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Tue 17 May 2016 12:06 PM

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Jeddah Tower 'delayed' due to Binladin Group funding issues

Saudi construction giant has reportedly lost billions since Makkah crane crash

Jeddah Tower 'delayed' due to Binladin Group funding issues

Financial pressures affecting construction giant Saudi Binladin Group have reportedly caused a year-long delay in building the 1 kilometre-high Jeddah Tower.

Formerly known as Kingdom Tower, Jeddah Tower is set to be the tallest tower in the world when completed.

It was scheduled for completion in 2018, and Arabian Business reported in March that it was over 20 percent complete.

However, it has since emerged that funding issues with contractor Binladin Group have disrupted the schedule.

Hisham Jomah, chief development officer at Jeddah Economic Company, the tower’s developer, told The National the scheme is now due for completion at the end of 2019 – 12 months later than planned.

He said the delay was “due to a number of factors – mainly the contractor [Saudi Binladin Group]”, according to the newspaper.

“Basically, it was 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 was quoted as saying.

Saudi Binladin Group has reportedly been suffering financial difficulties as a result of the fatal Makkah crane crash last year, and hundreds of staff have claimed they are waiting for several months’ worth of wages.

Work at the site did not stop since the crash but “came to a very low pace for three to four months”, Jomah revealed, adding that the developer is hoping to resume a programme through which one floor of the tower can be completed every five days. Right now, it is working at a rate of between six and eight days, he said.

 “It’s a very demanding project. It requires the best of anyone who comes close to it, and sometimes the best is not attainable.”

It was reported last year that Kingdom Holding, of which Jeddah Economic Company is an affiliate, had secured 8.4 billion riyal ($2.2 billion) of financing to complete the tower.

As well as being a contractor, Binladin Group holds a reported 16.66 percent stake in Jeddah Economic Company.

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