Dive Brief:
- The Saudi Arabia government has awarded Bechtel a major contract to support the country's National Project Management Office (NPMO) in its effort to efficiently administer an estimated $1 trillion worth of capital projects as part of its Vision 2030 plan, according to Construction Week Online.
- The Saudi government stopped infrastructure spending in the third quarter of 2016 due to fears that it had squandered $80 billion to $100 billion a year through inefficiencies in its procurement processes.
- Bechtel has a 70-year history in Saudi Arabia and has been instrumental in its Jubail initiative, a 40-year project that has seen the development of a major industrial port city emerge from what was once a fishing village.
Dive Insight:
Bechtel won the NMPO contract over competitors including Fluor, AECOM and CH2M in a bid process announced last July. At the time, the general perception of Saudi Arabia was that of a country in cost-cutting mode in order to make up for the huge drops in oil prices and to help counteract a projected 2016 budget shortfall. Bechtel's decades-long construction and engineering history in Saudi Arabia certainly weighed in its favor during the bid evaluations.
In June of last year, Bechtel renewed its contract fir the Jubail city project for five years. The city is widely hailed as the biggest industrial development in the world at 250,000 acres. The project has 140,000 workers in its petrochemical and industrial plants, harbor and port. Officials said the next phase of the project will focus on residential and educational initiatives. One of the biggest projects will be a "greenfield" university that can accommodate 18,000 students. Also in the works for Jubail are medical complexes and the necessary infrastructure for new development.
In the U.S., Bechtel is scheduled to start construction soon on the $1.6 billion Cricket Valley Energy gas-fired power plant in Dover, NY. The energy company awarded Bechtel the contract back in 2015, but progress has been stalled due to regulatory issues. The 1,100-megawatt combined-cycle plant should be complete in 2020.
Bechtel's and other American contractors' foreign-derived income fell 21.1% to $49.79 billion in 2015, according to Engineering New-Record, but new CEO Brendan Bechtel said "smart and disciplined" contractors can still find opportunities in the international market. Brendan Bechtel, the company's current president and COO, represents the fifth-generation of Bechtels to serve as CEO.