World's First Height Challenge 'Jeddah Tower'
"Risk Very High but Low Business Feasibility"
South Korea's construction companies have decided not to participate in the resumption of the world's tallest building project being promoted by Saudi Arabia. It has been seven years since the construction was halted due to local circumstances in Saudi Arabia, and even if the construction resumes, they judged the project to have low profitability.
According to the construction industry on the 31st of last month, Samsung C&T, Hyundai Engineering & Construction, and Daewoo Engineering & Construction, which received bid invitations from Saudi Arabia's Jeddah Economic Company (JEC), did not submit bids for the 'Jeddah Tower' tender held on the 29th.
Jeddah Tower is the world's tallest building project promoted by Saudi Arabia in Jeddah, a resort city adjacent to the Red Sea, aiming to be the first in the world to exceed 1 km in height, reaching 1,008 meters (168 floors above ground). The construction cost alone is estimated to reach 1.23 billion USD (approximately 1.65 trillion KRW).
This is 180 meters taller than the current tallest building in the world, the Burj Khalifa (828m) located in Dubai, United Arab Emirates (UAE).
In 2013, the Saudi Binladin Group was responsible for construction and had built up to about 70 floors, but in 2017, due to the purge led by Crown Prince Mohammed bin Salman to eliminate opposition forces within the Saudi regime, and the resulting uncertain business conditions, construction was halted in January 2018.
This year, Saudi Arabia sent Invitations to Bid (ITB) to about ten construction companies including those from Korea, China, Austria, and Sweden to resume construction.
The companies invited to bid include domestic construction firms Samsung C&T and Hyundai Engineering & Construction, as well as △Al Mabani (Saudi Arabia) △Bawani (Saudi Arabia) △China Communications Construction Group (China) △China State Construction Engineering Corporation (China) △CCC (Lebanon) △Al Seif Engineering (Saudi Arabia) △MAK (Kuwait) △Nesma & Partners (Saudi Arabia) △PowerChina (China) △Saudi Freysinet (Saudi Arabia) △Skanska (Sweden) △Strabag (Austria), among others.
Samsung C&T, Hyundai Engineering & Construction, and Daewoo Engineering & Construction, ranked first to third in domestic construction capability, received the invitations and reviewed whether to participate. Among them, Hyundai Engineering & Construction and Daewoo Engineering & Construction decided early on not to participate in the bidding after reviewing the project's profitability and risks.
However, it appears that Samsung C&T, known as a 'super-tall building specialist,' had a longer period of deliberation. Although the risks in terms of profitability were significant, it was not easy to give up the title of 'tallest building constructor.'
Samsung C&T constructed the current tallest building, the Burj Khalifa in Dubai, and also built the second tallest building, the Taipei 101 (508m) in Taiwan.
Additionally, American architect Adrian Smith, who was in charge of the overall architectural design of Jeddah Tower, had previously collaborated with Samsung C&T during the construction of the Burj Khalifa.
Meanwhile, a construction industry official told Maeil Business Newspaper in an interview, "If a company participates in the bidding for the world's tallest 'Jeddah Tower' and secures the construction rights, it could leverage the title of 'tallest building constructor' to win other super-tall building projects domestically and internationally," but added, "Since the project was once halted and is now resuming, considering the risks alone, it would be difficult to participate."
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