Saudi Prince Alwaleed’s and Bakr Bin Laden’s Jeddah Tower dreams vanish
The over 1km high Jeddah Tower in Saudi, formerly known as Kingdom Tower, is just a couple of years from being completed, and when it does it will be a hugely celebrated moment in history, as it will eclipse UAE’s Burk Khalifa, the current title holder for world’s tallest building.
But the celebrations will likely be missing two of the project’s most prominent stakeholders and shareholders.
Investor, part owner, Prince Al Waleed bin Talal, and contractor, part owner, Bakr Bin Laden.
Both jailed, dragged into a seemingly never ending anti-corruption purge, more than 2 months in the making.
Both likely to be stripped of their shares in the project.
To think that this project almost never saw the light of day had it not been to those two men.
From financial rubble…emerges a dream
Forbes Middle East reported that just as the financial markets were beginning to crash in October 2008, Saudi billionaire Prince Alwaleed bin Talal announced he would build the world’s tallest tower, “but then failed to move forward on the project.”
It all changed in 2011 when in Riyadh, Alwaleed reactivated the idea.
“He signed a $1.2 billion contract to begin building what will be called Kingdom Tower in Jeddah, a building that will be taller than 3,280 feet (1km). The contractor for the project is Saudi Binladen Group (SBG), which is contributing $400 million toward completion of the tower,” said Forbes at the time.
Then trouble with funds resolved
In March 2016, following financing issues and numerous delays to the project since construction began in 2013, Jeddah Economic Company (JEC), the developer behind the 1km-high Jeddah Tower, said that it is looking to get back up to speed after funding issues with contractor SBG caused delays.
SBG holds a 16.66%t stake in JEC, while Prince Alwaleed’s Kingdom Holding has a 33.3% stake
At the time the completion date was slated to the end of 2019, or a delay of 1 year.
JEC secured a $2.27bn funding deal for the project from Riyadh-based bank Alinma, to ramp up activity and get back to a program where a floor of the tower can be completed once every five days, from 6-8 days average.
A 2020 horizon appearing
CNN reported recently that Jeddah Tower is to open in 2020 for a final estimated cost of $1.4bn, more than $200 million over cost.
“When CNN visited the site at the end of 2017, the tower was 252 meters (826 feet) high and already had expansive views of the kingdom,” said the US media who affirmed that JEC assured them of the 2020 date.
“The tower will be the crown jewel of JEC, a commercial and residential project of 5.3 million sqm, that will feature homes, hotels and offices, as well as tourist attractions.
All around the tower, rolling sand dunes will turn into a sprawling mega metropolitan center known as Jeddah Economic City development.
“As of 2020, we’ll start seeing things: you’ll see the tower, you’ll see the shopping mall, you’ll see many other projects,” Mounib Hammoud, CEO of Jeddah Economic Company, told CNN.
The tower itself will have a gross floor area of 243,866 sqm, over 252 stories, and feature the world’s highest observation deck at 664 meters high.
“Other facilities include a five-star Four Seasons Hotel and 97 affiliated serviced apartments, including seven duplexes. The elevators will reach a record height of 660 meters, while the double-decker lifts that take visitors directly to the observation deck from Level 1 of the building can travel at 12.5 miles per hour. In other words, they can shuttle guests to the deck, accessed from the 157th and 158th floors, in 66.5 seconds,” said CNN.
Doing hard times on Valentines
Prince Alwaleed bin Talal has reportedly been transferred to a maximum-security prison Al-Ha’ir after being held at Riyadh’s Ritz Carlton Hotel, according to sources quoted by Al-Araby Al-Jadeed news website and repeated by several media since.
The jail, located south of Riyadh, is the kingdom’s highest-security prison.
This is becoming more evident as the Ritz’s 492 rooms are set to reopen, according to Reuters.
“The luxury Riyadh hotel used as a prison during Saudi Arabia’s crackdown on corruption will reopen for business next month,” said Reuters, and this after dozens of princes, senior officials and top businessmen were detained and confined in the hotel following a November 2017 corruption crackdown by Saudi authorities.
“On Monday, an employee at the office taking bookings for the hotel, who declined to be named, told Reuters by telephone that bookings by the public would be accepted from Feb. 14, Valentines Day.
In a statement, a spokesperson for the Marriott hotel group, which owns the Ritz-Carlton brand, said: “The hotel is operating under the directive of local authorities and not as a traditional hotel for the time being.”
Saudi authorities have said Riyadh hopes to recover about $100 billion of illicit funds, but those who refuse to pay face prosecution.
Reuters said a source told it Prince Alwaleed is negotiating a possible settlement but a sum has not yet been agreed, though it was reported that the government was asking around $6bn, or a third of Prince Alwaleed’s wealth.
A second source familiar with Prince Alwaleed’s case told Reuters last Saturday that the prince had offered to make a “donation” to the Saudi government, which would avoid any admission of wrongdoing, and to do so from assets of his own choosing.
Meanwhile Reuters said that some of SBG’s shareholders might transfer part of their holdings to the state in a settlement with authorities for the release of Chairman Bakr Bin Laden and several family members with him in detention.
The Financial Times said SBG is working with a government committee on a restructuring plan to separate ownership from management and remains “optimistic” about the latest developments.
People close to the family said Bakr bin Laden has, along with his brothers, handed over stakes to the government.