By Angela Giuffrida www.thenational.ae
The contract to build what would be the world’s tallest building is expected to be awarded after the Eid holidays, with at least three international contractors vying to construct the 1.1km-tall Kingdom Tower in Jeddah, Saudi Arabia.
Six Construct, a Belgian company that helped to build the Burj Khalifa, and its Saudi partner, El Seif Engineering Contracting, are vying for the project against Australia’s Multiplex Construction and Saudi BinLadin Group, one of the biggest construction companies in the region.
This is the third time in a year that the companies have bid for the contract after they were asked to revise their offers to account for a fall in construction costs and a reduction in the size of the building’s podium.
Arabtec Construction, the UAE’s largest construction company, and its South Korean partner Samsung, which also helped build the Burj Khalifa, initially made an offer for the project but pulled out this year for “various reasons associated with the requirements”, Tom Barry, the chief executive of Arabtec, said in April.
“We gave our new bid recently … They are now negotiating with about three contractors and said the contract could be awarded after Eid,” said a senior member of staff at one of the contenders, who asked not to be named.
Saudi Oger, a major Saudi contractor, placed a bid in April, but it is unclear whether the company is still competing for the project. A senior executive at the firm could not be reached for comment yesterday.
The Burj Khalifa, developed by Dubai’s Emaar Properties, is the world’s tallest building.
It took more than five years to build after encountering a delay of about a year and opened on January 4 with a huge fireworks display that was broadcast across the world.
The tower, which has more than 160 floors and includes an Armani Hotel, is the centrepiece of Downtown Dubai, a development with an estimated value of Dh73.4 billion (US$19.98bn).
Kingdom Tower has been in the works for a number of years as part of the $26.6bn Kingdom City, a large project on the outskirts of Jeddah being developed by Kingdom Holding, the business conglomerate owned by the Saudi Prince Alwaleed bin Talal bin Abdulaziz Al Saud.
Emaar was hired last summer as a development consultant for Kingdom City, which will spread over 23 million square metres and is expected to be modelled on a design similar to Emaar’s Downtown Dubai community, including a mixture of residential, commercial and entertainment facilities. The development is expected eventually to house 80,000 people.
If the latest round of negotiations for the Kingdom Tower deal ends successfully, the contract will be among the biggest to be awarded in the Gulf within the past two years.
Although Saudi Arabia’s construction sector is among the most active in the Gulf, with dozens of contractors from the UAE seeking work there, progress on many projects has dragged because of a shortage of bank lending, while contracts have been slow to come to fruition.
Still, there are signs that the sector has turned a corner, with construction spending forecast to hit $50bn this year, up from $43bn last year, as the government tries to ease a housing shortage and revamp infrastructure, according to a report last month by the kingdom’s National Commercial Bank (NCB).