Saudi Red Sea and Amaala projects set to award contracts worth $2.7 billion

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Saudi Arabia’s two flagship giga projects, the Red Sea Project and Amaala, have nearly 10 billion Saudi riyals ($2.7 billion) worth of contracts at the tender stage, according to the CEO of both projects.

“We currently have probably close to 10 billion riyals worth of contracts in the market at the tender stage. Over the next 12-18 months, we need to award 1 billion riyals ($267 million) per month. between the Red Sea and Amaala to stay on track,” John Pagano told Zawya Projects.

Last week, Zawya Projects announced that Saudi Arabia’s Public Investment Fund (PIF) had combined the two gigaprojects, with the Red Sea Development Company (TRSDC) taking control of Amaala under a single new entity, which will soon be known as Red Sea Global.

Both projects are part of the Saudi Vision 2030.

From a funding perspective, the PIF has committed approximately $15-16 billion to the Red Sea project. In January 2022, TRSDC announced the financial close of a 14.12 billion riyals ($3.76 billion) loan from four Saudi banks. The financing will take the form of a term loan facility and a revolving credit facility.

“So from a financial standpoint, we got all the equity we needed from the PIF and we got the money,” Pagano said, adding that IPO talks are in three at four years old.

“Right now we need to open and stabilize the first phase to consider an IPO. So the earliest date would be around 2025 or 2026, but that may not be the only option because there are many different routes that we might consider,” he said.

During this time, the focus is on ensuring that tenders and awards stay on track to ensure the project meets construction deadlines.

On May 16, Mammoet, a world leader in heavy lifting and transport, won a contract from TRSDC to transport and install 73 pre-engineered villas at Sheybarah Island Resort, part of The Red Sea project.

“About 14 of the more than 70 stainless steel floating water villas are fully erected,” said Pagano, who added that four more are under construction.

He also revealed that TRSDC will partner with major hotel brands to operate resorts in the first phase, which is expected to be completed in 2023. The first phase includes 16 luxury hotels offering 3,000 keys across five islands and two locations inland, according to earlier statements from the developer.

On Wednesday, May 25, TRSDC announced that it had signed management agreements with new international hotel brands – Ritz Carlton Reserve, Miraval Hotels and Rosewood to operate resorts in the first phase, bringing the total number of confirmed hotel brands to 12.

“We have at least two more underway on the Red Sea and many more on Amaala as well,” he said.

Pagano also added that the Red Sea project hopes to get its airside license this year. “We have started construction of the terminal. We are also building a temporary terminal to serve as a modest facility when we open our first resorts early next year,” he said.

“It will also serve as a seaplane terminal so that we can establish a new seaplane business, which will provide transport from the airport to some of our outer islands,” he concluded.

(Reporting by Sona Nambiar; Editing by Anoop Menon)

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