In recent years, the Kingdom of Saudi Arabia has undergone remarkable changes across various sectors as part of Vision 2030, which seeks to diversify the economy and establish the Kingdom as an attractive destination for investment.

Among the sectors experiencing profound transformation is the contracting industry, where the Kingdom has launched a series of Giga projects that are reshaping its economic and urban landscape. These initiatives span across smart cities, entertainment hubs, and renewable energy ventures.

In this article, we will highlight the most prominent contracting projects, outlining their objectives and scope, while also shedding light on the legal framework and litigation issues associated with the contracting sector in Saudi Arabia.

NEOM

NEOM is one of the Kingdom's most significant and renowned Giga-construction projects. Valued at $500 billion, the project aims to transform the desert in the Kingdom’s northwest into an innovative, futuristic city spanning over 26,500 square kilometers.

This ambitious city will be fully powered by renewable energy and is envisioned as a new global model for sustainable living. NEOM will feature a floating industrial complex, a global trade hub, commercial ports, advanced facilities, sports venues, diverse entertainment centers, and world-class tourist attractions.

Qiddiya City

Qiddiya City is one of Saudi Arabia’s most ambitious projects, located in the heart of Riyadh. The project aims to establish a massive entertainment city that will serve as the Kingdom’s future capital of entertainment, sports, and culture. Spanning more than 370 square kilometers, Qiddiya is designed to become a vibrant hub for both residents and visitors.

The megacity will feature expansive parks and gardens, art and cultural centers, sports stadiums, adventure venues, and a wide range of entertainment facilities, offering an unparalleled experience.

Beyond its recreational value, Qiddiya City is set to play a key role in the national economy by generating an estimated 325,000 direct and indirect job opportunities. This makes it a cornerstone of Saudi Arabia’s efforts to build a more prosperous, dynamic, and vibrant society under Vision 2030.

The Line

The Line is one of the most groundbreaking cities currently under construction in Saudi Arabia. Stretching over 170 kilometers, this futuristic linear city is designed to revolutionize urban development by prioritizing people and nature over vehicles and infrastructure. Powered entirely by renewable energy, The Line preserves 95% of its surrounding land as a nature reserve, aligning perfectly with the Kingdom’s long-term sustainability goals. With its modern outlook and innovative design, The Line represents a global benchmark for sustainable and human-centric living.

King Salman Energy Park (SPARK)

King Salman Energy Park, known as SPARK, stands out as one of Saudi Arabia’s most advanced industrial projects. Strategically designed to serve as a global energy hub, SPARK connects international markets with the Kingdom’s integrated solutions and services in the energy sector, supporting a wide range of businesses and industries.

Covering nearly 50 square kilometers, the park emphasizes clean and sustainable energy technologies. Notably, SPARK is the first and only industrial city in the world to receive the Leadership in Energy and Environmental Design (LEED) Silver certification, a prestigious recognition of its environmentally friendly and sustainable practices. This makes SPARK not only a cornerstone of Saudi Arabia’s energy strategy but also a model for industrial innovation worldwide.

Contracting Litigation in Saudi Arabia

In reality, the success of these Giga projects relies not only on visionary planning and advanced infrastructure but also on a solid legal framework. A robust legal environment ensures compliance with contracts, protects the rights of project owners, contractors, and stakeholders, and guarantees timely project delivery—all while keeping the process legally sound and transparent.

Below is a brief overview of the litigation landscape in Saudi Arabia’s contracting sector:

1. The Most Common Contracting Disputes

Contracting disputes in Saudi Arabia differ depending on the nature of the disagreement, the contract type, and the circumstances of the contracting parties. The most prominent cases include:

Breach of Contract: Cases involving alterations to project specifications or the use of materials not agreed upon in the contract.

Delay Cases: Disputes arising from the failure to deliver projects within the agreed timeline or delays in financial payments.

Compensation Claims: Cases seeking financial redress for damages caused by halted work, or for losses resulting from delayed delivery.

Quality and Defect Cases: Claims made for defects or quality issues discovered upon project handover.

Termination and Cancellation: Filed when one party ends the contract due to the other’s non-compliance with agreed terms.

Interpretation and Modification: Cases brought forward to clarify ambiguous contract clauses or to modify terms that were not adequately defined or documented.

This legal structure provides assurance that the massive investments in the Kingdom’s contracting sector are safeguarded, while also ensuring fairness and accountability for all parties involved.

2. The Most Important Legal Systems for Contracting Projects in Saudi Arabia

Saudi Arabia’s legal framework is continuously evolving to strengthen the investment climate across all sectors, with special attention to the contracting industry. The most important developments include:

Enhanced Tendering and Contracting Systems: Reforming government procurement processes to ensure transparency and fair competition.

Stricter Safety Standards: Imposing higher safety requirements at construction sites and enforcing fines on violators.

Sustainability and Green Technologies: Introducing regulations that align contracting projects with the Sustainable Development Goals by integrating eco-friendly standards and practices.

Improved Payment Mechanisms: Establishing clear systems to protect contractors’ financial rights and minimize payment delays.

Specialized Contracting Courts: Setting up dedicated courts to expedite the resolution of contracting disputes.

Mandatory Training Programs: Requiring companies to conduct staff training programs aimed at enhancing efficiency, ensuring safety, and improving overall project quality.

These reforms reflect the Kingdom’s commitment to building a robust legal and regulatory environment that not only safeguards rights but also accelerates the success of its giga projects.

3. Judicial Authorities Specialized in Contracting Sector Disputes

Commercial Courts: Handle disputes between contractors or between contractors and suppliers, particularly in matters related to commercial transactions.

General Courts: Consider non-commercial disputes, such as conflicts between individuals and contractors in personal construction projects.

In conclusion, the contracting sector in Saudi Arabia is among the most vital pillars of the Kingdom’s economy. The giga projects currently underway are not only building cities, infrastructure, and world-class developments, but also fostering a legal environment that safeguards investments and encourages innovation and growth in line with Vision 2030.

For professionals working in the contracting field, it is crucial to consult with a lawyer specializing in contracting disputes. A legal expert ensures that the other party complies with Saudi regulations, drafts precise contracts, and protects both financial and legal rights.

If you require advice or assistance in litigation related to the contracting sector in Saudi Arabia, do not hesitate to contact us at the Mohammed Al-Khliwi Law Firm. We will handle the process for you and streamline all pending procedures.

Disclaimer: This content is not legal advice. No liability is assumed. For legal consultation, please contact us.