Saudi Construction Activity Surges Despite PIF's Reduced Role

The number of construction contracts awarded in Saudi Arabia has surged this year, even as the Public Investment Fund (PIF) has taken a less active role as a client. Contractor awards jumped 82 percent year on year in the first six months of 2026, despite the Iran war, according to Scavo, the project-tracking platform run by the Saudi Contractors Authority. The data, presented at the Big 5 Construct Saudi conference in Riyadh this week, shows how the country’s construction pipeline is becoming less reliant on the PIF, which is reining in spending on some giga-projects and seeking greater participation from private investors. The sovereign wealth fund had been the chief driver of large-scale growth in the kingdom in recent years, but it ranked fifth by value among clients announcing projects in the first half of 2026. Adel Real Estate, the Royal Commission for Makkah City and Holy Sites, Al-Ittihad Club Company and the Royal Commission for Riyadh City occupied the first four places. Scavo’s own earlier forecast for 2026 had put PIF in the No 1 slot. The single largest award was Amaya, a $4 billion Jeddah tower for the Trump Organization and developer Dar Global. The $3 billion runway extension at King Salman International Airport in Riyadh ranked second – the PIF’s only project in Scavo’s top 10 for H1 2026. Changes have been underway at the PIF for some time. At the end of 2024 it cut funding across the companies running its project portfolio. In February this year, Saudi Arabia’s former investment minister was replaced within days of suggesting some giga-projects be deprioritised. Last week a new chief executive was appointed at the New Murabba giga-project. PIF’s 2026-30 strategy, published in August, includes no mention of The Line or Trojena, the flagship Neom developments on which billions have been spent, committing instead to “a clear and expanding role for the private sector”. Building contractor awards almost doubled to $32 billion in the first half of 2026, up from $17 billion a year earlier, the Scavo figures show. Infrastructure nearly doubled too, to $7 billion. Power and water awards fell by almost 60 percent to $5 billion – though Mahmoud Hasan from Scavo said this reflected a reallocation, rather than a sign of broader trouble. Statistics for PIF’s share of contractor awards, which include the Diriyah, Roshn, Qiddiya and Rua Al Madinah units, show it accounted for 65 percent of the total in April this year – driven by a single $2.06 billion Rua Al Madinah contract. This fell below 5 percent in June. PIF did not immediately respond to AGBI’s request for comment. Analysts had expected PIF’s giga-projects to remain the resilient part of Saudi Arabia’s construction pipeline. “Investment tied to state-backed contracts or large infrastructure programmes is generally more resilient,” said Héla Miniaoui, an associate professor at Qatar’s Lusail University, told AGBI earlier this year. “The more vulnerable category is discretionary greenfield investment, where firms have greater flexibility to delay or redirect. That is where I would expect the near-term slowdown to show up first.”