Jeddah Economic Company exec says project delayed following funding issues with contractor Saudi Binladin Group – report
The developer behind the 1km-high Jeddah Tower in Saudi Arabia has said that construction will now be completed in 2019 – a year later than originally scheduled.
According to a report by The National, Hisham Jomah, the chief development officer of Jeddah Economic Company (JEC), confirmed that the project would be delayed following funding issues with contractor Saudi Binladin Group.
Jomah said JEC is looking to pick up the pace of work on the building, which is set to be the world’s tallest tower.
He explained that the delay in the project – formerly known as Kingdom Tower – was “due to a number of factors – mainly to the contractor”, namely the Saudi Binladin Group.
“Basically, it’s a financial problem. Until we secured a loan from the bank… to make sure that the cash flow for the contractor is more stable for the time schedule,” Jomah told the Abu Dhabi-based newspaper.
Saudi Binladin Group, having been hit by government spending cuts, has laid off tens of thousands of workers, amid widespread allegations of delayed salary payments.
While Jomah insisted that work on the Jeddah Tower site never came to a halt, he confirmed that it was “at a very low pace for a period of time of three to four months”.
JEC said in March that the building is 20% complete, with construction reaching the 37th floor.
That announcement came on the back of JEC’s launch of the Alinma Jeddah Economic City Fund in late 2015, which will provide sharia-compliant financing of 3.6 billion riyals ($959.9 million) from Alinma Bank for the project.
Mounib Hammoud, CEO of Jeddah Economic Company, commented at the time: “With financing in place, we are now on our way to achieve our set goals and to complete building Jeddah Tower and the infrastructure of Jeddah Economic City as per the five year plan developed by Jeddah Economic Company”.
In addition to being the contractor on the project, Saudi Binladin Group also owns a 16.6% stake in JEC.