Mecca: A city in transition

28 September 2010

Investment in Mecca is booming as the government seeks to improve facilities and accommodate growing visitor numbers

Key fact

More than $25bn-worth of real-estate and construction projects are currently under way in Mecca

Source: MEED projects

There was much celebration in Mecca in early August as the giant clock on what will become the world’s second tallest skyscraper began ticking.

The Mecca Royal Clock Tower is intended to rival the Greenwich Observatory in the UK, which has set the time for the world for more than a century, and its start-up represented a significant milestone in the redevelopment of the holy city.

According to regional project tracker MEED Projects, there are currently more than $25bn-worth of real-estate and construction projects under way in Mecca. This is just the beginning of the investment planned; local government officials say some $125bn will be spent on projects in the city over the next decade. 

Construction of new transport links and accommodation blocks are the main priority as the government seeks to improve the experience of the millions of visitors that flock to the city each year. According to the Saudi Commission for Tourism and Antiquities, more than 2.5 million pilgrims performed the Hajj in 2009 and a total of 3.3 million religious tourists entered the kingdom that year. This year, the figure is expected to be almost 4 million.

Improving transport in Mecca

Most pilgrims arrive from Iran, Egypt, Pakistan, Jordan, Syria and Turkey and many complain that hoteliers and landlords charge exorbitant prices, which limits the time they can spend in the city. Even local Saudis say that staying within walking distance of the sacred Kaaba is an experience only the rich can afford. Consequently, many pilgrims lodge outside the city in Mina or Arafat.

In recognition of this, and the fact that travelling between these holy sites is a critical element of the pilgrimage, the government is improving transportation between these areas, with the $1.8bn Mecca monorail. China Railway Engineering Corporation is building the monorail for client Saudi Railways Organisation (SRO). It runs from Arafat in the south up to Muzdalifah and continues on through to Mina. The line will have nine stations and the capacity to carry 90,000 passengers an hour. SRO is aiming to open the first section of the line between Arafat and Muzdalifah in time for Hajj in mid-November 2010, with full opening in 2011.

A much larger rail project is also under construction. The $7bn Haramain high-speed railway will provide access to Mecca directly from Jeddah, reducing traffic on the road network. The railway will also run north from Jeddah to Medina via King Abdullah Economic City. Construction of the 444-kilometre line is being carried out in two phases and the initial $1.8bn civil works contract was awarded to the local Al-Rahji consortium in February 2009. China Railway Engineering Corporation, which is also building the monorail, is part of the consortium that also includes the local Mada Group for Industrial and Commercial Investment.

The next contract to be awarded will be for the construction of five stations, designed by UK architect Foster & Partners with structural designer Buro Happold. Eight consortiums were invited to bid for the $2.5bn contract. An award is expected by the end of the year. It is understood that three groups have been shortlisted, including consortiums led by Saudi Binladin Group; Saudi Oger; and Freyssinet Saudi Arabia.

The consortium led by Al-Shoula is the frontrunner for the package to supply track, signalling, power and rolling stock worth $2.5bn. The contract is also due to be awarded by the end of the year.

Modernising the transport network will improve the visitor experience in Mecca, but the government also has ambitious plans for the future growth of religious tourism. It wants the number of religious tourists to more than double to 10 million in the next decade.

Space constraints in Mecca’s central area have meant that to date visa allocations have been limited. Expansion is a priority, starting with the Haram complex, which is home of the Grand Mosque (Masjid al-Haram). This is currently being expanded by 400,000 square metres.

Grand Mosque expansion

The Hajj Ministry says the ultimate capacity of the Haram will reach approximately 1.2 million pilgrims from the 700,000 at present. Local construction giant Saudi Binladin Group is carrying out the $2.5bn project, which also involves air-conditioning the entire complex.

“The latest expansion started on 9 February, 2007 and is expected to take three years,” says the Hajj Ministry in a statement on the progress of the project. “The expansion will include ground, first and second floors. A mezzanine floor will also be added to the structure to add space and thereby reducing the volume of pilgrims at one place. The minaret on the Safa hill will also be replaced. The new one will be of the same height [95m], but the dome will be wider and thus more spacious.”

More than 3,000 people are working on the project 24 hours a day. The ministry says the biggest challenge is keeping the sites open for pilgrims, while carrying out the work. The first phase of works to expand the Masa’a area from 29,000 sq m to 87,000 sq m has been completed and now more than 100,000 pilgrims are now able to perform the sa’i (shuttling between the two hills of Marwah and Safa). To facilitate this expansion, more than 1,000 properties have been demolished and in excess of $1.6bn has been paid out in compensation to property owners in the affected areas of Abu Sufyan Street, Raquba, Abdullah Ibn Zubair Street, Shamiya, Jebel Hindi, Khaled bin Waleed Street and Shubaika.

In the short term, this has put even more pressure on accommodation in Mecca and, although a number of real-estate schemes are now under way, a shortage is set to remain for the time being. New housing and hotel projects are being planned to alleviate this.

The largest project under construction is the $3bn Abraj al-Bait complex being developed by Saudi Binladin Group. The firm’s subsidiary, Jiwar Real Estate has purchased a 25-year lease from the King Abdulaziz Endowment for the Two Holy Mosques.

The centrepiece of the Abraj al-Bait complex, which will include seven hotel towers is the 600-metre Mecca Royal Clock Tower. The project has been the subject of much local and international debate. Traditionalists protest against the continued modernisation of the holy city and question the need for the clock, which closely resembles European architecture.

But authorities remain committed to what they consider is a modernisation plan that will improve the facilities, environment and the safety of pilgrims. Some visitors are pleased that standards are being raised, with the introduction of luxury hotel chains such as the Fairmont hotel group. The Fairmont is taking residence in the Royal Clock Tower, opening 858 rooms and brands itself as “the finest luxury in the holy city”. The hotel was scheduled to open this summer, however it is not yet taking bookings.

Mega schemes in Mecca

Just behind the Abraj al-Bait complex, Saudi Binladin Group is also working on the $1.5bn Jabal Omar development.

“The project is currently about 20 per cent complete. There is a total of 37 towers to be built, including 12 hotels,” says John Spitz, senior vice-president at US consultant Hill International. The consultant was brought on board in September to take over project management of the scheme by client, the Jabal Omar Development Company. “Originally they were doing it alone, but they have decided to get a project management team in to help,” says Spitz.

The development is spread over a total area of 230,000 sq m. Construction is being undertaken on a design and build basis by Saudi Binladin and Saudi Oger. Completion is due in late 2012. “The project is already one year in, so it is challenging to come in and take the documentation in order. We are starting as if it is a new project,” says Spitz.

Other major real-estate schemes are also on the horizon such as the $9bn Al-Shamiyah project. Seven consultants are currently working on designs for the scheme, which is intended to provide housing for 134,000 people once completed in 2018.

The projects planned for Mecca are undoubtedly transforming the face of the holy city. While some may be resistant to change, the redevelopment is necessary to accommodate the growing number of visitors the city.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications