Tourism

PIF companies push ahead with Mecca expansion plans

October 2, 2024, 1:08 AM

Commercial development near Mecca's Grand Mosque can be sensitive and PIF keeps projects tightly guarded

PIF plans $10bn Mecca district
Two companies leading development
UK and German companies bidding

Saudi Arabia’s Public Investment Fund is building a vast commercial district in Mecca with an estimated value of $10 billion, giving the Islamic holy city a radical makeover.

After a series of ownership changes, two companies have emerged as the lead developers of commercial space around the Grand Mosque in Mecca – the 100 percent PIF-owned Rua Alharam Almakki and Umm AlQura Development & Construction, in which PIF last year acquired a 21.6 percent stake.

Umm AlQura is developing a 3.65km pedestrian boulevard, part of which is already finished, featuring shops, hotel towers and flats for ownership. The company has talked of 38,000 hotel rooms and 13,000 residential units.

Stretching out directly from the mosque, the boulevard aims to offer “balanced spirituality”, Umm AlQura says, placing Mecca “among the region’s model destinations”. Dubai-based Duncan & Ross are engineering consultants to the project.

Last year PIF invited bidders to submit plans to develop a second plot under the auspices of Rua Alharam Almakki.

Germany’s Lindemann Group confirmed it is among those asked to submit bids but it awaits the result.

UK architect RMJM has been asked to submit a bid for the Makkah Library complex, but declined to give details. PIF often requires vendors to sign non-disclosure agreements.

There is strong competition among Western architects, consultants and construction companies for Saudi contacts. French transport company Systra has been contracted to expand the Mecca metro that serves pilgrim sites to the whole city.

PIF’s Rua Al Madinah also opened bids last year for developing a recreation district in Medina, which contains the Prophet’s mosque.

More than a decade ago Lindemann won the first round of bidding for another plot, the Jabal Khandamah Mountain project, on a site overlooking the city.

The project has been in limbo since then but Saudi state media recently published a report suggesting it is about to kick into gear.

PIF tightly controls information about the projects and their ownership, which are considered sensitive because they involve touristic developments near the Grand Mosque. The mosque houses the Kaaba towards which Muslims around the world turn in prayer.

Construction has increased greatly in Mecca over the past decade, with controversial five-star hotels and luxury apartments overlooking the Grand Mosque catering to the rich.

But the major developer in the early stages, Jabal Omar, appears to have been crowded out by PIF-controlled entities under the Vision 2030 reform plan and after it was plagued by financial problems.

As well as Rua Alharam, Seven and Umm AlQura, PIF’s giga-project Roshn is building a residential district on the city’s outskirts called Almanar.

The government is on a drive for tourism to account for 10 percent of GDP by 2030, doubling religious visitors to 30 million.

PIF’s entertainment company Seven is also slated to build a cinema complex in Mecca, though it is not clear which development it will come under. Cinemas opened in Saudi Arabia in 2018 after clerical opposition kept them out of the country for decades.

“Soon in Mecca the biggest cinema house,” a Saudi engineer said in a recent video post on X, taken at the Seven construction site. “As you see, it will be here, with more than 75 international companies taking part.”

The massive expansion of Mecca has also resulted in old districts being levelled. These included, in 2002, an Ottoman era fort and the small rocky hilltop it was on, to be replaced by luxury skyscraper hotels, including one designed to look like London’s Elizabeth Tower – popularly known as Big Ben.

“Masar Makkah and Rua Alharam Almakki are set to have a significant impact on the local job market and economy,” said Ghada Aldawood, human resources manager at TASC Outsourcing. “As these projects progress, they will bring about a notable shift in skill requirements, for upskilling of the local workforce.”