Dallah Healthcare Holding Company said the purchase of land for its next project Dallah Hospital, in southwest Riyadh’s Namar area, cost the firm more than it was initially “supposed” to.
The 120,000 square metre piece of land, which the firm purchased in November 2013, cost $35.6 million, as opposed to company expectations of $23.3 million.
“The prices of building materials and costs generally increased due to the delay in the project following to the inflation,” Dallah said in a statement to Saudi Stock Exchange (Tadawul).
“The overall cost of the project increased from $134.4 million, as stated in the prospectus [Dallah Company Prospectus 2012] to $245.3 million,” the company was quoted as saying by Construction Week Online.
Accordingly, Dallah will finance the project with $96 million from the company’s IPO proceeds, $27 million from it’s operations and $122 million through lending from local banks, and the Kingdom’s Ministry of Finance.
In July 2014, Dallah announced the signing of an Islamic financing contract with the Saudi British Bank (SABB) for an amount of $254.7 million, for a total duration of six and a half years, to finance the construction of new hospitals for the company, including Dallah Hospital. Structural digging operations started on-site in September 2014.
Construction work is expected to be finished and start operating in two stages, the first of which is due by the third quarter of 2017; and the next in the third quarter of 2018.
This is at least a year’s delay on the project’s previous completion targets of 2016.
Total built-up area of the hospital, as described in Dallah’s 2012 prospectus, amounts to 75,000 sqm, excluding the construction of the hospital’s central utility plant.
Dallah Hospital is expected to boast a capacity of 300 beds and 80 clinics, besides a multi-storey parking building and other facility units.
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