In 2005, Saudi Arabia unveiled what was then a $27bn redevelopment of the holy city of Mecca to allow it to welcome 4 million pilgrims at a time by 2040. While the city boasts a number of ongoing construction, infrastructure and transport projects, the initial vision for 2040 has not been as streamlined as hoped. With delays on several major projects and increasing numbers of visitors, the authorities must ensure that construction performance and delivery deadlines improve.
Spending on religious tourism is not as volatile or as susceptible to competition from other destinations as tourism spending in general, but the country must continue to press ahead with redevelopment and expansion plans to ensure it can accommodate inevitable growth.
There are $31bn-worth of projects either planned or under way in the wider province of Mecca, according to regional projects tracker MEED Projects. At the heart of Mecca citys expansion is the authorities aim to ensure it can handle the high number of tourists visiting Mecca for a very short period of time during the annual Hajj and Umra pilgrimages.
Throughout 2014, some 10.4 million domestic trips were made to Mecca, a much higher figure than any other city in the country. The capital Riyadh was the next most popular destination, with 3.1 million trips.
The flagship project that has come to define the redevelopment of the city is the expansion of the Grand Mosque. Also known as Al-Masjid al-Haram, it is already the largest mosque in the world and is being expanded in several phases. Now in its fourth expansion stage, the Grand Mosque will eventually cover an area of 300,000 square metres (sq m).
The project has not been without controversy, however, as it has included the demolition of some ancient buildings. Saudi Arabia has a long history of disregarding historic sites and artefacts as part of Wahabi adherence to the tenet that nothing should be worshipped other than God, and critics of Saudi Arabias stance on historic sites say the pace and range of destruction has recently increased across the kingdom.
The second phase of the mosque expansion covers about 25,000 sq m, almost double the area of the first phase, and has the capacity to accommodate up to 75,000 pilgrims an hour performing tawaf, the circling of the kaaba. It includes the reconstruction of Al-Fatah Gate, the surrounding area and the outer area facing the northern courtyard. A mezzanine floor for pilgrims with special needs is also under construction.
The local Saudi Binladin Group, which is working as the main contractor on the project, has confirmed that the development is in the final stages of construction and should be complete by the second half of 2016.
Before the main expansion was announced in 2011, previous extensions included the enlargement of piazzas, surrounding areas and prayer areas to prevent stampedes taking place due to overcrowding at focal points of the pilgrimage.
The masterplan for developing Mecca also focuses on real estate projects. In early November 2013, the local Rezaik al-Jedrawi Company was awarded a SR313m ($83.5m) deal to build the first phase of the Al-Waha Community, a middle-income housing scheme expected to be completed in July this year. This will cover some 180,000 sq m and comprise 650 units.
The $20bn Mecca Gate development, planned by the local Al-Shamiyah Urban Development Company on the western outskirts of Mecca city, will provide homes for about 600,000 people once complete. Progress on this project has been slow, with infrastructure designs under review by local consultant Khatib & Alami Saudi.
In addition to this, the local Jabal Omar Development Company is constructing a 2.5 million-sq-m project called Jabal Omar, near the Grand Mosque. The development will include 37 towers, including hospitality, residential, retail, commercial and religious facilities. Upon completion, it will accommodate 30,000-40,000 residents and will be able to handle 8 million pilgrims walking to the mosque from the projects residential and hotel zones and surrounding areas.
Saudi Arabias government wants to make it easier for pilgrims visiting Mecca to move around the city and its holy sites. A number of schemes are planned or under way, including the King Abdulaziz Boulevard project, which includes a 4 kilometre walkway so that pilgrims can move from rail stations through the Jabal Omar area and into the Masjid al-Haram. The complex will include two metro stations and underground walkways, along with residential, retail and hotel facilities.
US-based Hill International has been the project manager on the development since 2010; in January 2014, UAE-based Ruwad Construction Company was awarded the estimated $800m contract to build the fourth phase of King Abdulaziz Boulevard.
King Abdulaziz Bouelvard walkway
Further to this, in January this year MEED reported that Jabal Omar Development Company signed a SR4bn loan facility to refinance the construction costs of the first phase of its real estate development.
National Commercial Bank provided the funding, which refinances a previous facility signed with six Saudi Arabian banks in September 2012. The new facility provides better financing terms with an extended repayment period of 15 years rather than 8 years. This includes a grace period of three years, with repayments due to start on September 2017.
The loan is due to be repaid using the anticipated returns from five hotels that form part of the first phase of the project, in addition to commercial rental income and the sale of some residential units.
Authorities in the kingdom have been facing internal and external criticism over the pressure that major mixed-use developments in the centre of the city are putting on Meccas strained infrastructure. It will be interesting to see whether Saudi Arabia decides to address these complaints through improved urban planning mechanisms, or simply ignores calls for a slowdown in major commercial developments.
Another big part of the citys redevelopment has been the major upgrade to rail and road links in and around the Mecca area. Central to the transport plan is the Mecca Metro, one element of the wider Mecca Public Transport Programme (MPTP), which also includes a bus network.
The metro was originally planned to be developed on a public-private partnership basis. However, in December 2012, MEED reported that the kingdom had dropped these plans.
In July 2013, US firm Parsons Brinckerhoff won the $93.6m project management office contract for the MPTP. The Mecca project is one of three major upcoming metro schemes planned in the Western Province cities of the kingdom, and comes on the heels of awards on the Riyadh and Jeddah metros.
As well as the metros, the Haramain High-Speed Rail Network was announced in 2009, which will link Mecca with the cities of Medina and Jeddah. It will be 450km in length, with five stations (Central Jeddah, King Abdulaziz International Airport in Jeddah, Mecca, Medina and King Abdullah Economic City in Rabigh) along its route.
However, the scheme has faced delays in the past couple of years. In April, MEED reported that Saudi Railways Organisation had warned the Saudi/Spanish-led consortium Al-Shoula Group that it may be removed from the Haramain Railway project if delays continue to slow down progress.
Following a visit from Saudi Arabias Transport Minister Abdulla al-Muqbel, the Al-Shoula Group has been told to produce an alternative emergency plan to compensate for the delays to the scheme. The consortium is working on phase 2 of the project, with phase 1 nearly completed and a trial run expected in the next couple of months.
A source close to the project tells MEED that tensions have been rising since late last year, when the client issued a similar warning that it would remove Al-Shoula if performance didnt improve.
Phase 2 is considered the most challenging part of the project. It covers the building of railway tracks; the installation of signalling and telecommunication systems; electrification; building the operational control centre; the purchase of 35 trains; and the operation and maintenance of those trains for 12 years. It also requires that a centre be set up to train Saudi graduates in the field.
The contract for phase 2, worth SR30.8bn, was signed on 14 January 2012. The project is being funded by Saudi Arabias government-owned Public Investment Fund.
While many of the major projects in Mecca and the wider region have pressed ahead, with some nearing completion, there have been delays a situation that will not be helped by falling oil prices and reduced government spending. Nevertheless, a growing Saudi population and increasing visitor numbers mean the city must continue developing and expanding, even if the vision for the streamlined masterplan announced in 2005 has been lost.
Further to this, the authorities continue to face pressure from traditionalists and leaders from the wider Muslim world, who are concerned at the continued development and modernisation of the holy city, with many calling for a slowdown in the construction of major towers, mixed-use developments and lucrative retail and dining units around the Grand Mosque.