x Abu Dhabi, UAEThursday 27 July 2017

Arabtec secures $107m Riyadh hospital contract

Arabtec has won an order to build a hospital in Riyadh as it grows its construction footprint in the kingdom.

Arabtec says its existing order book is worth Dh21 billion, with Saudi contracts becoming a key business driver. Jeffrey E Biteng / The National
Arabtec says its existing order book is worth Dh21 billion, with Saudi contracts becoming a key business driver. Jeffrey E Biteng / The National

Arabtec has won a US$107 million contract to build a 105-bed hospital in Riyadh as it seeks a bigger slice of Saudi Arabia's burgeoning construction market.

The contractor won the order to build the Aldara Hospital and Medical Centre in a joint venture with Greece's Terna.

Arabtec has a 60 per cent share in the venture.

"Saudi Arabia is rapidly developing its social and physical infrastructure, and we believe there is a strong opportunity for Arabtec to participate in construction projects in the kingdom such as hospitals, schools and transportation," said the Arabtec Holding chief executive, Hasan Abdullah Ismaik.

The contractor that helped build Burj Khalifa has increased its profile since Abu Dhabi's Aabar investment fund started acquiring its stock last year. Aabar currently owns more than 21 per cent of the shares.

Next month Arabtec will start a Dh2.38 billion rights issue, part of a wider five-year plan to raise as much as Dh4.7bn and extend its regional footprint while also diversifying from house building into larger and more complex projects in the oil and gas sector.

Arabtec says its existing order book is worth Dh21bn, with Saudi contracts becoming a key business driver.

Joint ventures are also emerging as an important part of the contractor's growth strategy as it looks beyond the UAE.

It signed an initial agreement to form a joint venture with Samsung Engineering in April to undertake large-scale oil and gas, power and infrastructure projects in the Middle East and North Africa.

Arabtec will also hold a 60 per cent share in that partnership.

Some $136bn in construction projects are expected to be awarded in Saudi Arabia this year, making the kingdom the main target for contractors and consultants, Deloitte said in its GCC Powers of Construction report released this month. It predicted more joint ventures between local players and international groups to tackle the large-scale and complex projects emerging in the kingdom.

 

scronin@thenational.ae