Saudi Arabia’s two flagship giga projects, The Red Sea project and Amaala, have close to 10 billion Saudi riyals ($2.7 billion) worth of contracts in the bid stage, according to the CEO of both projects.
“We currently got probably close to 10 billion riyals worth of contracts out in the marketplace in the bid stage. Over the next 12 to 18 months, we need to be awarding a billion riyals ($267 million) a month between Red Sea and Amaala to stay on track,” John Pagano told Zawya Projects.
Last week, Zawya Projects reported that Saudi Arabia’s Public Investment Fund (PIF) has combined the two giga projects, with The Red Sea Development Company (TRSDC) taking over Amaala under a single new entity, which will be soon known as Red Sea Global.
Both projects are part of the Saudi Vision 2030.
From a financing standpoint, the PIF has committed about $15 to $16 billion to The Red Sea Project. In January 2022, TRSDC announced the financial closure of a 14.12 billion riyals ($3.76 billion) loan with four Saudi banks. The financing will be in the form of a term loan facility and a revolving credit facility.
“So, from a financing point of view, we got all the equity that we needed from PIF and we got the cash,” said Pagano, adding that talks about IPO is three to four years away.
“Right now, we need to open and stabilise 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 as there are many different routes that we could consider,” he said.
Meanwhile, the focus is on ensuring tenders and awards stay on track to make sure the project meets construction deadlines.
On 16 May, Mammoet, a global leader in engineered heavy lifting and transport was awarded a contract by TRSDC to transport and install 73 prefabricated villas at the Sheybarah Island Resort, a part of The Red Sea project.
“Around 14 of the 70+ stainless steel floating water villas are fully erected,” said Pagano, who added that another four are being partially done.
He also disclosed that TRSDC will partner with major hospitality brands to operate resorts in the first phase, which is set to complete in 2023. The first phase includes 16 luxury hotels offering 3,000 keys across five islands and two inland locations, according to past statements by the developer.
On Wednesday, 25 May, TRSDC announced that it has signed management agreements with new international hotel brands - Ritz Carlton Reserve, Miraval hotels and Rosewood to operate resorts in the first phase, taking the total of hospitality brands confirmed to 12.
“We have got at least another two in the works on the Red Sea and numerous ones on Amaala as well,” he said.
Pagano also added that The Red Sea project hoped to get its airside license this year. “We have started construction on the terminal building. We are also building a temporary terminal building to cater as a modest facility when we open our first resorts at the beginning of next year,” he said.
“It will also serve as the seaplane terminal so that we can set up 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)