As the projects of Phase 1 in the development of King Abdulla Economic City (KAEC) proceed, Emaar, The Economic City (Emaar E.C,) has called off a contract with Al-Radwan Contracting to build 134 villas.
The houses were planned to be built with Spanish architecture, over-looking a 780,000 sq m golf course. Emaar attributed the change of plans to the reassessment of the project. In a statement released on Monday, on the Dubai bourse, the company stated that, ?This decision has been made after re-evaluating the cost of the project and the cost of City’s other projects.?
The Saudi developer, created from Emaar Properties, based in Dubai, had received SR 5 bn ($ 1.33 bn) loan from the finance ministry of the Kingdom of Saudi Arabia, in May to catalyze the construction of the city. Towards the end of 2008 it had awarded the contractors, Al-Radwan with SR 325 million ($ 86.7 m) for the construction of the villas. Particular structural frames and foundations had already been completed by the contractor and SR 58.6 m had been paid against the contract. However, it does not anticipate any adverse consequences to result from the cancellation.
The building of KAEC on the Red Sea coast of the Kingdom was started in 2006 and is set to be completed by 2025. It is located in between the two holy cities of Makkah and Madinah, 120 kilometers north of Jeddah.
The high-tech city has been planned by Saudi Arabian General Investment Authority (SAGIA) with the aim to broaden the reach of the Kingdom?s economy away from oil to sectors such as real-estate and finance. It spreads over 168 million square meters and on completion, it is expected to house over 2 million people and create more than a million jobs.