Sreco subsidiary awards 1.1bn riyal infrastructure contract

Al Widyan Real Estate Company, a fully owned unit of Al Akaria Saudi Real Estate Company (Sreco), awarded a 1.1 billion Saudi riyals (Dh1.08bn) contract to Binyah for the infrastructure development of its mega-project in the kingdom.

Binyah is a joint venture between Sreco and Mohammad Ali Al Swailem Group, that own 60 per cent and 40 per cent of the JV, respectively.

The contract covers all of the infrastructure, including road and electricity networks, cooling and communications and drain systems, Sreco, said in a statement to Saudi Stock Exchange. The work includes the construction of 80km of roads, a 275km electrical cables network and about 200km of irrigation system within the master development.

The project “is a massive undertaking, said Abdulrahman Almofadhi, chairman of Sreco. It is expected to generate 2,000 jobs for a large proportion of Saudi nationals, he added.

Sreco, in which the kingdom’s Public Investment Fund has a 65 per cent stake, plans to build the mixed-use city at a cost of 10bn riyals for the first phase. The company has established a fully-owned subsidiary called Al Widyan Holding, which will be responsible for developing the city that will span 7 million square metres of land. Al Widyan will be the first private real estate project in the kingdom granted the status of a self-regulating authority, or Self-Regulatory Office, which is similar to a commercial free zone in other Arabian Gulf countries.

Such a status de-risks the project for investors, fast tracks permit services and removes other bureaucratic processes, Sreco said.

Saudi Arabia Vision 2030 economic diversification strategy presents opportunities for public and private real estate companies to develop new projects to modernise the kingdom.

The government aims to increase Saudi home ownership to 70 per cent by 2030, from the current 47 per cent.