NEOM ETSD Quarterly Report Q1 2024

Q1 2024 QUARTERLY REPORT

THE LAND OF THE FUTURE WHERE THE GREATEST MINDS AND THE BEST TALENT ARE EMPOWERED TO EMBODY PIONEERING IDEAS AND EXCEED BOUNDARIES IN A WORLD INSPIRED BY IMAGINATION

EXECUTIVE SUMMARY

INTRODUCTION

ORGANIZATIONAL UPDATES 14

Restructuring Manpower & Capacity

16 19

PROJECT GOVERNANCE ACTIVITIES NEOM Plan of Work Stage Gate Management Project & Vendor Quality Management

SUPPORT ACTIVITIES

NEOM TECHNICAL LIBRARY 32

20 22 23

Commercial Support Activities Projects Technical Support Activities

HIGHLIGHTS, CHALLENGES & KEY INITIATIVES

ETSD PARTNERS

36 37 45 46

ETSD 2024 Goals & Major Highlights

Key Risks & Challenges Ongoing Key Initiatives

The Engineering & Technical Services Department at NEOM, also known as ETSD, was established in 2019 by the CEO as an independent project governance entity at NEOM, responsible for ensuring NEOM’s developments are synchronized, fit for purpose , and delivered in line with the best practices and latest technology, safeguarding the company’s resources and image in the process. Following the PTS Merger, ETSD restructured its organization into seven divisions, segregating between core operational and governance, project support, administrative, and strategic functions. This is to enhance operations and drive continuous development and growth. Furthermore, ETSD continued building capacity to prepare for the upcoming challenge by reaching a total of 950+ direct and indirect manpower, which includes more than 550 inspectors that are deployed across the various projects. ETSD services have been enabled through strong ties and relationships with more than 30 world-class partners. In Q1 2024, ETSD continued to attend to its Project Governance mandate in a timely manner. In Stage Gate Management, ETSD reviewed 1 Strategy Document (Stage 1), 6 Masterplans (Stages 2A-2B), 18 Pre-Concept Designs (Stage 2C), 36 Initial Asset Briefs (Stage 2D), and 32 Design Packages (Stages 3A-3D). ETSD also processed 28 Cost Estimate Reviews, most of which were related to Class 5 (Stage 2). Lastly, ETSD processed 27 Deviation Requests, 15% of which were declined due to insufficient justification or mitigation measures. In Quality Management, a total of 158,289 inspections were processed in Q1 2024, with an average approval rate of 78%. Furthermore, 102 Non-Conformities (NCRs) and 29 Site Observations (SORs) were raised in Q1 2024, with most NCRs and SORs being related to Non-compliance with Schedule Q, use of Unapproved Documents, and Inadequate QA/QC. The average Project Quality Index for Q1 2024 was 91%, considerably higher than the target for compliance of 85%. With the addition of PTS, significant Project Support activities are currently being provided under ETSD, all to enable better compliance with governing requirements through proactive measures and enhancing engagement. Through preliminary design and BIM reviews, thousands of remarks and comments are provided proactively to stakeholders to allow for a more compliant stage gate submission. In addition, 99 Company Bids were produced, and 2 Work Orders were reviewed. Furthermore, 48 geotechnical surveys and studies were completed in Q1 2024, while 199 are in progress. Significant support was extended on the GIS Platform through the review of 250 Maps and 62 LUPs for coordinates and conflict verification. In addition to various digital applications related to workflows, dashboards, and web applications. Lastly, 18 drone surveys were conducted in Q1 2024 to track progress and gather topographic data. In Q1 2024, 57 Technical Documents were updated, and 29 New Technical Documents were published in the NEOM Technical Library. From an administrative and strategic standpoint, ETSD set 8 goals for 2024, reaching every area of the business and encompassing Strategy, Capacity Building, Operational, Engagement, Governance, Technology, Innovation, and Training & Development. Significant progress and highlights were made against each of those goals and have been provided in this report.

ETSD QUARTERLY REPORT | Q1 2024

Risks & Challenges remain. Those risks and challenges may impact all areas of the business. ETSD is working closely with key stakeholders to address those concerns, and progress is being made on all fronts. Please see the full report for more details. Last but not least, ETSD continues to invest in progress and development. Various key initiatives are taking place on both digital and non-digital fronts that can reach all areas of the business. We encourage every stakeholder to dive into those initiatives and reach out to the concerned ETSD personnel to acquire more information and understand how it can impact their business. Should you require more information, please visit us on our portal or contact us at ETSD@NEOM.com

Stage Reviews 91

Deviation Requests 27

Cost Estimate Reviews 28

Company Bids 99

Inspections 158,289

NCRs 102

Technical Documents 86

PQI 91%

ABOUT ETSD

The Engineering & Technical Services Department at NEOM, also known as ETSD, was established in 2019 by the CEO as an independent project governance entity at NEOM, responsible for project governance in key project-related areas such as Quality, Engineering, Estimating, and Planning. NEOM’s Leadership entrusts ETSD with delivering on its mandate effectively and with transparency.

MISSION

VISION

To ensure NEOM’s developments are synchronized, fit for purpose, and delivered to the highest quality, safeguarding the company’s resources andimageintheprocess.Wefosterlasting partnerships, exchange knowledge, and navigate complex challenges alongside our valued partners.

To empower dreamers with truth, knowledge & wisdom, making the impossible possible.

MISS- ION

VIS- ION

PROMISE

MANDATE

Seek knowledge. Synchronize decisions. Safeguard possibility.

The Engineering & Technical Services Department is a project governance entity at NEOM responsible for ensuring the NEOM Portfolio of projects is executed in the best way possible from a technical, cost and quality perspective in line with global standards, benchmarks, best practices, and in line with NEOM’s strategy, vision, and objectives.

PRO- MISE

MAN- DATE

This report is designed to provide a comprehensive update on the progress of ETSD over the past quarter. It aims to inform stakeholders and company leadership of the significant events, accomplishments, and challenges encountered, as well as outline the strategic direction and ongoing initiatives. The current report covers the activities and developments during Q1 2024. During this period, ETSD has navigated several challenges which have shaped its operations and strategic focus.

ETSD QUARTERLY REPORT | Q1 2024

Complementing the NEOM Values, ETSD adopted the following core values to best deliver on its mandate:

NEOM VALUES

CATALYST

CURIOUS

RESPECT

CARE

PASSIONSTE

DIVERSITY

ETSD CORE VALUES

COLLABORATION

AGILITY

COMPETENCY

INGENUITY

HONESTY

FAIRNESS

Following the PTS merger, ETSD restructured its organization and is now composed of seven divisions. ETSD’s Organizational Model now segregates between core governance, support, administrative and strategic functions. This helps improve performance and ensure continuous development and growth. RESTRUCTURING

DIVISION NAME COST ESTIMATION

TO ENSURE NEOM IS COST-EFFICIENT BY BLENDING WORLD-CLASS COST ESTIMATION PRACTICES WITH ADVANCED DIGITALIZATION TO PROVIDE UNPARALLELED BUSINESS SERVICES

MISSION

1. Provide oversight for contractor-developed cost estimates through cost benchmarking 2. Prepare “Company Estimates” to evaluate the required funding and compare with bids and tenders 3. Develop NEOM’s next-generation cost estimating requirements, standards, and procedures 4. Integrate cost estimating practices into all acquisition and project management processes and project management processes, including preparing Company Bids 5. Build and maintain a cost estimation database with realized and trending costs to enable business intelligence 6. Assisting our colleagues around NEOM with ad-hoc urgent and time-sensitive tasks to unlock value and maintain schedule.

KEY FUNCTIONS

DIVISION NAME FACILITIES PLANNING

TO ALIGN NEOM PLANS AND DEVELOPMENT WITH ITS STRATEGY AND MAXIMIZE THE BUSINESS VALUE OF ALL DESIGNS, BY ENGAGING NEOM STAKEHOLDERS IN A HOLISTIC APPROACH

MISSION

1. Strategy Implementation - Ensure Regional Plans and Developments are aligned with NEOM Strategic Objectives. 2. Development Optimisation - Review Masterplans & Asset design to maximize the development value. 3. Economic SustainabilitY - Review and Validate NEOM Development Life Cycle Cost and Revenue. 4. Assets Fit For Purpose - Provide Technical and Development Support to NEOM Stakeholders (e.g., IAB, VE, CD) 5. Impact Assessment - Assess the Contribution of NEOM Developments to the initial Strategic Plans.

KEY FUNCTIONS

ETSD QUARTERLY REPORT | Q1 2024

DIVISION NAME TECHNICAL CONSULTANCY

PROVIDE INDEPENDENT ENGINEERING EXPERTISE & TECHNICAL SERVICES, ENSURING NEOM DEVELOPMENTS ARE SYNCHRONIZED AND DELIVERED TO THE HIGHEST QUALITY, SAFEGUARDING THE COMPANY’S RESOURCES AND IMAGE IN THE PROCESS. 1. Stage Gate Reviews - Provide timely e-reviews of project designs covering Architecture, Structure, MEP, and LPFS in compliance with applicable Codes & Standards 2. Technical Investigations - Review technical requirements. RFPs, design scopes, and perform Technical Investigations, Benchmarks and Analyses. 3. Deviation Requests - Review deviations and waivers to accommodate for novelty in designs and gaps in available codes & Standards. 4. Governance Procedures - Develop the Technical Governance, Policies (NEOM Plan f Work), and Procedures to ensures assets are safe and secure and of world-class standard. 5. Custodian of Codes, Standards, and Procedures - Custodian of NEOM plan of work, procedures, international Standards & Codes, technical libraries and Sector Employer’s requirements. 6. Innovation - Reviewing new material, systems, and solutions for application in NEOM assets to support NEOM innovative strategies.

MISSION

KEY FUNCTIONS

DIVISION NAME PROJECTS TECHNICAL SERVICES

TO GUARANTEE NEOM IS BUILT WITH QUALITY DESIGNS, COST EFFICIENT AND MEETING THE CHALLENGING DELIVERY TARGETS, BY PROVIDINGWORLDCLASSDESIGNREVIEWSERVICES,GEOTECHNICAL SERVICES AND STATE OF ART DIGITIZATION FOR STAGES 3 ,2 AND 4 OF THE NPoW

MISSION

1. Design Review Services for stages 3A to IFC 2. Geotechnical Survey Services across all NEOM 3. Projects Controls & Framework Administration 4. Compliance & Internal Auditing 5. Digital Delivery Services.

KEY FUNCTIONS

DIVISION NAME QUALITY & EXCELLENCE

OUR MISSION IS TO BE AN ACTIVE PLAYER IN ELEVATING NEOM, COMMITTED TO DELIVERING A NEW WONDER TO THE WORLD ON TIME AND WITH FLAWLESS QUALITY

MISSION

1. Project Quality Management - PQM (Inspection) 2. Vendor Quality Management - VQM (Vendor & supply chain quality) 3. Quality Management System 4. Quality Audit and ISO certifications (Establish and support the operation of quality compliance function and QMS) 5. Training, Learning and development 6. Excellence and Continuous Improvement 7. Innovation & Digitalization & technology support.

KEY FUNCTIONS

DIVISION NAME BUSINESS OPERATIONS

WE MAXIMIZE ETSDS SUCCESS BY PROVIDING SUPPORT TO OUR STAKEHOLDERS BY ALIGNING OUR SECTOR CORPORATE MANDATE WITH NEOMS VISION, MISSION, VALUES AND STRATEGIC GOALS

MISSION

1. Manpower Support - Support & administer ETSD manpower and workforce deploy ment from planning and onboarding until offboarding 2. Budget & Cost Management - Manage & administer sector budget planning, implementation & frequently compliance review 3. Contract Management - Manage sector contracts, vendors from planning, deployment, administration and closeout 4. Document Control & Portal Management - Ensure that documents are accessible, protected, accurate, reliable, and up- to-date within the entire document lifecycle 5. Administration Support - Support workspace allocations, office supplies, inventory 6. Other adhoc request to ensure business continuity.

KEY FUNCTIONS

ETSD QUARTERLY REPORT | Q1 2024

DIVISION NAME PERFORMANCE, STRATEGY & DIGITALIZATION

TO OPTIMIZE ETSD’S PERFORMANCE, PRESERVE INTERESTS, AND GUIDE DEVELOPMENT, THROUGH EXCEPTIONAL ENGAGEMENT, PLANNING, ANALYSIS, EXECUTION, AND MONITORING, LEVERAGING BEST-IN-CLASS RESOURCES AND CAPABILITIES 1. Ensure optimum business performance, visibility, and efficiency, and maximize business development 2. Ensure optimum portfolio governance, efficiency, visibility, and transparency 3. Maintain highest brand reputation, and ensure effective engagement 4. Ensure development and enablement of talents and strategize resources while ensuring continuity and succession 5. Ensure effective data and information management, while capitalizing on knowledge and intellectual property 6. Manage the overall innovation and technology landscape at ETSD and optimize the use of ideas & applications

MISSION

KEY FUNCTIONS

ETSD Services are enabled through the hard work and commitment of more than 950 direct and indirect manpower, which include more than 550 inspectors that are deployed across the various projects. ETSD services enabled through strong ties and relationships with more than 30 world class partners. ETSD’s workforce distribution is broken down as follows. MANPOWER & CAPACITY

16%

19%

57%

administrative Technical Administrative

Quality Project Support

ETSD Manpower Breakdown

NEOM PLAN OF WORK

The NEOM Plan of Work (NPoW) presents a structured approach for the delivery of assets at NEOM across its Lifecycle Stages. The NEOM Plan of Work (NPoW) comprises five stages:

1 2 3 4 5 Strategic Definition STAGE 1 Master Planning & Asset Brief STAGE 2 Design STAGE 3 Construction Handover & Close-out Inition STAGE 4 Operation & Maintenance STAGE 5

STAGE 1 Strategic Definition

Stage 3A Concept Design

Stage 4A Mobilization & Construction

Stage 5 Operation & Maintenance

Stage 2A Concept Master Plan

Stage 3B Developed Design

Stage 2B Detailed Master Plan

Stage 4B Testing & Commissioning; Handover & Close-out

Stage 2C Pre-Concept Design

Stage 3C Detailed Design

Stage 2D Initial Asset Brief

Stage 3D Issued for Construction (IFC)

In Q2 2023, ETSD released a major update to the NEOM Plan of Work. This update was made as a result of several engagements and workshops with stakeholders, with the main objective of making the NPoW more flexible and agile, enabling a more tailored approach to project delivery depending on the varying circumstances, risks, objectives, challenges and conditions. The NEOM Executive Committee approved the revised NEOM Plan of Work (NPoW) on Sunday, April 2, 2023, and the new NPoW was announced to stakeholders and made effective on April 13, 2023.

Different iterations exist of the NEOM Plan of Work depending on the projects. For more information, please visit the revised procedure [NEOM-NEN-PRC-029 – NEOM Plan of Work]

ETSD QUARTERLY REPORT | Q1 2024

STAGE GATE MANAGEMENT

Planning & Technical Stage Gate Reviews In Q1 2024, ETSD reviewed 1 Strategy Documents (Stage 1), 6 Masterplans (Stages 2A-2B), 18 Pre- Concept Designs (Stage 2C), 36 Initial Asset Briefs (Stage 2D), and 32 Design Packages (Stages 3A-3D).

1 SD

2A CMP

2B DMP

2C PCD

2D IAB

34 36

3A CD

3B DvD

3C DD

3D IFC

Legend LUP: Land Use Permits; IFC: Issued for Construction (100%); DD: Detailed Design (90%); DvD: Developed Design (60%); CD: Concept Design(30%); PCD: Pre-Concept Design; IAB: Initial Asset Brief; DMP: Detailed Masterplan; CMP: Concept Masterplan; SD: Strategic Definition Stage Review Count (Q1 2024)

Cost & Commercial Reviews: In Q1 2024, ETSD Cost Estimation Division conducted around 28 Estimate Reviews across the various stages with an overall endorsement rate of 100%. Most of these reviews were conducted for Class 5 Estimates, and the breakdown by class is provided in the graph below.

100%

100

Estimate Review Acceptance (Q1 2024) Within Range Outside Range

Class 1 (-5/+10%)

Class 2 (-10/+15%)

Class 3 (-15/+20%)

Class 4 (-20/+30%)

Class 5 (-30/+50%)

Stage Review Count (Q1 2024)

Estimate classes and acceptable ranges vary across the NEOM Plan of Work stages with the expected accuracy increasing as the design advances. The below table shows the accuracy and class across the various stages of the NEOM Plan of Work.

STAGE 2 Masterplans Pre-concept Design, IABs: Class 5 (-30% / +50%)

STAGE 3A Concept Design: Class 4 (-20% / +30%)

STAGE 3B Developed Design: Class 3 (-15% / +20%)

STAGE 3C Detailed Design: Class 2 (-10% / +15%)

STAGE 3D Tender and Issued For Construction: Class 1 (-5% / + 10%)

Deviation to NEOM Plan of Work: A total of 27 deviation requests were processed in Q1 2024, all related to the NEOM Plan of Work Stages as follows:

Plan of Work

Codes & Standards

BIM Requirements

Other Technical Requirements

Approved

Rejected

Deviation Requests by Type (Q1 2024)

15% of deviation requests received in Q1 2024 were not approved due to a lack of justification and mitigation measures.

ETSD QUARTERLY REPORT | Q1 2024

For the deviation requests related to the NEOM Plan of work, the distribution per stage is as follows:

1 1%

2A 2%

2B 1% 2C 5%

3D 8%

2D 3%

3C 28%

3A 21%

3B 31%

Most deviation requests received target deviations across Stages 3A-3D to expedite the design development process to meet schedule constraints. Deviation Requests Distribution by NPoW Stages

In quality, the Q1 2024 PQI was 91%, higher than the cumulative of 87% and the target for compliance of 85%. PROJECT & VENDOR QUALITY MANAGEMENT

100

Non-Compliant

Need Improvment

Compliant

Cumulative (87%)

Q1 2024 (91%)

Overall PQI

86% 60% 65% 70% 75% 80% 85% 90% 95% 100% Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 89% 89% 89% 88% 88% 89% 90% 90% 91% 91% 91% 60% 65% 70% 75% 80% 85% 90% 95% 100% Apr-23 May -23 Jun-23 Jul-23 Aug-23 Sep- 23 Oct-23 Nov- 23 Dec-23 Jan-24 Feb- 24 Mar-24 86% 89% 89% 89% 88% 88% 89% 90% 90% 91% 91% 91% Q1 2024 showed excellent overall performance, with a 91% PQI for each of January, February, and March.

Non-Compliant

Need Improvement

Compliant

Monthly Average

Overall Historical Monthly PQI

158,289 inspections were received in Q1 2024, out of which 147,866 were project work inspections and 10,423 were material-related. The approval rate of Work and Material Inspections stood at 77% and 81% respectively.

Work Inspection Requests (WIR) 2024

RECEIVED (Q1 2024)

UNDER REVIEW (Q1 2024)

APPROVED (Q1 2024)

REJECTED (Q1 2024)

77%

147,866

4,911

110,724

32,231

Material Inspection Requests (MIR)

RECEIVED (Q1 2024)

UNDER REVIEW (Q1 2024)

APPROVED (Q1 2024)

REJECTED (Q1 2024)

81%

1,848

10,423

593

7,982

Currently, 4 out of 47 batching plants and 1 out of 23 third-party labs are classified as high-risk and are not approved for use.

10 12 14 16

10 15 20 25 30 35

32 32

14 14

8 8

0 2 4 6 8

4 4

0 5

1 1

Low Risk

Medium Risk

High Risk

Low Risk

Medium Risk

High Risk

Batching Plants

3 rd Party Labs

ETSD QUARTERLY REPORT | Q1 2024

102 Non-Conformities (NCRs) and 29 site observations were raised in Q1 2024. The breakdown of NCRs by area is as follows:

Project Quality

Vendor Quality

Compliance Audits

NCR

SOR

Non-Conformities and Observations (Q1 2024)

The breakdown of NCRs and SORs for Q1 2024 is as follows:

Noncompliant to Schedule Q

Unapproved Technical Documents

Noncompliant Execution

Inadequate QA/QC

Unapproved Materials/MIR

Unapproved IFC

Noncompliant to PQP

Poor Workmanship

NCR

SOR

Non-Conformities & Observations by Type (Q1 2024)

COMMERCIAL SUPPORT ACTIVITIES

Cost & Commercial Activities Furthermore, activities related to the review of tenders and work orders have reduced in Q1 2024 compared to the 2023 average. In Q1 2024, 99 Company Bids were produced, and 2 Work Orders were reviewed. Architectural & Engineering Services (AESS) PTS also manages the Architectural & Engineering Services framework, connecting our projects delivery stakeholders and proponents with dozens of engineering firms to support them in various design and technical-related activities. In total, 5 Work Orders were issued against the AESS Framework in Q1 2024.

PROJECTS TECHNICAL SUPPORT ACTIVITIES

The Projects Technical Services Division (PTS) complements the ETSD governance mandate, by extending their support to the various sectors and stakeholders across the various areas of Project Delivery, enhancing submissions quality and providing technical and general support. Design Review Support(Pre-Stage Gate Quality Check) PTS supports the project delivery entity by conducting preliminary reviews of stage gate submissions through their design review process, ensuring submissions meet minimum requirements prior to the stage gate review process. In Q1 2024, PTS reviewed and returned feedback on 100,000+ design documents, generating a total of 7,543 constructive comments to stakeholders. The overall distribution of those documents by Stage is as follows:

3A 13%

3B 4%

3D 48%

3C 35%

Documents Distribution by Stage (Q1 20214) 3A 3B 3C 3D

ETSD QUARTERLY REPORT | Q1 2024

BIM Reviews In addition to the design review activities, PTS ensures BIM Models for deficiencies and ensure they are in line with our requirements and best practices. In Q1 2024, 250 BIM models were reviewed. Geotechnical Studies and Surveys Furthermore, PTS provides Geotechnical Studies and Surveys services across NEOM, maintaining our database with information critical for our design activities. In total 48 Surveys/Studies were completed in Q1 2024 and 199 are in progress, broken down as follows:

Topographical Survey

Seismic Studies

Topographical Survey Onshor Geotechnical Offshore Geotechnical Bathymetric Surveys

112

100

120

Completed In Progress Geotechnical Studies & Surveys(Q1 2024)

Geographical Information Systems (GIS) PTS support the processing of maps and geographical information across the GIS platform through the review of maps, workflows, LUPs, Data and other, and supports the development of

the platform through publication dashboards and web applications. In Q1 2024, PTS successfully completed the following GIS related activities:

GIS PROGRESS: JAN – APRIL 2024

COUNT

Number of GIS Map Reviews

250

Number of Workflows

LUP Coordinate & Conflict Reviews

Number of Data Conversions

Number of Dashboards Published

Number of Web Applications Published

GIS Support to NEOM Project teams

Drone Surveys PTS supports Projects Delivery teams through the provision of Linear Construction Monitoring AI/Drones Surveys. A total of 18 Drone Flights were recorded in Q1 2024.

The online library hosts a wide array of project-related technical documents, including governing and operating procedures, guidelines, forms, data sheets, manuals and others, relevant to various sectors at NEOM including ETSD, Public Safety, Water, Environment, Energy, Projects, and Design & Construction have hosted their technical documents on the ETSD Library. The NEOM Technical Library may be accessed from the ETSD Portal through the following link: [NEOM Online Technical Library]

Non-ETSD Documents

ETSD Documents

Updated Documents

New Documents

Published Technical Documents By Entity (Q1 2024)

Others

Manuals

Specifications

General Guidelines

Technical Guidelines

Procedure

SOPs

Form

Updated Documents

New Documents

Published Techincal Documents by Type (Q1 2024)

ETSD QUARTERLY REPORT | Q1 2024

ETSD 2024 GOALS & MAJOR HIGHLIGHTS

While a governing entity, ETSD made it clear to stakeholders that its approach to governance is geared towards collaboration, engagement, and efficiency, with the ultimate goal being working together towards shared objectives and goals. Accordingly, ETSD defined 8 goals for 2024 touching every aspect of the business; Strategic, Capacity, Operational, Engagement, Governance, Technology, Innovation, and Development. The below will display ETSD’s 2024 progress against its goals:

Goal 1 - Strategy & Direction Goal Description : Drive informed decisions, increase efficiency, and strengthen ETSDs future mandate by developing and deploying strategic capabilities captured in a framework that serves as a foundation for ETSD’s future success. Focus Areas: - Strategic Planning & Alignment: ETSD will establish clear 2024 goals, review its mission and functions, and set up a Strategic division to guide long-term growth and success. - Performance Improvement: ETSD will use the EFQM model to continuously assess and improve its performance across functions, processes, and governance. - Brand Building & Expansion: ETSD will develop its brand identity and values while fostering engagement and partnerships. Q1 2024 Highlights & Progress: - Established the ETSD 2024 Goals with a focus on 8 key areas. - Established the Performance, Strategy and Digitalization office to focus on key strategic elements at ETSD and guide development and growth. - Initiated an EFQM-based gap assessment at ETSD for operational excellence. - ETSD held a major internal event to welcome PTS and solidify its internal identity and brand. - Established partnerships with StaffCo to streamline SMP management and reduce administrative burden within ETSD. - Worked with THE LINE on a Continuous Improvement Strategy – Implementation Plan. - Completion of a Draft Geographic Information System Strategy.

ETSD QUARTERLY REPORT | Q1 2024

Goal 2 - Capacity Building

Goal Description: Build and utilize existing capacity and establish new strategic partnerships in alignment with the 2024 approved budget. Focus Areas: - Workforce Optimization: ETSD will focus on talent management and building its workforce capacity through strategic hiring, development programs, and framework agreements to meet 2024 goals. - Resource Management: ETSD will align its resource allocation and partnership opportunities with the approved 2024 budget while ensuring business continuity. Q1 2024 Highlights & Progress: - NEOM Best Practice Exchange, 3rd edition has been launched - ETSD and the Sindalah Island Project Team anticipated the need for a collaborative task force to assure exemplary luxury standards were delivered. This led to the creation of the Sindalah Island Aesthetic/Architectural Inspection Task Force which consists of specialized team of professionals. - The Aesthetic Task Force’s influence is becoming increasingly apparent within the organization. Consequently, the Sindalah & Municipal Affairs Licensing Team (part of the Shared Services division under the NEOM Authority at Island Proponent) has reached out to QED. They are planning to establish a team similar to ours, specifically to oversee Municipality-related inspection activities in Sindalah. This team will be led by Sunny Kaler. - The expansion of the General Survey Services (GSS) framework via adding seven more international firms, reaching fifteen firms, increasing the financial CAP. Goal 3 – Operational Goal Description: Sustain and improve current ETSD services by continuously assessing and adjusting current business processes, data & information to be able to deliver and meet customers’ expectations, and enhance decision-making. Focus Areas: - Process Enhancements & Continuity: ETSD will focus on delivering the Implementation Plan, improving project efficiency, maintaining business continuity, strengthening core functions, and streamlining procurement processes. - Information & Data Enhancements: ETSD is establishing a data-driven culture by implementing an information strategy, improving communication, securing document management, ensuring data accuracy, and launching a data visualization dashboard.

Q1 2024 Highlights & Progress: - In addition to attending to our day-to-day operations on time (Technical Reviews, Inspections, Commercial Reviews, …), below are some key operational highlights of Q1 2024: - 7 NEOM entities have enrolled in the ISO Certification Program; 3 obtained their certificates while 4 are ongoing. - Our Approved Vendors List (AVL) has expanded, now totaling 1,982 vendors, with 567 new introductions and 78 removals, up from the previous 1,493. - 25 x ISO 9001 Lead Auditors certified to date within NEOM by ETSD. - Successful Energization of Sindalah through a collaborative effort with Projects, ENOWA, EPC, and Contractors. - ETSD representatives maintain a continuous presence on-site to ensure all processes comply with NEOM’s project requirements. - Spearheaded the implementation of the new WBS and cost center structure for 2024, effectively communicating it to all partners. - Developed a comprehensive commercial responsibilities matrix with clear deadlines, optimizing workflow for ETSD and partner teams. - Worked closely with our partners to ensure they are continuously paid on time and service is not interrupted. Goal 4 – Engagement & Support Goal Description: Increase engagement and enhance communication with stakeholders externally and internally. Focus Areas: - Enabling a Quality Culture Across NEOM: ETSD is implementing a multi-pronged approach to enhance quality focus, including achieving ISO certification, training ambassadors, developing quality programs for projects, and fostering a culture of excellence through knowledge sharing and training. - Improved Communication and Awareness: Improve ETSD Portal, develop targeted external communications, and implement a comprehensive communication strategy to improve information flow. - Stronger Relationships: Increase engagement and build stronger partnerships with stakeholders across NEOM through regular meetings, collaboration, and support. - Support Capacity Building and Build Knowledge at NEOM: ETSD is investing in training and capacity building of stakeholders through programs, an academy, and a technical library to improve project quality and contractor/employee knowledge.

ETSD QUARTERLY REPORT | Q1 2024

Q1 2024 Highlights & Progress: - Released the ETSD 2023 Annual report in both flipping book and video formats. - Islands: Ongoing close coordination between Projects Technical Services (PTS) and Projects Delivery Team (PDT) resulted in achieving Design to progress from Stage 3 A to Stage 3 C. - Independent input from FUGRO/coordinated by NEOM PTS to Shushah Island undertook a detailed analysis of the Probabilistic Seismic Hazard Analysis and after stringent critique reviews, the study was approved which the designs to be effective confirming that a fault line is nonexistent on Shushah island. - Collaborated with NEOM operations on the NC1 Diner expansion. - Collaborated with Trojena Proponent and projects team to deliver the required As-Built drawings to facilitate the handover of Trojena Base camp. - Collaborated with TONOMUS to facilitate the handover of new HQ at NC1 and issue the HOC. - Held workshops providing guidance on Stage Review process and the NPoW. - Collaborated with Trojena Projects team to inspect mock-up ski slope and agreed technical requirements for the snow making pipework installation. - Collaborated with NEOM International Airport to agree on a review strategy to ensure that the review process is aligned with the fast-track timeline of the project. - Early stakeholder engagement on cost with Oxagon Research & Innovation Center. ◦ Kick-off meeting with Spine/Connector Rail team on their operating contractor model. ◦ Meeting with NEOM Investment Office and Procurement to agree on workflows on Logistics Joint Venture. ◦ Fortnightly meeting of the Benchmarking Expert Network–discussion of data collection workflows and demonstration of Procurement Benchmarking Tool (PBT). ◦ Visit to the Design & Construction Innovation Hub. ◦ Trojena Cost Estimation Process/Procedure review with Executive Cost Management Consultant. ◦ Shushah Island budget review – a substantial increase in budget. ◦ Brief discussion with Internal Audit to close out Sindalah Audit - How are leadership informed about issues in cost estimates? ◦ Trojena FB18 - various change request approvals.

- NQPA (NEOM Quality Project Award): The NEOM Quality Project Awards 2023 was a resounding success, held on March 6, 2024, at the NEOM Multipurpose Hall NC1. This award is designed to recognize projects for their outstanding Quality performance and commitment to continuous improvement, innovation, and Quality excellence. It was an honor to recognize and award the dedication and excellence of the teams involved. ◦ Platinum: The Spine – running Tunnel / Mountain section. ◦ Gold: Sindalah Island – Marina Quay Wall. ◦ Silver: Connector – Rail Corridor. - Oxagon Port has entered into a collaboration agreement with ETSD to assist with their IMS implementation and certification. - Quality training regarding NEOM NCR Management Framework conducted for ETSD (Q&E) team. ◦ NORE (NEOM Operations RoadMap to Excellence) Project Concept Workshop was held. ◦ Excellence Ignited Newsletter for January, February and March 2024. - The Batching Plant & Testing Lab website experienced increased engagement, with over 359 hits in January. - Compilation of a comprehensive geotechnical database that incorporates current and existing geophysical data across six years covering all regions in NEOM was completed. - NEOM Roads Condition Assessment study: The site testing included concrete core sampling, Geotech investigation and Topo topographical surveys, the Structural report for Priority 1, and the Hydrology Report were completed. - Fun Cluster Ski Village: PTS Trojena value engineering initiative resulted in significant cost savings following a detailed technical study and design optimization of the steel frame superstructure. Goal 5 – Governance Goal Description: Enhance ETSD governance by continuously reviewing and updating ETSD technical policies, processes, procedures, and success measurements. Focus Areas: - Improved Technical Governance: ETSD will enhance cost data collection and storage, refine company bidding procedures, and update existing project procedures. - NEOM Plan of Work (NPOW) Alignment: ETSD will lead efforts to update 25 existing procedures and create 10 new ones to fully reflect the June 2023 revisions to the NEOM Plan of Work. - Strengthened Governance: ETSD will review and improve its existing Governance, Risk, and Resilience processes to ensure alignment with NEOM’s wider GRC requirements. Additionally, they will develop a Portfolio Governance Evaluation Model to ensure project alignment with NEOM’s plan.

ETSD QUARTERLY REPORT | Q1 2024

Q1 2024 Highlights & Progress: - Publication of three new NEOM procedures - TCD is on track with the 2024 Implementation plan. - Updated the Handover Procedure (NEOM-NEN-PRC-022). - Updated the Internal Audit Procedure (NEOM-NEN-SOP-004). - Drafted the Root Cause Analysis Guideline (NEOM-NQM-GGD-005). - An internal audit was conducted on PQM - THE LINE and The Spine teams. Goal 6 – Technology Goal Description: Leverage technology to streamline and improve the efficiency and effectiveness of ETSD services and associated processes to 1) reduce average processing time, 2) increase customer satisfaction, and 3) realize cost savings. Focus Areas: - Project Governance Digital Transformation and Process Improvement: ETSD is undertaking a comprehensive digital transformation to improve project management, reporting, cost estimation, data visualization, and collaboration through software implementation, system enhancements, and piloting innovative solutions like AI-powered leak prediction. - Business Management and Reporting: ETSD is streamlining operational efficiency by enhancing financial reporting through improved accrual management, implementing SAP Fieldglass for better workforce administration, and introducing a document control dashboard alongside a collaborative knowledge management platform. Q1 2024 Highlights & Progress: - Continued the digitalization of the NEOM Plan of Work Processes including Stage Gate and Quality Management. - Working on various enhancements initiatives on Oracle Aconex to enhance data management, user interface and workflows related to the NEOM Plan of Work. - Meeting to kick off Phase 2 of CostOS implementation (CosMO benchmarking). - TONOMUS AI cloud installation for CostX. - SmartRock Technology Pilot (We’ve implemented advanced concrete sensors with TUVR to monitor concrete) temperature and strength during and after pouring). - A committee dedicated to the technical evaluation of Unifer, encompassing testing and evaluation, has been established. Following a comprehensive review of workflows, digital forms, and reports, the technical team will provide official approval for the processes associated with PQM, VQM, and QMS through a thorough and iterative evaluation. - Creating and updating several GIS dashboards/web-applications to support NEOM non-GIS users.

Goal 7 - Innovation & Knowledge Management Goal Description: Cultivate a culture of innovation by establishing a knowledge-sharing platform and implementing training programs, encouraging employee-submitted ideas, and sharing knowledge. ETSD will cultivate an innovation culture through a department-wide framework, knowledge-sharing platform, and employee training programs, while identifying opportunities for governance, process, and AI implementation. Q1 2024 Highlights & Progress: - Established the Innovation Management function at ETSD to foster an innovation culture. - In collaboration with our consultant TUVR, we have successfully implemented an advanced concrete sensor technology, which monitors the temperature and strength of concrete during and after the pouring process. The insights will ensure the quality and integrity of our construction and contribute to enhancing efficiency. For instance, the data provided by SmartRock allows for more informed decisions regarding formwork removal and post- tensioning operations. Given the pilot’s promising results, we plan to integrate SmartRock technology into the Lake Dam project. This initiative is crucial given the extensive use of concrete and the continuous pouring required for the dam. - We are enhancing the inspection processes by adopting helmet-mounted cameras, like the RealWear 520, for safe and efficient inspections, particularly in hard-to-reach areas. The trial in the Gulf of Aqaba showed the technology to be lightweight, ergonomic, and effective in improving remote connectivity and video quality, offering significant safety, productivity, and cost savings advantages. Goal 8 - Training Development Goal Description: Ensure self and team access and attendance to key development opportunities. ETSD is committed to continuous learning by offering skills-based training, fostering knowledge- sharing platforms, and encouraging participation in industry events to enhance employee expertise, understanding of AI applications, and professional growth opportunities. Q1 2024 Highlights & Progress: - ETSD is developing a roadmap for an ETSD-driven academy to build capacity and enhance knowledge sharing related to Projects Governance.

ETSD QUARTERLY REPORT | Q1 2024

KEY RISKS & CHALLENGES RISK

MITIGATION

Lack of access to highly competent and capable resources

Collaborating with StaffCo

ETSD's purpose is not universally understood across the NEOM ecosystem leading to resistance, poor collaboration, and non- compliance

ETSD is developing and implementing a communications strategy, including a roadshow across all NEOM Entities, to raise awareness of ETSD's role/purpose

Increase collaboration and trust with stakeholders to ensure constant alignment and faster turnaround times.

Lacking communication between Stakeholders and ETSD results in lack of visibility

Low quality submission and deliverables may delay the review process and the project progress.

Work with stakeholders to ensure they have proper planning and control measures that would minimize defects and deficiencies.

ETSD is working closely with relevant stakeholders to bridge those gaps, and drive synergy and alignment across all areas of project governance.

There exist misalignments and gaps between the various entities when it comes to procedures, data and applications.

ONGOING KEY INITIATIVES

ACTIVITY

AREA

Dissemination of GIS database to all regions to encourage collaboration and maximize shared data resources

Technology

The construction contract for the EPICenter, covering all regions, has been officially awarded to the vendor. The initiation of construction activities for the EPICenter is now scheduled. The site survey has been completed, and the design for the room is approved Testing a new Knowledge Management Platform for the management of the Technical Library, along with advanced features to enhance users access and sharing of technical information

Technology

Assessing the use case of a Digital Twin and Project Lifecycle Management at NEOM and coming up with clear recommendations

Technology

ETSD-PTS is expandiwng the current AESS frameworks to include new consultants to enrich existing pools of consultants with additional expertise and new disciplines

Project Support

Extensive value engineering reviews to reduce project costs on various packages across the region

Project Support

Establish the QMS 2024 Training Program and launch the first E-learning Module

Quality & Excellence

PQM Technical Training & Competency Program for Inspectors, Projects & Contractors

Quality & Excellence

Complete ETSD's ISO 9001 QMS annual external audit and obtain recertification

Quality & Excellence

Complete the ISO IMS Certification Initiative for QMS (GRC - Resilience/ Food ) & IMS (Env Auth./ENOWA Water)

Quality & Excellence

Execution of NEOM Excellence Strategy

Quality & Excellence

Develop and Enhance the excellence culture in NEOM (Organize a benchmarking visit to enhance knowledge and develop networking)

Quality & Excellence

Project Quality & Internal Compliance Audits across active NEOM Projects

Quality & Excellence

ETSD QUARTERLY REPORT | Q1 2024

- ETSD Townhall Winter 2024 - Partnership with StaffCo

- Continuous Improvement Strategy – for THE LINE - Draft Geographic Information System Strategy

- NEOM Best Practice Exchange, 3rd edition has been launched - Collaborative task force for Sindalah - Expansion of General Survey Services (GSS) framework

- ISO Certification for 7 NEOM Entities - Expansion of AVL List with 567 new vendors (total is now 1982)

- 25 ISO 9001 Lead Auditors Certified - Successful Energization of Sindalah - Worked with suppliers to ensure timely payment and avoid service interruption

- Publication of three new NEOM Procedures - Internal Audit conducted on PQM – THE LINE - Updated Handover and Internal Audit Procedure

- Held the NEOM Project Quality Awards for 2023 - Technical & Strategic collaborations w/sectors (NEOM Operations, TROJENA, TONOMUS, etc.) - ISO Support to various sectors - Held workshops and awareness sessions related to Plan of Work and associated procedures - Established the QMS 2024 Training Program and launched the first E-learning Module - PQM Technical Training & Competency Program for Inspectors, Projects & Contractors - Worked with entities, stakeholders and partners to review cost models - Collaboration with TONOMUS and Stakeholders on digital implementations and strategies - Various Excellence Ignited Newsletters were held - Comprehensive compilation of geotechnical database - Increased engagement on the Batching Plant & Testing Lab website - Conducted independent technical studies - Held various value engineering workshops for various regions and assets - Release awareness videos about ETSD - ETSD 2023 Annual report in both flipping book and video - Digitalization of NEOM Plan Of Work Continues (Stage Gate, E-Review, Project/Vendor Quality) - SmartRock Technology Pilot for advanced concrete sensors with TUVR - Conducted Proof of Concept for Realwear tool and integrated it with Aconex - Created and updated several GIS dashboards/web-applications to support NEOM non-GIS users - Dissemination of GIS database to all regions to encourage collaboration and maximize shared data resources - The construction contract for the EPICenter, covering all regions, has been officially awarded to the vendor - Testing a new Knowledge Management Platform for the management of the Technical Library - Assessing the use case of a Digital Twin and Project Lifecycle Management at NEOM and coming up with clear recommendations

ETSD services at NEOM are delivered in partnership with more than 30 global and best-in-class firms to ensure optimum value and service to the company.

ETSD QUARTERLY REPORT | Q1 2024

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52

Made with FlippingBook - Share PDF online