Jeddah Tower progressing despite delay, says executive

The world's tallest tower is the latest project delayed by the slowdown in Saudi Arabia’s construction sector. Jeddah Tower's completion date has been rescheduled to 2020 from 2018 due to financial difficulties at Saudi Binladin Group, the main contractor on the project. However, Hisham Jomah, chief development officer at Jeddah Economic Company, tells Argaam that work on the tower is progressing.

Q: Can you elaborate on the progress made so far on Jeddah Tower?

A: With all design works complete, the extensive Tower foundation construction works have also been completed and the past 12 months have seen the Tower structure rise steadily through the initial challenging main structural levels and the Central Core has progressed to Level 39 (164 metres high).

This represents circa 17 percent of the overall building height, with over 25 percent of the overall concrete volume of the tower having been poured. The Tower is now prominent on the city skyline and is clearly visible from downtown Jeddah.

Q: How has Saudi Binladin’s financial woes affected the project, since they are the main contractor?

A: It is clear from many media reports that Saudi Binladin Group has reportedly been suffering financial difficulties. This has had an impact on the planned levels of productivity over the past few months of construction. However, we are in a position to “ring-fence” the Jeddah Tower project due to the independent finance arrangements that are in place.

Q: What is the status of the wider Jeddah Economic City (JEC) project?

A: Master planning for the surrounding Jeddah Economic City (JEC) has received preliminary approval from the Jeddah Municipality. Retail consultants have been appointed with workshops being held to fine tune the retail master plan. Several projects are on the drawing boards including the Jeddah Tower sales centre, British school, Mosque, and a Water Feature. Master Developer guidelines [have been] prepared for use by sub developers.

SAR 8 billion funding has been secured for the project, and business plans for the City are well-developed.

Q: How do you expect Saudi Arabia’s Vision 2030 strategy to affect real estate investments?

A: It is clear that [Vision 2030] will have a very positive impact on the kingdom’s real estate market. In particular, the move to seek to improve living and working conditions for non-Saudis by extending their ability to own real estate in certain areas, permitting the establishment of more private schools, and adopting an effective and simple system for issuing visas and residence permits will undoubtedly attract investment as the kingdom looks to increase the number of visitors.

Q: What is your outlook for Saudi Arabia’s construction sector, given the slowdown in the wider construction industry?

A: The outlook for Saudi Arabian construction remains bright as the industry’s output value is forecast to rise over the forthcoming years. However, we all acknowledge that continued low oil prices present major downside risks to the forecast.

As stated in Vision 2030, we anticipate that construction sector growth will be supported by increased government participation and investments in sectors such as healthcare, education and infrastructure construction to diversify the country’s economy away from oil and to support economic growth.

Write to Jerusha Sequeira at jerusha.s@argaamnews.com