Contract signed for work on world's tallest skyscraper Jeddah Tower

DUBAI - Real estate developers seeking to build the world's tallest skyscraper in Jeddah have signed a 620 million riyal ($165 million) contract for infrastructure work at the site, signalling the project will go ahead despite a weak economy.

The contract was awarded to local Al-Fouzan General Contracting Co and the work is to be finished within 12 months, Jeddah Economic Co, the consortium behind the project, said in a statement late on Wednesday.

Construction of the Jeddah Tower, originally projected to cost $1.2 billion, has been underway for several years and officials have previously said the building will be finished by 2020. In its statement, Jeddah Economic Co did not say whether that timetable was still on track.

The project, conceived when the Saudi economy was booming, now faces a more difficult environment, as the country's real estate market is slumping due to tough economic conditions caused by low oil prices.

Also, senior figures in two companies that are part of the consortium - investment firm Kingdom Holding and Saudi Binladin Group - have been detained since last November in Saudi Arabia's sweeping corruption probe. They are Kingdom chairman Prince Alwaleed bin Talal and Binladin chairman Bakr Bin Laden.

The award of the infrastructure contract suggests Saudi authorities are keen for the project to go ahead and do not want the probe to disrupt work.

The Jeddah Tower is projected to be over 1,000 metres (3,281 feet) tall, eclipsing Dubai's Burj Khalifa, which is over 828 metres.