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.


Alvarez & Marsal opens regional headquarters in Riyadh 

Updated 33 min 24 sec ago
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Alvarez & Marsal opens regional headquarters in Riyadh 

RIYADH: Underscoring international confidence in the Saudi economy, global consulting firm Alvarez & Marsal has become yet another company to have opened its regional headquarters in Riyadh.

In a press statement, the US firm stated that the inauguration of the new regional headquarters underscores its commitment to contributing to the country’s transformation agenda. 

“As the company continues to deepen its roots in the country, with expertise across various sectors — from banking and tax to healthcare and disputes and investigations — this strategic move aims to leverage local insights in the Kingdom to drive sustainable growth and innovation.” the company said. 

Additionally, A&M announced that it has included 13 skilled Saudi graduates in the inaugural batch of its Bidayah Graduate Program. 

The company stated that these candidates were selected from a competitive pool of applicants, describing the chosen individuals as representing the bright future of the Kingdom and reflecting the potential that A&M sees in local talent. 

James Dervin, managing director of A&M in the Middle East and co-head in the region, stated that the program is designed to develop the next generation of execution-focused leaders in management consulting. It is guided by the A&M principles of leadership, action, and results. 

“Over the course of 12 months, participants will undergo rigorous training, engage in live project work, and receive mentorship from seasoned industry experts,” he said. 

Dervin added: “Coupled with the incorporation of our regional headquarters in Saudi Arabia, the program underscores A&M’s commitment to investing in the professional development of Saudi nationals and aligning with the Kingdom’s ambitious Vision 2030,” 

He further noted that the new graduates will have a significant, positive impact on his firm and the clients it serves. 

Commenting on the close alignment of A&M’s global brand with the local market dynamic in Saudi Arabia, Bryan Marsal, A&M’s CEO and co-founder, said: “The all-encompassing nature of the Saudi Arabian transformation is driving significant demand for A&M’s distinctive ‘get-stuff-done’ brand of services — for our ability to fix problems, our ‘skin in the game’, and our freedom from audit conflicts.” 

With over 9,000-strong workforce across six continents, A&M generates tangible results for corporations, boards, private equity firms, law firms, and government agencies grappling with intricate challenges, according to its website. 

More than 180 major global companies and organizations have already established regional headquarters in the Saudi capital. These include Apple, Microsoft and Alibaba, as well as the IMF, IBM, and Google.  

Other notable entities on the list include German consultancy firm TUV Rheinland, PwC Middle East, Aramex and Amazon. 


UAE banks’ aggregate capital, reserves exceed $136bn

Updated 47 min ago
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UAE banks’ aggregate capital, reserves exceed $136bn

RIYADH: UAE-based banks’ aggregate capital and reserves reached 501.5 billion dirhams ($136 billion) at the end of February, up 14.4 percent year-on-year, according to new data. 

The latest statistics from the Central Bank of the UAE showed that on a monthly basis, the total capital and reserves grew 0.95 percent, reflecting an increase of approximately 4.7 billion dirhams, according to the Emirates News Agency, also known as WAM. 

This rise in figures falls in line with the central bank’s goal of enhancing monetary and financial stability in the country. 

Moreover, the data indicated that national banks accounted for around 86.5 percent of the aggregate capital and reserves of banks operating in the UAE. At the end of February, they recorded a total of 433.7 billion dirhams, an annual rise of 14.6 percent.

On the other hand, the share of foreign banks settled at 13.5 percent, hitting 67.8 billion dirhams at the end of the same month, reflecting a 13.2 percent surge compared to the same period a year earlier.  

Furthermore, at the end of February, the total capital and reserves of banks operating in Dubai alone stood at 246.4 billion dirhams, logging a year-on-year growth of 15.1 percent. 

Additionally, banks operating in Abu Dhabi recorded around 217 billion dirhams, up 13 percent from the corresponding period in 2023.  

Meanwhile, the cumulative capital and reserves of banks operating in other emirates combined reached an estimated 38.1 billion, reflecting a 15.5 percent climb in comparison to the same period a year prior. 

In March, a top executive at Roland Berger said that UAE bank branches were witnessing the highest revenues in the region, amounting to $18.6 million per branch.

This was driven by the nation’s digital transformation, which enabled financial institutions in the Gulf Cooperation Council to reduce the number of banking branches by 328 within three years, Saumitra Sehgal, the global consulting firm’s head of financial services in the Middle East, told WAM, at the time.  

Sehgal also pointed out at the time that the number of bank branches across GCC nations decreased from 4,067 at the end of 2019 to 3,739 by December 2022.   

He further noted that banks in the UAE saw the highest number of outlets merge and reduce with the support of digital transformation between 2019 and 2022.


Saudi financial robo-advisory firm Abyan Capital secures $18m in funding  

Updated 55 min 10 sec ago
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Saudi financial robo-advisory firm Abyan Capital secures $18m in funding  

RIYADH: Financial robo-advisory firm Abyan Capital has secured $18 million in funding in further evidence of the growing confidence in the Kingdom’s artificial intelligence sector.

Led by STV, the funding round also saw participation from Aramco’s Wa’ed Ventures and RZM Investment. 

Robo-advisors are digital platforms that utilize AI and machine learning algorithms to automate and optimize investment processes.  

Founded in 2022 by Abdullah Al-Jeraiwi, Omar Al-Mania and Saleh Al-Aqeel, Abyan Capital is a financial services company that provides an automated solution and portfolio management for long-term investments.  

“Abyan Capital stands out by unlocking the SR300 billion ($80 billion) investment management and wealth advisory sector for investors from all backgrounds in Saudi Arabia, through its mobile-first, robo-advisory model,” Yazeed Al-Turki, principal at STV, said in a statement.  

In a short period of time, he said Abyan has enabled a large base of first-time investors to access multiple wealth management solutions, underscoring the team’s commitment to innovation and inclusivity.  

“We are delighted to partner with Abdullah, Saleh and the team on their journey to redefine the wealth management ecosystem in the Kingdom,” Al-Turki added.  

The company aims to utilize its newly secured funds to further enhance its platform, expand its suite of financial products, and accelerate its market penetration across the investment solution value chain.

“Today, we are proud that in a very short amount of time, Abyan has exceeded deposits of over SR1.4 billion and more than 100,000 portfolios invested. And we will be launching new diversified products soon with a goal to make Abyan the digital retail investment house,” said Al-Jeraiwi, the CEO. 


Closing Bell: TASI ends the week in green at 12,352

Updated 02 May 2024
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Closing Bell: TASI ends the week in green at 12,352

RIYADH: Saudi Arabia’s Tadawul All Share Index ended the week by gaining 6.68 points, or 0.05 percent, to close at 12,352.33 on Thursday.

The total trading turnover of the benchmark index was SR6.55 billion ($1.74 billion) as 120 stocks advanced, while 103 retreated.   

The parallel market, Nomu, also gained 95.60 points, or 0.36 percent, to close the trading session at 26,457.81. This comes as 29 stocks advanced, while as many as 27 retreated.

On the other hand, the MSCI Tadawul Index slipped by 2.37 points, or 0.15 percent, to close at 1,547.20.

The best-performing stock on the benchmark index was Al-Baha Investment and Development Co., as its share price surged by 7.69 percent.

Other top performers included Raydan Food Co. and the Company for Cooperative Insurance, whose share prices soared by 7.29 percent and 6.63 percent, to stand at SR30.90 and SR160.80 respectively.

Electrical Industries Co. and the Mediterranean and Gulf Insurance and Reinsurance Co. also fared well during the last trading session of the week.

The worst performer was Saudi Chemical Co., whose share price dropped by 5.36 percent to SR7.77.

Power and Water Utility Co. for Jubail and Yanbu as well as the National Company for Glass Industries, underperformed as their share prices dropped by 5.22 percent and 4.82 percent to stand at SR63.50 and SR42.45, respectively.

On the announcements, Bank AlJazira announced its interim financial results for the period ending March 31 with net profit amounting to SR300.4 million compared to SR279.3 million in the previous quarter.

In an official statement on Tadawul, the bank attributed the increase in the net income to a decrease in total operating expenses by 6 percent. 

“The decrease in total operating expenses is mainly due a decrease in net impairment charge for financing and other financial assets, other general and administrative expenses, salaries and employee-related expenses and other operating expenses against an increase in depreciation and amortization expenses,” the statement said.

Conversely, there has been a slight decrease of 0.2 percent in total operating income, primarily attributed to a reduction in net financing and investment gains. Additionally, the rise in net income was partially tempered by increased zakat charges over the period.


GCC central banks hold interest rates steady for 6th time following Fed’s move 

Updated 02 May 2024
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GCC central banks hold interest rates steady for 6th time following Fed’s move 

RIYADH: Gulf Cooperation Council central banks have held interest rates steady for the sixth time as the US Federal Reserve keeps its benchmark level between 5.25 percent and 5.50 percent.    

As most currencies in the region are pegged to the US dollar, monetary policy follows the decisions taken in Washington, with policymakers opting to lock the rate at the level it has been since July.  

The freeze comes as the rate-setting panel cites “a lack of further progress toward the committee’s 2 percent inflation objective.”   

Vijay Valecha, chief investment officer at Century Financial, told Arab News: “This decision marks the sixth consecutive time that the central bank has chosen to keep rates unchanged. Market expectations have adjusted, now forecasting only one rate cut by year-end compared to the six anticipated at the beginning of 2024.”  

He added: “The monetary policies of most central banks in the GCC countries, including the UAE, Saudi Arabia, Bahrain, Oman, and Qatar, typically mirror those of the Fed due to their currencies being pegged to the US dollar. Kuwait is the exception in the bloc, as its dinar is linked to a basket of currencies.”  

Valecha continued by stating that as a result, interest rates in GCC markets are also anticipated to remain stable in the near future, which bodes well for the profitability of GCC banks. 

This decision implies that the Saudi Central Bank, also known as SAMA, will maintain its repo rates at the current level of 6 percent.    

The UAE central bank, along with Kuwait, Qatar, Oman, and Bahrain, also mirrored the Fed’s move. 

Repo rates, which represent a form of short-term borrowing primarily involving government securities, underscore the close economic ties and financial dynamics between the GCC countries and the global economic landscape, particularly the US.          

The US central bank also stated that it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”  

This indicates that rate cuts are not on the cards anytime soon, until inflation cools down and moves sustainably toward the 2 percent target set by the US Fed.