Knowledge Economic City has signed a SAR 91 million infrastructure contract with SALCO Saudi Contracting Company. The agreement was executed through its subsidiary, Algharraa International Real Estate Development Company, to develop the Southeastern District.
Infrastructure Contract Details
This contract is valued at approximately SAR 91 million, excluding value-added tax. The development plan aims to prepare land sites to attract investment and launch future projects. Consequently, the project will be executed over a 24-month period.
“The signing of this contract reflects our commitment to delivering our masterplan to the highest standards. It marks a significant milestone in advancing the development readiness of the Southeastern District, which will host several projects, foremost among them Knowledge Gardens.”
Dr. Moath Al-Yahya, CEO of Knowledge Economic City
Scope of Southeastern District Works
The physical works cover the area north and south of Sheikh Ibn Baz Road. Specifically, the scope includes general site works, excavation, backfilling, grading, roads, and pavements. In addition, the contractor will install potable water, sewerage, and stormwater drainage networks.
The infrastructure will also feature irrigation, firefighting, electrical works, and street lighting. Furthermore, the project includes information and communications technology (telecom) infrastructure and a district cooling network. These systems will comply with approved engineering designs and technical specifications required by the relevant authorities.
Strategic Impact on Knowledge Economic City
The Southeastern District represents a significant future development area within Knowledge Economic City. The infrastructure works will serve several strategic projects, most notably the Knowledge Gardens project. Meanwhile, the development will support residential, commercial, hospitality, and mixed-use projects.
This development will accelerate land preparation and strengthen the investment environment for developers. As a result, the company expects to launch projects on schedule. This supports the strategy to maximize the value of its 6.8 million square meter land portfolio while diversifying revenue streams.
Financial and Regulatory Context
The contract value will be paid through monthly progress payments based on completed works. These costs will be capitalized as part of the project development cost under International Financial Reporting Standards.
Recent regulatory developments have expanded real estate investment and ownership opportunities for non-Saudis in Knowledge Economic City. This change supports anticipated growth in demand. Ultimately, the project aligns with the goals of Saudi Vision 2030 to develop Madinah’s economy and tourism.
