Dubai: Saudi Arabia’s Public Investment Fund is likely to make an offer next month to buy Riyadh’s unfinished financial hub as the government attempts to rehabilitate a project plagued by delays and cost overruns.
The fund may pay about 30 billion riyals ($7.9 billion) — the amount already spent on the King Abdullah Financial District by the kingdom’s Public Pension Agency — plus the cost of undeveloped plots, a person with knowledge of the plan said, asking not to be identified as discussions are private. The plan includes a new company to oversee the project’s completion and management.
The financial hub, which is about 70 per cent built and due for completion in 2017, has suffered a series of setbacks. Its main contractor, the Saudi Bin Ladin Group, has stopped working on the project, while little space has been taken up in the 73 buildings being constructed.
Various plans are under consideration, while the project’s pricing structure may change, the person said. A spokesman for the hub’s developer Al Ra’idah declined to comment, as did a spokesman for the Public Investment Fund.
Saudi Arabia wants to make the PIF the world’s largest sovereign wealth fund, with more than $2 trillion of assets including ownership of state-oil company Saudi Aramco. That would make it big enough to buy Apple Inc, Google parent Alphabet Inc, Microsoft Corp and Berkshire Hathaway Inc
Makkah metro project delayed by financial restructuring -CEO
DUBAI: A $16.5 billion mass transit project planned for Saudi Arabia’s holy city of Makkah has been delayed so that its financing can be restructured, the head of the implementing body said on Wednesday.
The kingdom has been slowing infrastructure projects and paring back state spending as it grapples with the economic fallout of two years of depressed oil prices, which have created a huge budget deficit.
“The reason for the delay is some restructuring financially,” Ali Abdelfattah, chief executive-designate of the Saudi government’s Makkah Mass Rail Transit (MMRT), told a conference in Dubai.
Speaking more generally, Abdelfattah said that while work on privately funded schemes was largely unaffected in the kingdom, all government-funded projects were going through some sort of restructuring or replanning.
The Makkah plan includes building a metro rail system with 182km of track and 88 stations, according to an October 2015 document from MMRT, as well as a bus network. It was due to be completed in six phases over about 20 years. Major contracts for the project have not yet been awarded.
-Reuters
