2014 Jeddah Municipality - King Abdullah Sports City Road 8,290,000 2015 Saudi Arabia MOT - Asfan to Hail Road Extension 8,000,000 2015 Saudi Arabia MOT - Rodom Road 8,000,000 2015 Saudi Arabia MOT - Rowdat Hibas Road 8,000,000 Nov 2013 Saudi Arabia MOT - Tabouk - Sharma Dual Carriageway - Phase 2 8,000,000 Jun 2016 Saudi Arabia MOT - Najran Agricultural Roads - Group 12 7,800,000 Q4 2014 Saudi Arabia MMRA - King Abdallah Road and Omar Bin Abdulaziz Road Intersection - Phase 2 7,100,000 Q1 2014 Saudi Arabia MMRA - Asphalting Najran Region - Phase 2 7,000,000 Q1 2014 Saudi Arabia MOT - Al Jawf Roads - Group 5 7,000,000 Q4 2013 Saudi Arabia MMRA - Asphalting South Riyadh Roads 6,840,000 Q1 2014 Saudi Arabia MMRA - King Abdullah and Taghyeera Road Intersection Phase 2 6,840,000 Q3 2015 Saudi Arabia MMRA - Makkah Mountain Linking Roads 6,666,000 2014 Jeddah Municipality - Asphalting Sidewalks and Lighting Jeddah Municipality 6,500,000 2015 Saudi Arabia MOT - Madina Roads Extension - Group 12 6,500,000 Jul 2014 Jeddah Municipality - Asphalting Jeddah Roads 6,488,000 Q4 2014 Saudi Arabia MOT - Hail to Qana Road Repair 6,400,000 Dec 2015 Saudi Arabia MMRA - Asphalting Khabash, Al Hosayniya and Bi'r Askar Roads 6,000,000 Q1 2014 Saudi Arabia MOT - East Al Sarar Center Road - Phase 1 6,000,000 Aug 2014 Saudi Arabia MOT - Mahabbah Road Extensions - Phase 1 6,000,000 Aug 2016 Saudi Arabia MMRA - Asphalting Shroora and Al Wadeea Roads 5,900,000 Q1 2014 Saudi Arabia MMRA - Asphalting Afif and Badaye Al Adyan Roads 5,800,000 Apr 2014 Saudi Arabia MMRA - Asphalting Jazan Roads 5,700,000 Q3 2014 Saudi Arabia MMRA - Asphalting Tabarjal Roads 5,700,000 Q2 2015 Saudi Arabia MOF - Asphalting Arar to Iraq Road 5,500,000 Q1 2014 Saudi Arabia MMRA - Asphalting Al Qurayyat Roads - Contract 1 5,400,000 Q3 2014 Saudi Arabia MOT - Al Haet Road Extension - Phase 1 5,333,000 2015 Saudi Arabia MOT - Riyadh Agricultural Roads - Group 42 5,100,000 2015 Saudi Arabia MMRA - Asphalting Makkah Villages - Phase 3 5,000,000 2014 Saudi Arabia MOT - Qassim Roads - Group 11 5,000,000 Oct 2013 Saudi Arabia MMRA - King Abdallah and Al Nahda Road Intersection - Phase 2 4,900,000 Q1 2014 Saudi Arabia MOT - Naqah Farms Roads 4,850,000 Jul 2013 Saudi Arabia MOF - Asphalting Roads in Halit Ammar 4,800,000 Jun 2013 Saudi Arabia MMRA - Asphalting Abha - Phase 2 4,700,000 2014 Saudi Arabia MOT - Riyadh Roads Extension - Group 22 4,533,000 2015 Saudi Arabia MMRA - Asphalting Al Qurayyat Roads - Contract 2 4,500,000 Q3 2014 Saudi Arabia MMRA - Asphalting Makkah Mountain Area Roads - Phase 3 4,500,000 2015 Saudi Arabia MMRA - Asphalting Sajr, Al Dawadimi, Al Bajidiya, Nafi, Al Gamash, Aarwa, and Al Sir Roads 4,300,000 Apr 2014 Saudi Arabia MOT - Najran Roads Extension - Group 10 4,270,000 2015 Saudi Arabia MOT - Riyadh Roads - Group 12 4,000,000 Q2 2013 Saudi Arabia MOWE - Tabouk Water Treatment Plant Dual Carriageway 4,000,000 Q4 2013 Source: Zawya Projects, KFHR; Data as at 28 June 2013

Saudi Arabia Infrastructure: Ongoing Road Projects (continued) 2.3.3 Expanding Rail Project Name Project Value (USD) Completion Date There are currently two major railway lines in Saudi Arabia, the first is a core 570km line, which was opened in Saudi Arabia MOT - Qassim Roads Asphalting - Group 1 12,000,000 Q1 2014 1951 and operates between Riyadh and Dammam. In 1985, a second and more direct line linking Riyadh and Saudi Arabia MOT - Qassim Roads Improvement - Group 1 12,000,000 Q3 2013 Saudi Arabia MOT - Tabouk Road Improvement - Phase 1 12,000,000 2014 Hofuf was opened. The kingdom has total track length of 1,392km, which is standard gauge. Major expansion is Saudi Arabia MOT - Tabouk to Haqil Road Dualization - Phase 1 12,000,000 2014 predicted in this sector as the country is to become part of the Gulf Cooperation Council (GCC)'s Gulf Railway Saudi Arabia MOT ? Makkah Roads Extension ? Group 22 11,570,000 2015 Network. The country plans to vastly improve its rail network, with USD25bln of rail projects under development Saudi Arabia MOT - Dammam/Khafji/King Faisal Roads Intersections 11,500,000 Jul 2016 Jeddah Municipality - Jeddah Municipality Building Wireless Network Infrastructure 11,430,000 2015 or at the bidding phase, adding 3,900km of track through three major railway projects. Saudi Arabia MMRA - Asphalting Taif Roads -Group 2 11,000,000 2014 Saudi Arabia MOT - Benyan/Khozam Roundabout Dualization 11,000,000 Jul 2016 Saudi Arabia Railway Plan Network Saudi Arabia MOT - Hail to Baqa Road Maintenance 11,000,000 Aug 2013 Saudi Arabia MOT - Najran/Sharurah/Al Wadiah Dual Carriageway 11,000,000 Nov 2015 Saudi Arabia MOT - Northern Agricultural Roads - Group 5 11,000,000 2015 Saudi Arabia MMRA - Asphalting Shaqraa, Al Qasab, Marrat, Thadeq and Osheeqr Municpalities Roads 10,900,000 Q3 2014 Saudi Arabia MMRA - Shaqra, Qasab, Morat, Thadeq and Ushaqer roads 10,900,000 Q4 2013 Saudi Arabia MMRA - Asphalting Al Qatif Roads 10,600,000 Q1 2014 Saudi Arabia MMRA - Asphalting Medmej Roads 10,600,000 2014 Saudi Arabia MMRA - Asphalting Najran Municipalities Roads - Phase 2 10,500,000 Q1 2014 Saudi Arabia MOT - Riyadh Agricultural Roads - Group 34 10,000,000 Q4 2013 Saudi Arabia MMRA - Asphalting Buraydah 1 Suburbs 9,830,000 Q3 2015 Saudi Arabia MOT - Rennovation of Al Radifa-Abu Ajram Road Part 3 9,300,000 Q1 2016 Saudi Arabia MMRA - Asphalting Al Jumjum, Asfan and Madrakah Roads 9,000,000 Feb 2015 Saudi Arabia MOT - Hail, Zubara and Hafar Al Batin Road - Phase 2 9,000,000 2014 Saudi Arabia MOT - Najran Roads Extension - Group 11 9,000,000 Jul 2016 Saudi Arabia MMRA - Asphalting Mahayel Roads 8,700,000 Q3 2014 Saudi Arabia MMRA - Zulfi and Al Ghat roads 8,500,000 Q4 2013 Saudi Arabia MMRA - Asphalting Al Ghat and Al Zilfi Municipality Roads 8,400,000 Q3 2014 Jeddah Municipality - King Abdullah Sports City Road 8,290,000 2015 Saudi Arabia MOT - Asfan to Hail Road Extension 8,000,000 2015 Saudi Arabia MOT - Rodom Road 8,000,000 2015 Saudi Arabia MOT - Rowdat Hibas Road 8,000,000 Nov 2013 Saudi Arabia MOT - Tabouk - Sharma Dual Carriageway - Phase 2 8,000,000 Jun 2016 Saudi Arabia MOT - Najran Agricultural Roads - Group 12 7,800,000 Q4 2014 Saudi Arabia MMRA - King Abdallah Road and Omar Bin Abdulaziz Road Intersection - Phase 2 7,100,000 Q1 2014 Saudi Arabia MMRA - Asphalting Najran Region - Phase 2 7,000,000 Q1 2014 Saudi Arabia MOT - Al Jawf Roads - Group 5 7,000,000 Q4 2013 Saudi Arabia MMRA - Asphalting South Riyadh Roads 6,840,000 Q1 2014 Saudi Arabia MMRA - King Abdullah and Taghyeera Road Intersection Phase 2 6,840,000 Q3 2015 Source: Saudi Railway Organisation Saudi Arabia MMRA - Makkah Mountain Linking Roads 6,666,000 2014 Jeddah Municipality - Asphalting Sidewalks and Lighting Jeddah Municipality 6,500,000 2015 Saudi Landbridge Saudi Arabia MOT - Madina Roads Extension - Group 12 6,500,000 Jul 2014 The first is the Saudi Landbridge project, a 950km railway connecting Jeddah and Dammam. The railway will link Jeddah Municipality - Asphalting Jeddah Roads 6,488,000 Q4 2014 Saudi Arabia MOT - Hail to Qana Road Repair 6,400,000 Dec 2015 Jeddah with the existing Dammam-Riyadh link, allowing freight to be carried by rail between the Red Sea and the Saudi Arabia MMRA - Asphalting Khabash, Al Hosayniya and Bi'r Askar Roads 6,000,000 Q1 2014 Gulf. Passenger trains running on the track will be designed to travel at 250kph and freight trains at 140kph. In Saudi Arabia MOT - East Al Sarar Center Road - Phase 1 6,000,000 Aug 2014 August 2009, the government announced it would fund the USD7bln railway project itself, transferring the Saudi Arabia MOT - Mahabbah Road Extensions - Phase 1 6,000,000 Aug 2016 Saudi Arabia MMRA - Asphalting Shroora and Al Wadeea Roads 5,900,000 Q1 2014 contract from a build-operate-transfer (BOT) to an engineering, procurement and construction (EPC) contract. Saudi Arabia MMRA - Asphalting Afif and Badaye Al Adyan Roads 5,800,000 Apr 2014 The decision was made after a number of years and a number of rounds of bidding failed to produce a winning Saudi Arabia MMRA - Asphalting Jazan Roads 5,700,000 Q3 2014 consortium. In October 2011, the construction of the Saudi Landbridge was approved by the Council of Ministers. Saudi Arabia MMRA - Asphalting Tabarjal Roads 5,700,000 Q2 2015 Saudi Arabia MOF - Asphalting Arar to Iraq Road 5,500,000 Q1 2014 The approval will see the railway funded through the same channels as the other national rail projects i.e. using Saudi Arabia MMRA - Asphalting Al Qurayyat Roads - Contract 1 5,400,000 Q3 2014 the Public Investment Fund. A tender for the project will be issued from which a contractor will be selected, Saudi Arabia MOT - Al Haet Road Extension - Phase 1 5,333,000 2015 Saudi Arabia MOT - Riyadh Agricultural Roads - Group 42 5,100,000 2015 although no timeline has been announced. Saudi Arabia MMRA - Asphalting Makkah Villages - Phase 3 5,000,000 2014 Saudi Arabia MOT - Qassim Roads - Group 11 5,000,000 Oct 2013 Haramain High - Speed Railway Saudi Arabia MMRA - King Abdallah and Al Nahda Road Intersection - Phase 2 4,900,000 Q1 2014 Saudi Arabia MOT - Naqah Farms Roads 4,850,000 Jul 2013 The second project is the 450km Haramain High-Speed rail link, which will connect Mecca and Medina via Saudi Arabia MOF - Asphalting Roads in Halit Ammar 4,800,000 Jun 2013 Jeddah. In 2008, the government ordered that the project be funded by the finance ministry's Public Investment Saudi Arabia MMRA - Asphalting Abha - Phase 2 4,700,000 2014 Fund. The project is due to begin commissioning by the end of 2012; however, no operational date has been set. Saudi Arabia MOT - Riyadh Roads Extension - Group 22 4,533,000 2015 Saudi Arabia MMRA - Asphalting Al Qurayyat Roads - Contract 2 4,500,000 Q3 2014 The civil works contract (Phase One, Package One), worth SAR6.8bln (USD1.8bln) was awarded in February Saudi Arabia MMRA - Asphalting Makkah Mountain Area Roads - Phase 3 4,500,000 2015 2009 to a consortium including Saudi Arabia's Al-Rajhi Construction Group, Al Arrab Contracting, France's Saudi Arabia MMRA - Asphalting Sajr, Al Dawadimi, Al Bajidiya, Nafi, Al Gamash, Aarwa, and Al Sir Roads 4,300,000 Apr 2014 Alstom and China's Railway Engineering. In February 2011, Phase One, Package Two, a USD2.4bln contract for Saudi Arabia MOT - Najran Roads Extension - Group 10 4,270,000 2015 Saudi Arabia MOT - Riyadh Roads - Group 12 4,000,000 Q2 2013 the construction of four stations, was awarded to Saudi Binladin Group, Yapi Merkezi Group (Mecca/Medina Saudi Arabia MOWE - Tabouk Water Treatment Plant Dual Carriageway 4,000,000 Q4 2013 stations) and Saudi Oger (Jeddah/KAEC). The final, and perhaps most eagerly awaited, contract was for the Source: Zawya Projects, KFHR; Data as at 28 June 2013 USD1.4bln second package - described by the Saudi Railways Organisation as construction of track, signalling,

operation and maintenance for 12 years. The tender was delayed a number of times, owing to the complexity of bids. Two competing bids; the Al Rajhi group (comprising French members including Alstom), and the Al Shuala group (comprising Spanish companies) were vying for the contract. According to recent news reports, the Spanish consortium has been selected, although contracts are yet to be signed. The consortium comprises 11 Spanish companies, including OHL, state-owned rail operator Renfe, Talgo and Adif. According to reports in the FT, the Spanish consortium offered a price that was 30% cheaper than its rival.

North-South Railway The third project is the largest of the three: the 2,400km North-South Railway. The line, estimated to cost SAR20bln (USD5.3bln) has been prioritised owing to its importance in the development of Saudi's industrial base. It will link the country's northern mineral belt with Riyadh and the industrial city of Jubail. The freight rail line is currently under construction and was due to be completed in 2010, although no update has been noted. The contract for the passenger rail line is due to be completed in 2012. The rail link is eventually planned to connect to neighbouring countries as part of the GCC rail link.

In January 2009, a consortium including Saudi Binladin Group and France's Thales was awarded a USD553mln contract for railway signalling and maintenance work on the line. In September 2009, a consortium of China Civil Engineering Construction Corp (CCECC) and Saudi Arabian companies Al Ayuni Trading and Contracting Co and Al Abdulaziz Al Omer Establishment for Trading and Contracting was awarded a SAR2.7bln (USD720mln) contract for the construction of a section of the North-South Railway. The contract pertains to a 500km section of track that links the capital city, Riyadh, with the province of Al Qassim, where the railway travels through Buraidah. According to Gulf News, the contract is for civil works on the line and China Civil Engineering will install the track on this section.

Saudi Arabia Infrastructure: On-going Railway Projects Project Name Project Value (USD) Completion Date SRO – Haramain High-Speed Rail (HHR) 29,100,000,000 1Q2017 SRO – Haramain High-Speed Rail (HHR) – Phase 1 21,100,000,000 Jan 2014 SRO – Haramain High-Speed Rail (HHR) – Phase 1 – Part 1 18,700,000,000 Jan 2014 SRO – Haramain High-Speed Rail (HHR) – Phase 2 8,000,000,000 1Q2017 PIF – Saudi Lanbridge 7,000,000,000 2015 SAR – North-South Railway 3,600,000,000 4Q2015 SRO – Haramain High-Speed Rail (HHR) – Phase 1 – Part 2 2,400,000,000 Jan 2014 SAR – North-South Railway Package 4 725,000,000 4Q2015 SAR – Jubail Railway 500,000,000 2016 SAR – King Khaled International Airport – Railway Station 187,000,000 2Q2015 SAR – Jubail Railway – Phase 1 177,000,000 2015 SRO – Al Ahsa Railway 93,460,000 2014 Source: Zawya Projects, KFHR; Data as at 28 June 2013

2.3.4 Sea Ports There are four major and two minor ports in Saudi Arabia. The largest is the combined Jubail commercial and industrial port, which accounted for 38% of all non-oil related tonnage in 2002, followed by Yanbu industrial and commercial port (25%), Jeddah (22%) and Dammam (13%). Two further ports, Jizan and Duba, account for the remaining 2%. Although port capacity is considered adequate to meet current requirements, refurbishment and improvements are taking place. Operation, maintenance and management of the dock facilities are undertaken by the private sector. Jeddah Islamic Port (JIP) is currently undergoing an expansion project, which will eventually increase capacity by 45%. In December 2009, the first phase of the Red Sea Gateway Terminal (RSGT) was launched at JIP with the facility receiving its first vessel. The RSGT project was due to be fully completed in 3Q2010, with the facility having a 1.8mln twenty-foot equivalent unit (TEU) capacity. The USD510mln project has been developed on 400,000 sq m of reclaimed land and has two berths: a 740m main berth, and a 390m feeder berth. The terminal's draught is 16.5m, although the turning basin has a draught of 18m, which will allow RSGT to cater for vessels with a capacity of 13,000 TEU.

© KFH Research Ltd 14 Saudi Arabia Infrastructure “Projects Galore” operation and maintenance for 12 years. The tender was delayed a number of times, owing to the complexity of Saudi Arabia Infrastructure: On-going Port Projects bids. Two competing bids; the Al Rajhi group (comprising French members including Alstom), and the Al Shuala Project Value Project Name Completion Date group (comprising Spanish companies) were vying for the contract. According to recent news reports, the (USD) SAGIA – King Abdullah Economic City (KAEC) – Phase 1 – Sea Port 26,600,000,000 2020 Spanish consortium has been selected, although contracts are yet to be signed. The consortium comprises 11 MARAFIQ – Yanbu Industrial City – Marine Facilities 210,610,000 Aug 2013 Spanish companies, including OHL, state-owned rail operator Renfe, Talgo and Adif. According to reports in the Aramco – Dareen Port Expansion Project 35,000,000 1Q2014 FT, the Spanish consortium offered a price that was 30% cheaper than its rival. Source: Zawya Projects, KFHR; Data as at 28 June 2013

North-South Railway 3.0 Conclusion and Outlook The third project is the largest of the three: the 2,400km North-South Railway. The line, estimated to cost Among the GCC countries, Saudi Arabia is the largest. It has a land mass and a large and growing local SAR20bln (USD5.3bln) has been prioritised owing to its importance in the development of Saudi's industrial population of 27mln (70% of GCC), which is expected to be double in size by 2050, which means solid domestic base. It will link the country's northern mineral belt with Riyadh and the industrial city of Jubail. The freight rail line demand on goods, services and infrastructure and homes. With 29.6% of the Saudi population under 15 years of is currently under construction and was due to be completed in 2010, although no update has been noted. The age, the Saudi government plan is attempting to redefine its education system (as a part of the King Abdullah contract for the passenger rail line is due to be completed in 2012. The rail link is eventually planned to connect Project for the Development of General Education). By 2015, the government hopes to have built and / or to neighbouring countries as part of the GCC rail link. renovated over 4,000 schools, 50 new technical colleges, 50 higher institutes of technology for women and four

teacher training colleges, in order to increase the schooling capacity to over five million and university capacity to In January 2009, a consortium including Saudi Binladin Group and France's Thales was awarded a USD553mln 1.7 million. contract for railway signalling and maintenance work on the line. In September 2009, a consortium of China Civil

Engineering Construction Corp (CCECC) and Saudi Arabian companies Al Ayuni Trading and Contracting Co To achieve this, the government is developing six new economic cities across the country all requiring extensive and Al Abdulaziz Al Omer Establishment for Trading and Contracting was awarded a SAR2.7bln (USD720mln) new infrastructure. The need for new roads, bridges, housings and other structures is significant and will provide contract for the construction of a section of the North-South Railway. The contract pertains to a 500km section of opportunities for GCC contractors and consultants to participate in their delivery. Healthcare continues to be track that links the capital city, Riyadh, with the province of Al Qassim, where the railway travels through another top government priority with an upgrade to the healthcare facilities across the entire country including Buraidah. According to Gulf News, the contract is for civil works on the line and China Civil Engineering will install new hospitals, social centers, housing for the disabled and criminal rehabilitation centers. the track on this section.

A strong and competitive business environment will increasingly make Saudi Arabia appealing to investors once Saudi Arabia Infrastructure: On-going Railway Projects risk appetite returns to global markets. Additionally, increasing opportunities will draw in contractors who were Project Name Project Value (USD) Completion Date SRO – Haramain High-Speed Rail (HHR) 29,100,000,000 1Q2017 historically focused on markets such as UAE and Europe. The significant volume and size of projects will drive SRO – Haramain High-Speed Rail (HHR) – Phase 1 21,100,000,000 Jan 2014 the increasing presence of multinational firms all eager to take advantage of the abundant opportunities the Saudi SRO – Haramain High-Speed Rail (HHR) – Phase 1 – Part 1 18,700,000,000 Jan 2014 market will present. A major barrier, however, will be the scale and depth of the investment needed to operate SRO – Haramain High-Speed Rail (HHR) – Phase 2 8,000,000,000 1Q2017 PIF – Saudi Lanbridge 7,000,000,000 2015 effectively and the lack of locally based expertise that will adversely affect both multinational and local contractors SAR – North-South Railway 3,600,000,000 4Q2015 alike. SRO – Haramain High-Speed Rail (HHR) – Phase 1 – Part 2 2,400,000,000 Jan 2014 SAR – North-South Railway Package 4 725,000,000 4Q2015 SAR – Jubail Railway 500,000,000 2016 Overall, we expect Saudi Arabia’s construction industry to continue its growth in the next few years with the value SAR – King Khaled International Airport – Railway Station 187,000,000 2Q2015 of projects planned and under way estimated at over USD710bln covering transport infrastructure, utilities SAR – Jubail Railway – Phase 1 177,000,000 2015 SRO – Al Ahsa Railway 93,460,000 2014 infrastructure, education, healthcare and other sectors. Fuelled by strong demographic growth, high oil prices and Source: Zawya Projects, KFHR; Data as at 28 June 2013 a government-backed capital investment program, Saudi Arabia looks to continue its dominance in the region as

the biggest infrastructure/construction market. This continues to give a major boost to the private sectors, 2.3.4 Sea Ports offsetting some of the remaining global economic gloom. We continue to reiterate our positive stance on Saudi There are four major and two minor ports in Saudi Arabia. The largest is the combined Jubail commercial and Arabia’s construction/infrastructure market moving forward. industrial port, which accounted for 38% of all non-oil related tonnage in 2002, followed by Yanbu industrial and commercial port (25%), Jeddah (22%) and Dammam (13%). Two further ports, Jizan and Duba, account for the remaining 2%. Although port capacity is considered adequate to meet current requirements, refurbishment and improvements are taking place. Operation, maintenance and management of the dock facilities are undertaken by the private sector. Jeddah Islamic Port (JIP) is currently undergoing an expansion project, which will eventually increase capacity by 45%. In December 2009, the first phase of the Red Sea Gateway Terminal (RSGT) was launched at JIP with the facility receiving its first vessel. The RSGT project was due to be fully completed in 3Q2010, with the facility having a 1.8mln twenty-foot equivalent unit (TEU) capacity. The

USD510mln project has been developed on 400,000 sq m of reclaimed land and has two berths: a 740m main berth, and a 390m feeder berth. The terminal's draught is 16.5m, although the turning basin has a draught of 18m, which will allow RSGT to cater for vessels with a capacity of 13,000 TEU.

Appendix 1: Saudi Arabia - Development Strategies and Opportunities

The government’s capital spending will form the basis of opportunities for private business. These in turn will be guided by the country’s Ninth Development Plan (NDP), which is worth USD385bln (67% higher than the previous plan) and runs from 2010-14. The NDP, which is prepared by the Ministry of Economy and Planning (MEP), is a general framework for capital spending, and actual capital spending (in terms of the amounts and direction) may well differ from the plan as circumstances change.

Economic resources, which is dominated by utilities, sees its allocation more than doubled and its share of spending rise sharply. This reflects the pressing need to provide enough power and water for a country where demand is increasing by around 8% to 10% per annum. Saudi Electricity Company (SEC) says it is committed to spending USD60bln over the next ten years.

Transport also sees a near doubling of its allocation. Road building continues apace, and will remain a cornerstone of transport policy in the Kingdom, however, rail and ports are also moving up the agenda.

Municipal and Housing services has often been overlooked, but this is likely to become more important over the next five years. First, urbanisation is putting significant pressure on municipal services. Second, as noted above, housing has taken on much greater importance recently. As such, more than the USD26.8bln committed will likely be allocated as the government bids to expand affordable housing. Both housing and municipal services offer good scope for private participation.

Development Plans – Eight Plan vs. Ninth Plan (in Billion) Sector 8th Plan (2005-2009) 9th Plan (2010-14) % Increase Human Resources (Education) 128.0 195.1 52.4 Health 41.1 73.0 75.7 Economic Resources 28.2 60.7 115.1 Transport & Communications 15.1 29.6 96.0 Municipal & Housing Services 17.5 26.8 53.0 Total 229.9 385.2 67.2 Source: Saudi Arabia’s Ministry of Economy & Planning; KFHR

Saudi Arabia: 2004-08 Plan Spending Allocations

Source: Ministry of Economy & Planning; KFHR

Appendix 1: Saudi Arabia - Development Strategies and Opportunities Saudi Arabia: 2004-08 Plan Spending Allocations

Education and health continue to claim large share of spending The biggest single allocation is to education (―human resources‖). This fits with the demographic challenge outlined above and is aimed at all levels of education, with the overall goal of making school leavers and Source: Ministry of Economy & Planning; KFHR graduates more likely to secure jobs in the private sector, although it is notable that its share of spending between the two plans declined. Health is another major area of spending. Its share of spending was increased in Economic diversification is making solid progress and will continue to shape the economy recognition of the Kingdom’s pressing health issues, stemming largely from population growth and the increasing A further broad priority is the effort to diversify the economy. This has been a maxim of all five-year plans, but in prevalence of ―lifestyle‖ diseases. the preamble to the NDP it is put firmly in the context of ―maximising the return on competitive advantages‖.

Saudi Arabia’s comparative advantage lies in hydrocarbons (it has at least 90 years’ worth of oil reserves) and it Economic resources, which is dominated by utilities, sees its allocation more than doubled and its share of makes sense to exploit this by creating greater value-added. Oil refining generates value-added in its own right spending rise sharply. This reflects the pressing need to provide enough power and water for a country where and also opens the door to a variety of industrial products—and jobs—through the petrochemicals product chain. demand is increasing by around 8% to 10% per annum. Saudi Electricity Company (SEC) says it is committed to spending USD60bln over the next ten years. Authorities are keen to support a number of nonoil export sectors

The authorities are also looking to boost the nonoil export sector more broadly in a bid to enhance diversity, Transport also sees a near doubling of its allocation. Road building continues apace, and will remain a reduce vulnerability to external shocks and create a platform for more sustainable and predicable growth. cornerstone of transport policy in the Kingdom, however, rail and ports are also moving up the agenda. Evidence suggests that economies based on a single commodity will become effectively diversified only when

they successfully create a robust quantity and variety of exports and world-wide purchasers for them. The Saudi Municipal and Housing services has often been overlooked, but this is likely to become more important over the authorities have identified a group of second-tier nonoil exports that have shown growth rates of between 8% and next five years. First, urbanisation is putting significant pressure on municipal services. Second, as noted above, 25% during 2004-07. The government believes that these industries are ripe for additional help in terms of housing has taken on much greater importance recently. As such, more than the USD26.8bln committed will offering information on demand in export markets, organising export promotions, providing competitor likely be allocated as the government bids to expand affordable housing. Both housing and municipal services information, technical specifications and packaging requirements of key markets. offer good scope for private participation.

Saudi Arabia: Exports Targeted for Official Support Development Plans – Eight Plan vs. Ninth Plan (in Billion) 1. Agricultural Products th th Sector 8 Plan (2005-2009) 9 Plan (2010-14) % Increase 2. Copper Human Resources (Education) 128.0 195.1 52.4 3. Leather Products Health 41.1 73.0 75.7 4. Various Plastics Economic Resources 28.2 60.7 115.1 5. Paints and Derivatives Transport & Communications 15.1 29.6 96.0 6. Jewellery Municipal & Housing Services 17.5 26.8 53.0 7. Aluminium Total 229.9 385.2 67.2 8. Glass Source: Saudi Arabia’s Ministry of Economy & Planning; KFHR 9. PVC 10. Various Steel Products Saudi Arabia: 2004-08 Plan Spending Allocations 11. Vehicle Spare parts & Accessories Source: Ministry of Economy & Planning

ICT is deemed to be an important sector, though its allocation is small ICT is an important adjunct of the effort to deepen and widen the knowledge-based economy, and has strong potential growth prospects. The Ministry of Economy expects demand for fixed line services to increase by 4.4% a year, while demand for mobile services is expected to climb by 5.6% a year, with the penetration rate reaching about 194% by 2014. Broadband demand is forecast to grow even more briskly, by about 10%, with the number of subscribers climbing from 2mln to 3.25mln by 2014 (total penetration will reach 11.4%, while residential coverage will reach 47.4%).

Source: Ministry of Economy & Planning; KFHR

The government wants to narrow the ―digital divide‖ between the regions. To do this, it has established the Universal Service Fund, which aims to provide full coverage in areas where the market does not provide ICT services. The government also plans to extend broadband networks to all schools, universities, hospitals, government agencies and civil society institutions. Beyond this, it wants to expand ―e-government‖ services and envisages a ―shared role‖ for the private sector in this. ―Various incentives‖ (unspecified) are mooted in the 9th Plan to attract FDI to the ICT sector.

Despite the prominence given to ICT and the Knowledge Economy more generally, financial allocations to ICT under the 9th Plan amount to a comparatively meagre USD239mln, with a far larger amount of USD2.3bln given over to developing the Saudi postal service. This presumably reflects the advanced liberalisation of the ICT sector and the large role envisaged for the private sector, both domestic and foreign.

Housing is now near the top of the economic agenda Indeed, housing has become a critical social (and hence political) issue and we expect the government to devote increasing resources to the problem. King Abdullah made this plain when he pledged, in March 2011, that the government would build 500,000 housing units over an unspecified time period. In fact, the NDP estimated that the number of additional housing units needed during the time frame of the plan is 1.25 million. The Plan identifies an important constraint to an expansion of the housing stock: the provision of buildable land supplied with adequate infrastructure and public services (the Plan estimates that the 1.25 million units will require 350mln sq. metres of land). The Plan notes that such land is at a premium and advocates the ―vertical expansion‖ of cities, and re-development of so-called brownfield land within urban areas, as well as the redevelopment of old residential areas and unplanned settlements.

Health is another ―big ticket‖ area and one where the government is keen to encourage greater private participation: ―the Kingdom clearly supports expansion of the role of the private sector in providing healthcare services‖, according to the NDP. Expatriates are already obliged to have health insurance, and that has spurred considerable competition in an overcrowded sector. The sheer volume of infrastructure projects set to be built over the next five years suggest that demand for expatriates—and associated health insurance—is likely to keep expanding rapidly.

Transport is a big sector which is intimately tied to economic growth Transport is an area that has received a good deal of funding in the NDP. The report acknowledges this, but also says that dependence on public funding should ―be avoided‖, particularly given the inherent volatility of oil revenues. Hence, the sector should be opened up to the private sector by ―liberalising transport markets and promoting competition within them‖ while also ―taking into account the social dimension in the provision of public transport services‖.

Implementation prospects are better than in previous years As with any five year plan in any country, the reality of implementation often differs markedly from the objectives. Saudi Arabia, like many developing countries, has institutional capacity constraints in some areas that might inhibit effective implementation. The Ministry of Economy and Planning’s will have to work hard to ensure that its writ is respected by different government agencies. Yet despite these caveats, we feel that the government as a whole recognises that diversifying the economy, improving infrastructure, and equipping Saudi nationals with the necessary skills are the most appropriate routes to economic sustainability.

The government wants to narrow the ―digital divide‖ between the regions. To do this, it has established the Appendix 2: Top 100 On-going Projects by Highest Value in Saudi Arabia Universal Service Fund, which aims to provide full coverage in areas where the market does not provide ICT Saudi Arabia: On-Going Projects by Highest Project Value Project Name Primary Sector Primary Sub-Sector Project Value (USD) Completion Date services. The government also plans to extend broadband networks to all schools, universities, hospitals, Modon - Sudair Industrial City Real Estate Industrial Zones 40,000,000,000 2028 SRO - Haramain High-Speed Rail (HHR) Infrastructure Railways 29,100,000,000 Q1 2017 government agencies and civil society institutions. Beyond this, it wants to expand ―e-government‖ services and SAGIA - Jazan Economic City Real Estate Free Zones/Economic Zones 27,000,000,000 2037 th SAGIA - King Abdullah Economic City (KAEC) Real Estate Free Zones/Economic Zones 27,000,000,000 2026 envisages a ―shared role‖ for the private sector in this. ―Various incentives‖ (unspecified) are mooted in the 9 SAGIA - King Abdullah Economic City (KAEC) - Phase 1 - Sea Port Infrastructure Ports 26,600,000,000 2020 SRO - Haramain High-Speed Rail (HHR) - Phase 1 Infrastructure Railways 21,100,000,000 Jan 2014 Plan to attract FDI to the ICT sector. KHC - Kingdom City Real Estate Community Development 20,000,000,000 2019 Sadara Chemical Company - Jubail Petrochemicals Complex Petrochemicals Olefins & Aromatics 20,000,000,000 Q4 2015 SRO - Haramain High-Speed Rail (HHR) - Phase 1 - Part 1 Infrastructure Railways 18,700,000,000 Jan 2014 Modon - Jazan Industrial City Real Estate Industrial Zones 17,000,000,000 Q4 2014 Despite the prominence given to ICT and the Knowledge Economy more generally, financial allocations to ICT Makkah Municipality - Makkah Metro Infrastructure Metro 16,530,000,000 2023 th Khuzam Real Estate Company - Qasr Khuzam Real Estate Community Development 13,300,000,000 2014 under the 9 Plan amount to a comparatively meagre USD239mln, with a far larger amount of USD2.3bln given Red Sea Refining Company - Yanbu Export Refinery Oil and Gas Refinery 12,000,000,000 Mar 2015 Saudi Arabia MOI - Saudi Arabia Security Border Infrastructure Other 12,000,000,000 2018 over to developing the Saudi postal service. This presumably reflects the advanced liberalisation of the ICT MAC - Ras Al Zour Aluminum Complex Industry Aluminium 10,800,000,000 Q1 2014 Al-Mozaini Real Estate Investment Company - Riyadh East Sub Center Real Estate Mixed Development 8,000,000,000 2021 sector and the large role envisaged for the private sector, both domestic and foreign. SRAK - Kidan Gas Field Development Oil and Gas Exploration & Production 8,000,000,000 2016 SRO - Haramain High-Speed Rail (HHR) - Phase 2 Infrastructure Railways 8,000,000,000 Q1 2017 PPA - King Abdullah Financial District Real Estate Mixed Development 7,800,000,000 2014 GACA - King Abdulaziz International Airport - Phase 1 Infrastructure Airports 7,300,000,000 2015 ADA - Riyadh Metro Infrastructure Metro 7,000,000,000 2017 Housing is now near the top of the economic agenda Aramco - Jazan Refinery and Terminal Oil and Gas Refinery 7,000,000,000 2017 Aramco/Sumitomo - Rabigh Refining and Petrochemical Complex Expansion Petrochemicals Olefins & Aromatics 7,000,000,000 2016 Indeed, housing has become a critical social (and hence political) issue and we expect the government to devote KEC - Madinah Knowledge Economic City Real Estate Free Zones/Economic Zones 7,000,000,000 2020 PIF - Saudi Landbridge Infrastructure Railways 7,000,000,000 2015 increasing resources to the problem. King Abdullah made this plain when he pledged, in March 2011, that the Sipchem - Sipchem Phase 3 - Jubail Polyolefins Complex Petrochemicals Olefins & Aromatics 7,000,000,000 Dec 2013 MOPM - Waad El Shammal Mining City Real Estate Industrial Zones 6,900,000,000 2015 government would build 500,000 housing units over an unspecified time period. In fact, the NDP estimated that Aramco - Shaybah NGL Recovery Program Oil and Gas NGL 6,000,000,000 Jun 2014 Maaden/Mosaic/Sabic - Umm Waal Phosphate Mine Industry Mining & Metals 6,000,000,000 Q4 2016 the number of additional housing units needed during the time frame of the plan is 1.25 million. The Plan SAGIA - King Abdullah Economic City (KAEC) - Phase 1 - Industrial Zone Real Estate Industrial Zones 6,000,000,000 2023 SEC - PP12 Power and Water Power Generation 6,000,000,000 2015 identifies an important constraint to an expansion of the housing stock: the provision of buildable land supplied JODC - Jabal Omar Development Real Estate Mixed Development 5,500,000,000 H2 2016 Saudi MOH - King Abdullah Medical City Real Estate Healthcare 5,333,200,000 2015 with adequate infrastructure and public services (the Plan estimates that the 1.25 million units will require 350mln Makkah Municipality - Makkah Metro - Phase 1 Infrastructure Metro 5,332,942,292 2020 KJO - Al Khafji Oil Processing Facilities Expansion - Hout Field Offshore Associated Gas Facilities Oil and Gas Processing & Separation 5,000,000,000 Q3 2014 MAC - Ras Al Zour Aluminum Complex - Aluminum Smelter Industry Aluminium 5,000,000,000 Aug 2013 sq. metres of land). The Plan notes that such land is at a premium and advocates the ―vertical expansion‖ of Makkah Municipality - Makkah Metro - Phase 2 Infrastructure Metro 5,000,000,000 2023 SEC - Rabigh IPP Power and Water IPP - Independent Power Provider 5,000,000,000 Q1 2017 cities, and re-development of so-called brownfield land within urban areas, as well as the redevelopment of old SWCC - Ras Al Zour Power and Desalination Plant Power and Water Power Generation 5,000,000,000 Mar 2014 Saudi Arabia Ministry of Endowment - Abraj Al Bait Real Estate Mixed Development 4,800,000,000 Jul 2013 residential areas and unplanned settlements. Aramco - Wasit Gas Development Oil and Gas Exploration & Production 4,600,000,000 Q4 2014 Makkah Municipality - Makkah Metro - Phase 3 Infrastructure Metro 4,600,000,000 2023 Aramco - Integrated Gasification Combined Cycle Power Plant Power and Water Power Generation 4,000,000,000 Q4 2016 Aramco/Dow Chemical - Ras Tanura Gas Plant Oil and Gas Processing & Separation 4,000,000,000 2014 Health is another ―big ticket‖ area and one where the government is keen to encourage greater private GACA - King Abdulaziz International Airport Development Project - Phase 1 - New Terminal Infrastructure Airports 4,000,000,000 Q4 2014 SEC - Rabigh 6 Power Plant Expansion Power and Water Power Generation 4,000,000,000 2014 participation: ―the Kingdom clearly supports expansion of the role of the private sector in providing healthcare SRAK - Kidan Gas Field Development - Gas Processing Facility Oil and Gas Exploration & Production 4,000,000,000 2016 SWCC - Yanbu to Madina Water Transmission System Power and Water Water Transmission & Distribution 3,900,000,000 Q4 2014 services‖, according to the NDP. Expatriates are already obliged to have health insurance, and that has spurred KEMYA - Elastomers Project Petrochemicals Olefins & Aromatics 3,600,000,000 2015 SAR - North-South Railway Infrastructure Railways 3,600,000,000 Q4 2015 considerable competition in an overcrowded sector. The sheer volume of infrastructure projects set to be built Saudi Binladin Group - Jazan Aluminum Smelter Industry Aluminium 3,500,000,000 Q1 2015 SEC - New Jeddah South Power Plant Power and Water Power Generation 3,120,000,000 2015 over the next five years suggest that demand for expatriates—and associated health insurance—is likely to keep Aramco - Ras Tanura Refinery Clean Fuels and Aromatics Oil and Gas Refinery 3,000,000,000 May 2017 Saudi MOI - Riyadh Security Forces Medical City Real Estate Community Development 3,000,000,000 NA expanding rapidly. SEC - Al Qurayyah IPP - Phase 2 Power and Water IPP - Independent Power Provider 2,850,000,000 2015 Ibn Rushd - Yanbu Petrochemicals Complex Expansion Petrochemicals Olefins & Aromatics 2,800,000,000 Oct 2013 Injaz Development Company - Al Marina Real Estate Community Development 2,700,000,000 Q3 2015 Riyadh Municipality - Riyadh Drainage Network Power and Water Water Transmission & Distribution 2,700,000,000 Q1 2014 SSC - Jazan Steel Complex Industry Steel 2,700,000,000 NA Transport is a big sector which is intimately tied to economic growth Rayadah Investment Company - Information Technology and Communication Complex (ITCC) Real Estate Mixed Development 2,600,000,000 2015 Saudi Arabia MOI - Saudi Arabia Security Border - Phase 2 Infrastructure Roads 2,600,000,000 2016 Transport is an area that has received a good deal of funding in the NDP. The report acknowledges this, but SEC - Rabigh IPP - Phase 2 Power and Water IPP - Independent Power Provider 2,600,000,000 Q1 2017 MAC - Ras Al Zour Aluminum Complex - Rolling Mill Industry Aluminium 2,500,000,000 Q4 2013 also says that dependence on public funding should ―be avoided‖, particularly given the inherent volatility of oil Modon - Sudair Industrial City - Phase 1 Real Estate Industrial Zones 2,500,000,000 2015 Tasnee - Metals Smelter Industry Mining & Metals 2,430,000,000 2014 revenues. Hence, the sector should be opened up to the private sector by ―liberalising transport markets and GACA - Prince Mohammed Bin Abdulaziz Airport Expansion Infrastructure Airports 2,400,000,000 2020 SRO - Haramain High-Speed Rail (HHR) - Phase 1 - Part 2 Infrastructure Railways 2,400,000,000 Jan 2014 promoting competition within them‖ while also ―taking into account the social dimension in the provision of public SWCC - Ras Al Zour Power and Desalination Project - Power Plant Package Power and Water Power Generation 2,400,000,000 Q1 2014 Red Sea Refining Company - Yanbu Export Refinery - Gasoline Distiller Package (Package 3) Oil and Gas Refinery 2,300,000,000 Mar 2015 transport services‖. SEC - Al Qurayyah IPP Power and Water IPP - Independent Power Provider 2,200,000,000 Apr 2015 Dar Al Arkan - Shams Al Arous Real Estate Residential 2,000,000,000 Q4 2015 MAC - Ras Al Zour Aluminum Complex - Alumina Refinery Industry Aluminium 2,000,000,000 Q1 2014 Royal Protocol - Jeddah Convention Center Real Estate Commercial 2,000,000,000 2014 SAAC - Jubail Acrylic Acid Plant Petrochemicals Olefins & Aromatics 2,000,000,000 Q3 2013 Implementation prospects are better than in previous years Sadara Chemical Company - Jubail Petrochemicals Complex - Mixed Feed Cracker Petrochemicals Olefins & Aromatics 2,000,000,000 2015 SWCC/Marafiq - Yanbu Power and Desalination plant - Phase 3 Power and Water Power Generation 2,000,000,000 Q4 2014 As with any five year plan in any country, the reality of implementation often differs markedly from the Saudi Arabia MMRA - Asphalting King Abdallah Province Roads Infrastructure Roads 1,900,000,000 Q3 2014 Sadara Chemical Company - Jubail Petrochemicals Complex - Offsites and Utilities Petrochemicals Olefins & Aromatics 1,800,000,000 2015 objectives. Saudi Arabia, like many developing countries, has institutional capacity constraints in some areas that SWCC - Ras Al Zour Power and Desalination Project - Desalination Plant Package Power and Water Water Desalination 1,760,000,000 Q4 2013 Al Shoula - Ajmakan Development Real Estate Community Development 1,600,000,000 Q4 2013 might inhibit effective implementation. The Ministry of Economy and Planning’s will have to work hard to ensure Emaar Middle East - Jeddah Gate Real Estate Mixed Development 1,600,000,000 Q4 2013 GACA- King Khaled International Airport Expansion Infrastructure Airports 1,500,000,000 2015 that its writ is respected by different government agencies. Yet despite these caveats, we feel that the Red Sea Refining Company - Yanbu Export Refinery - Offsite Pipelines Oil and Gas Refinery 1,500,000,000 Q4 2014 Samref - Refinery Revamp Oil and Gas Refinery 1,500,000,000 Q4 2013 government as a whole recognises that diversifying the economy, improving infrastructure, and equipping Saudi SEC - PP10 Power Plant Conversion (Blocks A1, A2, B1, B2 and C1) Power and Water Power Generation 1,435,000,000 Dec 2015 Aramco - Jazan Refinery and Terminal - Tank Farms Oil and Gas Refinery 1,400,000,000 2016 nationals with the necessary skills are the most appropriate routes to economic sustainability. GACA - Prince Mohammed Bin Abdulaziz Airport Expansion - Phase 1 Infrastructure Airports 1,400,000,000 Q4 2015 Saudi Binladin Group - Housing Project 5,000 Villas Real Estate Residential 1,400,000,000 Q4 2013 Sadara Chemical Company - Jubail Petrochemicals Complex - Polyethylene and Specialty Elastomer Facilities Petrochemicals Olefins & Aromatics 1,300,000,000 Q2 2015 SEC - Shuaibah 2 Combined Cycle Power Plant Power and Water Power Generation 1,250,000,000 Q3 2014 KHC - Kingdom Tower Real Estate Mixed Development 1,226,568,544 2017 Aramco/Sumitomo - Rabigh Refining and Petrochemical Complex Expansion - Cumene, Phenol and Cychlohexanone Plants Petrochemicals Olefins & Aromatics 1,200,000,000 Jun 2015 Emaar Middle East - Al Khobar Lakes Development Real Estate Community Development 1,200,000,000 2013 Red Sea Refining Company - Yanbu Export Refinery - Coker Package (Package 1) Oil and Gas Refinery 1,200,000,000 Q4 2014 Red Sea Refining Company - Yanbu Export Refinery - Hydrocracker Package (Package 4) Oil and Gas Refinery 1,200,000,000 Mar 2015 Saudi MOH - King Khalid Medical City Real Estate Healthcare 1,200,000,000 Aug 2017 SWCC - Shuqaiq Water Conveyor Power and Water Water Transmission & Distribution 1,200,000,000 Dec 2013 Saudi Arabia MoH - King Fahad Medical City Expansion Real Estate Healthcare 1,120,974,000 Sep 2015 Aramco - Wasit Gas Development - Arabiyah Offshore Facilities Oil and Gas Exploration & Production 1,100,000,000 Q4 2014 Aramco - Wasit Gas Development - Hasbah Offshore Facilities Oil and Gas Exploration & Production 1,100,000,000 Q4 2014 Source: Zawya Projects; KFHR; Data updated as at 28 June 2013; Note – Projects listed above are the top 100 projects by value

1.0 2013/2014 Macroeconomics Dynamics 3

2.0 Infrastructure/Construction Sector Dynamics 5

2.1 Robust construction/infrastructure spending in 2013 7

2.2 Social Infrastructure sector 8

2.3 Transport sector 8

2.3.1 Airports 9

2.3.2 Urban Road Networks 10

2.3.3 Expanding Rail 13

2.3.4 Sea Ports 14

3.0 Conclusion and Outlook 15

4.0 Appendix 1: Saudi Arabia – Development Strategies and Opportunities 16

5.0 Appendix 2: Top 100 On-going Projects by Highest Value in Saudi Arabia 19 Disclaimer & Disclosure

KFH Research Ltd KDNPP15024/03/2013 (031903) 30 July 2013