Riyadh to sign tower deals worth $10bn

15 September 2008
Design and build contracts for King Abdullah Financial District to be awarded by the end of September.

More than $10bn worth of construction contracts are set to be signed in the coming weeks on the development of the King Abdullah Financial District in Riyadh.

MEED understands that contracts for a total of 10 high-rise towers are due to be awarded by the end of September, with the winners expected to include the local Saudi Binladin Group, El-Seif Engineering & Contracting and Saudi Constructioneers.

The signings came after several months of delays due to changes in the project masterplan.

Saudi Oger has secured a SR1.4bn ($373m) design and build contract with the client, the Public Pensions Agency, for two towers, a hotel and an office block, which it expects to sign in the coming weeks. The US’ Goettsch Partners and KlingStubbins are working on the tower design for Saudi Oger.

The King Abdullah Financial District has been delayed by six months because of modifications to the original masterplan. When completed, it is intended to become the largest business zone in the Middle East.

Bids were due to be submitted in April for the first construction contracts, but were withheld while a review was finalised.

One source close to the project says the original road system has been re-evaluated and the schedule revised for building elements of the scheme. In a bid to reduce logistical problems on site, each contractor will now be allotted a single zone in which to work.

Previously, the masterplan allowed for each contractor to work in several locations across the development site, leading to concerns over co-ordination issues.

“They seem to have finalised the plan,” says one contractor close to the project. “And construction is due to start immediately after Ramadan. The design of the buildings is yet to be completed, however.”

The $7.8bn project is located in the south of Riyadh. It will cover 1.6 million square metres and be home to the Saudi stock exchange (Tadawul), the Capital Market Authority, which regulates activity on the market, and a financial academy for 5,000 students.

The original masterplan was approved by the executive committee of the King Abdullah Financial District in March 2007 and comprises three areas defined by use.

One area known as the Leaf is mixed-use, with 23 per cent planned for residential use, 5 per cent for retail space and the remaining area taken up by offices. The northwest of the district will feature support services, utilities and parking, while the south will comprise residential and office accommodation.

Denmark’s Henning Larson Architects is responsible for the masterplan in collaboration with the local Omrania. The US’ Hill International is the project manager for the scheme.

According to the original plan, work was due to be completed by the end of 2013.

Once finished, it will have to compete for market share with other growing financial clusters around the Gulf, including Dubai, Doha and Manama.

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