* Qatari firms now building parts of Saudi mega project NEOM
* Saudi presents outlet for post World Cup slowdown in Doha
* Qatar in Riyadh's good books after major Gulf crisis

By Andrew  Mills
       DOHA, June 12 (Reuters) - When Saudi Crown Prince
Mohammed bin Salman buckled himself into a Bentley SUV with
Qatar's emir at the wheel, it was a moment of camaraderie that
followed years of prickly relations - and a chance for his host
to show off Doha's gleaming new buildings.
    Prince Mohammed's visit to the tiny neighbouring Gulf state
in 2021 not only helped bury a bitter political grudge that had
rumbled on for three years, it also ignited a rise in
Qatar-Saudi business ties that has gathered pace ever since. 
    His SUV tour of the Qatari capital took in a new 10-lane
expressway, a futuristic metro and a 90,000-seat World Cup
stadium radiant in gold-coloured cladding - exactly the kind of
mega projects the Saudi prince is in a hurry to build back home.
    Local news reports of the leaders' car ride made no mention
of MbS's reaction to the sights. But a subsequent burst of new
business between Qatari and Saudi companies -- from railways, to
weapons and even a project to bring snow to the Saudi desert --
suggest his visit helped inspire a turning point in ties. 
    The Qatari and Saudi government media offices did not
respond to requests for comment about growing relations between
the two countries.
    When the 2022 World Cup concluded, ending a decade-long
construction boom in Qatar, Qatari companies seized the chance
to offer the kingdom the know-how and capacity they had honed in
the lead-up to the world's biggest sporting event.
    The move generated at least $10 billion in contracts and
cemented a partnership between Qatar's Sheikh Tamim bin Hamed Al
Thani and Prince Mohammed, also known as MbS, a development
applauded by Western allies keen to shore up stability in an
unstable region, four business executives, three analysts and
two diplomats said.
    The size of Saudi contracts won by Qatari contractors since
the boycott has not been previously reported and shows Qatar
firms are closely involved in completing Saudi so-called giga
projects, big ventures that are central to ambitious 2030
targets to diversify the Saudi economy away from oil.
    The alliance is in stark contrast to a rift that started in
2017 when Saudi Arabia, the United Arab Emirates (UAE), Bahrain,
Oman and Egypt choked off Qatar's economy with a boycott,
accusing it of backing terrorists. Qatar denied the charges and
the rift was ended in a series of conciliatory moves in 2021.
    "There is so much work (in Saudi Arabia), I think all the
companies in the Middle East will go," said Saif-ur-Rehman Khan,
managing director and owner of Redco International, a Qatari
construction company.
    Redco's Khan said the MbS visit was important because it
prompted a joint Saudi-Qatar committee charged with restoring
ties to identify Qatari firms well-placed to contribute to Saudi
projects.
    Two years on, a December 2023 meeting of the Saudi-Qatari
coordination committee was held in a "spirit of friendship,
brotherhood and mutual trust” and sought to bring a "renaissance
for the two countries", according to a joint statement.
    Redco is now focused on precast concrete and concrete plants
that are now involved in NEOM, the multi-billion dollar Saudi
flagship project, a huge economic zone the size of Belgium. 
    
    'START RIGHT AWAY'
    For four decades, Redco made billions by focusing only on
Qatari projects. But the company's focus has shifted to Saudi
Arabia in a big way: its first two contracts in the kingdom are
worth $3 billion, and it has moved the majority of its employees
– more than 8,000 – and much of its heavy equipment inventory
from Qatar to an industrial zone on the Red Sea coast, Khan
said.  
    MbS's 2021 visit prompted Saudi authorities to invite
Qatar's top construction companies to bid for work, Khan said.
As Redco's work on World Cup projects wrapped up, Khan travelled
to NEOM and put together a proposal.  
    "They welcomed us and made it easy to bid," he said, adding
that Neom waived a customary requirement for bidders to put down
a 10% bond because Redco had no banking facility in the kingdom.
    Some NEOM projects are delayed but Redco has pushed ahead. 
    Over six months, Redco built a 1.5 km long precast concrete
factory, the world's largest, and now is at work on tunnels for
an underground railway and infrastructure corridor and culverts
for a 147 km (91 mile) long pipeline to supply water to make
snow at Trojena, Saudi Arabia's first ski hill.
    "They wanted us to start right away, with no mobilization
period. And we did," Khan said.
    NEOM's media office did not comment when contacted by
Reuters. 
    The neighbours are also growing aligned diplomatically.
    Saudi Arabia, for example, supports Qatar's efforts to
mediate between Israel and Hamas over the war in Gaza.
    Doha has avoided discord with Riyadh by dialling back some
aspects of its foreign policy, like withdrawing opposition to
Saudi efforts to welcome Syria back to the Arab League and
taking a backseat on peace negotiations in Yemen and Sudan.
    
    FROM FLYING IN COWS TO PROJECTS WORTH $7 BLN 
    Qatar and Saudi Arabia are also exploring ways to make
weapons and other defence items together, with Barzan Holdings,
a defence company part-owned by Qatar's defence ministry,
agreeing in February to work with SAMI, its Saudi counterpart. 
    "If we did not have the political blessing from both sides,
we would not have this opportunity to work together," said
Barzan CEO Abdullah Al-Khater.  
    Riyadh aims to spend half its arms budget domestically,
which represents "something huge" for Barzan, he said. 
    "Stronger economic ties bind the interests of Qatar and
Saudi Arabia closer together in ways that overcome the issues of
the recent past and underpin the rapid improvement in the
political relationship," said Kristian Coates Ulrichsen, Gulf
expert and fellow at Rice University's Baker Institute.
    For Qatar, a top liquefied natural gas exporter, it is a
chance to strengthen ties with the most powerful Arab country,
and in the process try to diversify its economy. 
    In an example of a reversal of fortunes, entrepreneurs
Moutaz and Ramez Al-Khayyat had side-stepped the Saudi-led
boycott of Qatar by flying-in 4,000 milk cows to ease a critical
food shortage in the desert country.
    Riyadh had closed the border, choking off Qatar's main food
and dairy supply route to try to bring Qatar to heel. 
    The Syrian-Qatari brothers, who did no business with Saudi
Arabia during the Gulf rift, now have $7 billion worth of
construction projects in the pipeline inside the kingdom, Moutaz
Al-Khayyat told Reuters.
    They are hoping to double that amount, he added.
    "The door is now open."  
    Al-Khayyat, chairman of Power International Holding, a group
of more than 40 companies, now shrugs off the Saudi-led boycott
altogether: "It was a small period. An incident," he said.

 (Additional reporting by Pesha Magid in Riyadh and Rachna Uppal
in Abu Dhabi; Editing by Michael Georgy, Maha El Dahan, William
Maclean)