Saudi Arabia’s Dar al-Hijrah has appointed South Korea’s Posco E&C for work on its $14bn Pilgrim City scheme.

The firm is working on package group 4A of the project, which will include five four star hotels with a total room number of approximately 3,000. The contract also includes landscaping and all other associated works.

Work on the project started in May although the contract was finalised this week. The contract is understood to be valued at approximately $900m and will last 28 months.

Dar al-Hijrah, owned by the Public Investment Fund (PIF) of the Ministry of Finance, is developing an integrated mixed-use development of 100 buildings, to accommodate 120,000 pilgrims and 31,000 employees.

Posco recently entered into partnership with the Saudi Public Investment Fund (PIF), which purchased 38 per cent (approximately $ 1.1bn) of the company. The partnership resulted in establishing PECSA, a new Saudi-Korean joint venture company that aims to be a player in the fields of urban development, housing and infrastructure construction in the country

The Pilgrim City development will spread across 1.6 million square metres along Hijrah road in Medina. The buildings include 76 four-star hotels and six five-star hotels and 80 residential towers. A 400-bed hospital will also be developed.

The development also includes 20 commercial and administration buildings, including government agencies such as the Central Hajj Committee.