The country's largest construction company hopes to bid on the 100 billion riyal and 1.1km tower project in Jeddah.
Arabtec vies for Kingdom City
ABU DHABI // Arabtec, the country's largest construction company, hopes to bid for the 100 billion riyal (Dh98.06bn) Kingdom City and 1,100-metre tower project in Jeddah, a top company official says. Arabtec's chances of playing a role in the Saudi project have risen now that Emaar Properties, Arabtec's main building contractor in the Burj Dubai, has signed a deal to supervise the Kingdom City and Kingdom Tower project. "The project is one that we hope to be bidding on," said Riad Kamal, the chief executive of Arabtec, in an interview from Jeddah. "There is quite a lot happening here," he said, adding that the company was "absolutely" trying to drum up more business in Saudi Arabia as the property slowdown hurt companies across the region. Arabtec recently won a 2bn riyal contract to build Lamar Towers in Jeddah. The company now has 11 per cent of its Dh30.2bn contract backlog in Saudi Arabia, according to Al Mal Capital. "Emaar has prior expertise with the Burj Dubai, so it's a good fit," said Bobby Sarkar, a property analyst at Al Mal Capital. "It's possible Arabtec also benefits from this deal down the road." Kingdom Holding could not be reached for comment. Goldman Sachs last week raised its target price for Arabtec by 6 per cent to Dh3.77 on what the bank said was an improving regional outlook and higher oil prices. Arabtec's share price has risen by 34.9 per cent since the beginning of the year, closing at Dh3.05 yesterday. "We remain positive on the outlook for construction activity in the region as recent firmness in oil prices should provide further support to the construction activity," the bank said. "We believe Arabtec is well positioned to benefit from this trend, given its strong market position and track record." There is a shortage of two million homes in Saudi Arabia and a need for another 1.4 million over the next 10 years, according to a report from the property consultancy CB Richard Ellis. The country's population is expected to grow by another 33 million by 2020. Arabtec has lost some business in the wake of the global financial crisis as developers struggle to keep cash flowing. Dubai Meydan cancelled a Dh4.6bn construction contract with Arabtec and WCT Engineering to build a racecourse, claiming that the two companies failed to "abide by the time schedule for the completion". The companies are in arbitration over the issue. But Arabtec has secured several large projects in the past two months, including the US$436 million (Dh1.6bn) Nation Towers project from International Capital Trading in Abu Dhabi. email@example.com