UK-headquartered HKA has decades of experience in Saudi Arabia and in early 2024, the global consultancy strengthened its commitment to the Kingdom by securing its Regional Headquarters (RHQ) License. The move positioned HKA as amongst the first major international consultancies to gain regional HQ status under the programme, enabling the firm to conduct business with Saudi state bodies and benefit from certain tax incentives.
Even prior to acquiring RHQ status, HKA already had strong ties to the Kingdom, with its Riyadh and Jeddah offices supporting Saudi clients and capital projects for over two decades. Talking to Jason Saundalkar, Head of Content at Middle East Consultant, Tim Whealy, Partner at HKA said that today the firm continues to deliver services to a variety of clients, and notes that the company’s business has grown, and evolved, since it opened its RHQ.
“Historically we’ve done a huge amount of work with contractors, but since we opened our RHQ in the Kingdom roughly two years ago, we also began doing a lot of work with various government entities. We now regularly work with ministries, PIF companies and many of the Kingdom’s giga projects. We’re involved with government organisations, asset owners (employers) and companies across the construction supply chain, and have to manage our conflicts very carefully,” says Whealy.
Over the 2024-2025 period, the Kingdom continued working on diversifying its economy away from hydrocarbons in line with the goals of Saudi Vision 2030. Since Vision 2030 was unveiled over a decade ago, the country has had a number of successes in terms of its transformation, and the delivery of components that are a part of its various giga projects, including: the completion of the initial phase of NEOM Bay Airport; the partial opening of Diriyah Gate; the opening of a significant portion of the King Abdullah Financial District (KAFD); the opening of a number of the Red Sea Project’s resorts and many others.
Over the last 12-18 months, the Kingdom seems to have kicked off a sharper focus on the completion of certain key giga projects. While this has meant that contract awards and work has slowed on some of the Kingdom’s giga projects, development is continuing in earnest on others. According to a recent Knight Frank report, in the first eight months of 2025 alone, US $3.7bn worth of contracts were awarded on the Diriyah Gate project. This move follows on from the $5.9bn in contracts that were awarded on the project in 2024.
Commenting on this market shift, Whealy states, “We’re very busy in the Kingdom but we’re not doing as many of those giga projects at the moment. If you look at MEED data that was published in August 2025, they reported a year-on-year drop on major project orders. It appears there has been a refocusing or redistribution of money towards key projects that are important such as Diriyah Gate, Red Sea, Trojena and others. There’s also Expo 2030 and the 2034 World Cup that have now been won, which will require huge investment. So I think refocusing is a sensible move and shows that the Kingdom is committed to its giga projects and its overall transformation – the ability to change course shows very good leadership as far as I’m concerned.”
Whealy first began working in the Kingdom in 2011 and notes that the perception of the country at that time was that it was a hardship posting. Today, the situation is far different, he notes.
“The government has done an amazing job of changing people’s perceptions and changing the country since those days, and as more people visit the country, those perceptions will be a thing of the past. For example, in the very near future, I think the Kingdom will offer a very good alternative destination to the Caribbean or Seychelles for people in Europe. You only have to fly from Jeddah to London and look down – what you see is phenomenal, from the beauty of the lagoons and the different islands to the natural onshore landscapes. There’s huge potential there and the Kingdom certainly has the ambition to take advantage of it.”
Delivering Vision 2030
Since Vision 2030 was first unveiled, Saudi Arabia has made tremendous progress on its transformation journey, even looking outside of the delivery of its various giga projects. Post 2020, the country secured the rights to host Expo 2030 Riyadh and the 2034 FIFA World Cup – two significant mega events that will support the Kingdom’s transformation journey and help the government positively shift the country’s perception on the world stage.
The successful delivery of those events is connected with the upgrade of existing assets, and the design and completion of all new assets and infrastructure in line with the original vision. It’s therefore vital that employers and construction industry stakeholders change the way they approach projects, and the way they interact with each other.
“At the moment there are multiple issues; employers demand immediate progress and consultants are struggling to keep up with their workloads, as they’re stretched between too many projects. At the same time, contractors are struggling, they’re not getting the cashflow they need and there is a direct correlation between payment and progress. All this creates the environment for a perfect storm when it comes to the delivery of projects,” Whealy cautions.
He adds, “Our job is to help people avoid disputes or resolve them and it’s something we do very well. That said, I strongly believe that prevention is better than cure – if we can get the right safeguards in place, get both employers and contractors to fully understand the contracts they are entering into, ensure they administer these contracts properly, keep good records and develop/update the baseline properly, that would be an excellent start.”
A change of mindset
According to HKA’s Eighth Annual CRUX Insight Report, which analysed more than 2,200 projects in 114 countries with a combined CAPEX of $2.43tn, projects in the Middle East have faced the longest schedule overruns. The top five causes of claims or dispute in the region were due to: change in scope; the late issue of design information; cash flow and payment issues; late approvals, and incomplete design.
Asked about the Saudi market in terms of contract structure and the way project stakeholders work with each other following the unveiling of Vision 2030 in 2016, Whealy notes that historic challenges continue to persist, and must be addressed.
“We’re not seeing enough real change in the way contracts are structured, and I think there’s still a desire to get projects off the ground too quickly. I think Saudi continues to suffer from the perennial problem of wanting to see progress, when – like the old adage says – it’s better to go slow to go fast. Sometimes we see a lot of problems come in at the contract stage and in that early design, and they’re either not dealt with properly or they’re pushed over to the contractor to try and resolve. The reality is that the contractor, more often than not, doesn’t fully understand the extent of those problems, and this can ultimately lead to major problems down the road,” Whealy explains.
He adds, “Clients in Saudi Arabia must remember that risk on a project should be taken by the party best capable of managing that risk – they must move away from the mindset of passing risk over to contractors. It’s also high time for the market to adopt a true value for money procurement evaluation rather than being largely driven by price, and a race to the bottom. Price is disproportionately weighted as a factor in the consideration of who employers appoint, and I think this in addition to the previously mentioned issues is the recipe for a perfect storm on projects. These are the common challenges I’ve observed over my 15 years in the Kingdom.”
Here, Whealy says that contractors also have a hand in the project challenges in the country, and should shift their thinking to ensure the best outcomes for themselves and the projects they’re delivering.
“I think some contractors run what I call a hit and hope strategy in the sense that they will price a project to win the job, and hope that through variation and claims they can make a margin on the project. As an example, I once worked with a client that didn’t fully understand the extent of their design obligations under the contract, but at that point we were already a year into the contract. It’s clear some contractors don’t fully understand what they’re signing up to, whether it’s a FIDIC Red Book, one of the Aramco contracts or other bespoke forms. This is a common problem.”
He emphasies, “This can become highly problematic; contractors must know what their contractual position is before they get into these jobs, particularly when it is a long-term, large-scale project.”
Highlighting another challenge that companies must consider are the implications of price escalation. Whealy says there’s been significant price escalation in Saudi but yet companies are reluctant to put price escalation provisions into their planning.
“Employers and contractors don’t really think about this but on a long-term project that runs for two-, three- or four-years or longer, it’s a major issue, and so I think it’s something everyone must think about carefully. So, whether its employers or contractors, there should be careful and sensible allocation of risk between the parties in terms of who is best able to manage that risk, and then it falls to that party to fully understand the risks they’re signing up to. This applies to both contractors and employers,” he states.
Speaking about employers specifically, Whealy says it’s in their best interest to move away from working with project partners in this way. “It can be a false economy by appointing someone who is the cheapest on a complete lump sum turnkey type project because, invariably, they’re late and it then creates massive problems for an employer, particularly if the employer needs the project to start generating revenue on a particular date. It’s far better for all these calculations to be accounted for and for the employer to go with someone who’s offering a slightly higher price, but also offers more certainty around the program, and is committed to achieving the agreed completion date.”
Delving deeper into the relationships project stakeholders have, specifically with regards to consultants and contractors, Whealy says that a combative mindset is the norm.
“People tend to fall into camps and it becomes a little bit of us versus them and that approach really doesn’t bode well. The alternative to this to introduce more collaboration and early contractor involvement, for example pre-construction services agreements. While I accept that these are not perfect, it’s vital that we have a mechanism that gets people to say ‘we’ve got to go get aligned and get this job done together’. When you step back from a project, ultimately all the various stakeholders, be it the employer, the funders, consultants, contractors and even the end user – they’ve all got the same objective. Every stakeholder wants the job done on-budget and on-time. So, if people start from that perspective and change their existing mindset and workout issues together from a project point of view, everyone benefits,” Whealy comments.
“The idea of retreating to the contract and the mindset of transferring all risk to the contractors is myopic and an overly simplistic approach because it doesn’t consider the impact on the employer and the entire supply chain if the project is delayed by a year or two,” he says.
Sharing an example of how current contracts and mindsets jeopardise projects, Whealy says that a contractor was recently looking to unilaterally terminate a contract because they couldn’t afford to remain on the project, and if that happened, it would have significant ramifications on the project and the employer. “There are very real implications of the current approach that are never fully considered,” he reiterates.
Making his closing statements, Whealy notes that the Kingdom has embarked on one of the biggest and most ambitious national rebuilding projects in his lifetime, and says that the rate of change has already been “phenomenal”.
“There’s already been a massive rebasing of the economy away from what I would call a simple petrodollar driven economy into something that is far, far broader covering multiple segments, including leisure, tourism, sport, and hospitality. There has been massive changes in the Kingdom, so I think that Vision 2030 has already been very successful. To continue delivering on the Kingdom’s ambition and make the delivery of the country’s vision smoother with regards to projects, industry stakeholders must look internally. At present, the industry is hardwired to be combative, and this has been entrenched for years, so it will be a challenge for any stakeholder to move away from,” he points out.
Having said that, Whealy says there is a place for collaborative contracting and says that while it doesn’t work on every project, it can have a positive impact, but it requires a fundamental change in mindset to make it work.
He concludes, “There has to be an acceptance from people to finding common solutions rather than following the normal play book where the parties retreat to their respective sides and play the blame game. There are other forms of procurement that can be tried but I’m not sure that the Saudi market is ready for management forms of contract and other approaches that give clients a lot more opportunity to change and control. As a start, I think the best thing employers can do is go slow to go fast. This means getting the design right, stress testing it to make sure everything works, ensuring that they really are at that particular point in the design process, and then making an informed decision to move forward on their projects with the right construction partners.”
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Source: ME Construction News
