A 380 billion won ($332 million) worth stock exchange center construction project in the King Abdullah Financial District (KAFD) in Saudi Arabia led by Samsung C&T Corp., the construction unit of Samsung Group, reportedly has been ceased for seven months due to the Saudi Arabia’s financial difficulties amid prolonged oil price downfall.

Saudi Arabia has been building its own the United State’s Wall Street-like financial hub in Riyadh, capital of Saudi Arabia, but the massive project has paused in the wake of the government’s financial troubles. The state-level construction project has been on halt at the 70 percent level of the completion, reflecting the fall of Saudi Arabia’s economy amid oil price slump.

According to Korean construction company sources and Bloomberg L.P. on Sunday, the Middle Eastern kingdom’s project to establish a financial hub in Riyadh that is targeted to be concluded next year has stopped at the 70 percent level of the completion. Saudi Arabia’s largest construction company Bin Laden Group and developer Al Ra’idah have co-headed the KAFD development project for Saudi Public Pension Agency (PPA), but they have stopped the work after PPA delayed making payments for the project. PPA in turn has notified Bin Laden Group and Al Ra’idah that it would cancel the contract if they do not resume the work within two months.

The KAFD is designed to become the largest financial hub in Middle East on 1.6 million square meters site with about $7.8 billion investment. The project is comprised of constructing 73 buildings including Saudi stock exchange and other developments such as housings, offices, exhibition halls, and hotels.

In 2012, Samsung C&T was named to build Saudi stock exchange center that would become the KAFD’s landmark together with Al Ra’idah with a plan to compete the construction by Sep. 2015. The Korean construction firm holds 60 percent stakes, or 230 billion won, of the project worth 380 billion won. “The company is placed in a situation to adjust the pace of the construction as the payment on the project has been delayed,” said an unnamed Samsung C&T official.

By Lee Ji-yong

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