The newspaper did not reveal the name of the contractor but quoted informed sources as saying that the company's shareholders have failed to find solutions to its financial problems.
The company will reportedly lose SR250 million it had paid to the Jeddah municipality as a fee for investing in strategic places in the area including the Khuzam Palace, the Khuzam Swimming Pool and a number of public parks. Makkah Gov. Prince Khaled Al-Faisal had given the company two months to resume work on the project before its contract was terminated.
The sources said a new consortium of companies with sufficient resources would take over the project. They expected the new contractors to start work next month.
The newspaper said the owners of the original company discovered that they did not have sufficient funds to cover all expenses of the scheme, which included compensating landowners living in the area to be developed and basic infrastructure costs. It said the sudden rise in the market price of real estate was another reason for the company’s inability to pay the owners of confiscated plots of land.
The sources held the company responsible for its problems, claiming it entered into the project without ensuring it was financially viable.
