The Jeddah Tower, formerly Kingdom Tower, is a skyscraper under construction in Jeddah, Saudi Arabia anticipated as being the tallest building in Saudi Arabia upon its completion. The tower that sits on 50 hectares is one part of a three-phase development called the Jeddah economic City being developed by the Jeddah Economic Company (JEC), a consortium of three companies and one individual. The tower has faced numerous issues and developments during its construction that are the focus of this paper that also seeks to proffer some actions that the project manager should take next.
The design contract was awarded to Adrian Smith + Gordon Gill Architecture, the world-famous firm formed after the merger of two other firms, one which had also designed the Burj Khalifa. Although there were many bidders for constructing the project, the Saudi Binladin Group was chosen to construct the project, partly because it is a 16.66 per cent shareholder in the developer and also because it had a low bid of $1.23 billion, even lower than the $1.5 billion used for the Burj Khalifa. Finland’s KONE Corporation was awarded the contract for constructing and installing the elevators as it is the only company that has the capability to construct elevators with a speed of 10 meters per second with double-decker elevators as specified in the project requirements (Sequeira). Besides, it uses ultralight UltraRope technology believed to increase the sustainability of the project. The Saudi Water Company was also awarded the contract to supply water to the project while an EC Harris/ Mace joint venture team was appointed as project managers.
Construction work on the project began on April 1, 2013, although preliminary work such as geotechnical investigation had begun as early as 2008. The 2013 commencement time was also late since there had been statements in the media claiming that construction would begin as early as August 2011. Work above ground started in September 2014, and as of 7 July 2016, the project had reached its 44th floor with a floor being completed every 5 days. Other work such as the fitting of elevator guiderails has already been done. The project which was expected to be completed in 2017, later pushed to 2018, is now expected to be completed in 2020 due to delays.
Over the course of its construction, the project has experienced delays due to financing issues as well as funding issues with the contractor. The project which started in 2013 was only able to get up to speed after it received an 8.4 billion Saudi Riyal ($2.2 billion) financing deal with Riyadh-based bank Alinma on December 10, 2015 (saudigazette). The project also hit a delay in early 2016 after the contractor faced cash flow issues after the government suspended it from bidding. The government had also suspended payments to numerous contractors as it prepared its National Transformation Plan, and Binladin had to lay off workers (Fahy). Work on the project did not stall, however, but it continued at a slow pace leading to more delays.
The tower which is expected to have over 439 apartments, 200 hotel rooms, and 2205 parking spaces was received with acclaim around the world. The real estate boom in Saudi Arabia driven by a high population growth as well as a housing shortage especially for high-end units has seen apartments in the tower being sold as early as 2015. There is, however, a volatility in the market that causes the Jeddah Economic Company to consider three options; renting some, pooling some for rental, and doing investment funds on a few. The project will also include unique amenities such as the highest observation deck in the world in a bid to make it more attractive in the market. JEC is also keeping quiet about the actual height of the tower as well as the exact room count in order as a marketing tool.
What should be done next?
As earlier stated, over 50 floors have been completed which accounts for more than 20% of the project (Munro). To beat the expected project completion time of 2018, the pace of the project must be faster than the current rate of one floor every 5 days and while accounting for unexpected delays and the fact that work is expected to slow down as higher heights are reached, this seems highly unlikely. JEC thus has an option of hiring another contractor or increasing the capacity of the present one, but this would only lead to higher project costs, thus it is highly likely that JEC will announce a later completion date.
New contracts should also be handed out for building amenities such as windows, fixtures, and fittings as the project nears completion. Intense marketing should also be done to ensure that there are more sales so that by the completion date the occupancy levels will be high. This can be done through various platforms such as social media, digital media including television, and outdoor advertising. The project manager can also sponsor community events such as a desert rally as well as sporting events in a bid to enhance attention. Since the tower has also been deemed a community project, such sponsorships will enhance tolerance for the project that has elicited criticism from some circles including environmentalists. Extra funds should also be set aside to accommodate for emergencies such as the financial crisis with Saudi Binladin Group that led to a four-month delay as JEC secured a bank loan. The project manager should also ensure that the highest standards are maintained throughout construction to assure the project’s sustainability besides aesthetic appeal.
In conclusion, the Jeddah tower is bound to be the tallest building in the world upon its completion. The project which began in 2013 is over 20% complete and has an anticipated completion date of 2020 as a result of delays with financing. Extra funding has since been obtained and construction is expected to progress uninterrupted. As early as 2015, people had already begun purchasing apartments in the tower and the project manager should do more to market the project and ensure full occupancy. Contracts for the remaining works on the tower should also be handed out in due time to ensure there are no delays that may push back the completion time or add to the project costs.
Fahy, Michael. Jeddah Tower: Future world’s tallest building delayed after contractor problems. 16 May 2016. Web. 20 November 2016.
Munro, Davina. Saudi Arabia’s 1km Jeddah Tower 20% complete. 16 March 2016. Web. 20 November 2016.
saudigazette. Jeddah Economic City Project secures SR 3.6 billion funding. 16 March 2016. Web. 20 November 2016.
Sequeira, Jerusha. Elevator installation begins at Saudi Arabia’s 1km tower. 11 May 2015. Web. 20 November 2016.