Dubai-based Emaar Properties will not be investing any money in the SR100 billion (Dh97.8bn) project in the Saudi Arabian city of Jeddah, and is engaged in the project only as technical consultant and project manager, said the project's developer Kingdom Holding.
In a telephone interview from Riyadh with the Dubai-based Al Arabiya News Network, Talal Almaiman, Executive Director for development and domestic investments at the Saudi-based Kingdom Holding Company, said: "We are denying what was reported earlier that Emaar is engaged in this project as an investor. Emaar will not be an investor.
"The fact is they [Emaar] are to provide consultation in areas such as technical requirements, marketing, design, co-ordination with all the other parties involved in the project, managing and supervising communication between all participants, and project management as a whole. We have engaged Emaar because we value their experience in this regard very highly."
Almaiman said the cost "of what we have already done towards the completion of this project in the first year is SR1.5bn".
"And the total cost of the project, which is scheduled to be completed in 10 years, will be SR100bn. A 'Dream Team' has been formed to manage all aspects of the project –its financial, managerial and knowledge aspects. We have located the project on the Red Sea coast in an eco-friendly way."
Almaiman added that the project would comprise the Kingdom Hospital, schools, residential units and tourist attractions.
"I can confirm that, as previously announced, the project will also include the highest tower in the world," Almaiman said.
Financing will come through several channels, he added, by attracting new capital into the project, as well as contractors and loans. Apart from conventional channels, the financing would also be done by issuing sukuks.
"We are currently studying several options," he said.
Meanwhile, a Reuters report quoted Kingdom Holding as saying that it had signed a contract with Emaar Properties for development services through an affiliate that does not involve an investment by the UAE-based firm.
"Kingdom Holding confirms that there is a contract for development services between Emaar Properties and Kingdom Holding, representing Jeddah Economic Company," the firm said in a statement on the Saudi bourse website.
"Kingdom Holding also confirms that Emaar is not an investor."
Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.