CAIRO -- Saudi Arabia took a key step forward Tuesday in its plan to build the world's tallest tower and outdo Gulf neighbor Dubai, which inaugurated its own record-breaking skyscraper less than two years ago.
The Saudis awarded a more than $1 billion contract for a spire that will soar two-thirds of a mile high, to be named the Kingdom Tower. It will have a Four Seasons hotel, serviced apartments, luxury condominiums and offices, encompassing, in all, about 5.4 million square feet.
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The plans make Saudi Arabia a front-runner in the race between the oil-rich Gulf nations for glitzy, architectural trophies that dot their desert territories with glimmering skyscrapers and elaborate, man-made islands. The projects are seen as status symbols to show off both economic success and cultural sophistication.
Kingdom Holding Co., the investment firm headed by billionaire Prince Alwaleed bin Talal, said it signed a 4.2 billion riyal ($1.2 billion) deal with the Saudi Binladen Group to build Kingdom Tower on the outskirts of the Red Sea city of Jiddah.
"The decision of the partners to build the world's tallest building further demonstrates their belief in investing in this nation," said Talal Al Maiman, a board member of KHC and the Jeddah Economic Co, a KHC-affiliate that signed the deal with the Binladen Group.
"We intend Kingdom Tower to become both an economic engine and a proud symbol of the Kingdom's economic and cultural stature in the world community," said Al Maiman. "We envision Kingdom Tower as a new iconic marker of Jiddah's historic importance as the traditional gateway to the holy city of Mecca."
The venture is also seen as a key part of Saudi ambitions to keep growth healthy by diversifying its economic base away from the crude oil that has fueled the economy for decades.
The tower, designed by Chicago-based Adrian Smith & Gordon Gill Architecture, is the first phase of the planned Kingdom City, a sprawling, $20 billion, two-square mile urban development project first announced in 2008 as the global financial crisis was squeezing world markets.
It is one of several ambitious mega-ventures in the kingdom, OPEC's top exporter.
Saudi has been planning on a number of major economic cities that would help create tens of thousands of new jobs as the country tries to ease its reliance on foreign workers in the professional fields. It spent billions of dollars on a new science and technology university that they hope will become the hub for scientific and technological development in the Gulf.
Alongside the glitzy projects, the Saudis are also pumping over $120 billion in the next few years into job creation and housing for their lower income residents.
In June 2009, KHC signed a deal with Dubai-based Emaar Properties to develop and oversee the construction of Kingdom City and Kingdom Tower.
Emaar, which is partly owned by Dubai's government, is the developer of the tallest building in the world Burj Khalifa.
That tower in Dubai, one seven semi-autonomous sheikdoms making up the United Arab Emirates, opened in January 2010 as the emirate was mired in a financial crisis stemming from billions of dollars in debts accrued from years of cheap credit and easy financing.
Alwaleed's proposed skyscraper would shatter the record for Burj Khalifa, which has 160 livable floors and includes a boutique Armani hotel.
At 2,717 feet (828 meters), Burj Khalifa is not only the tallest building but also the tallest freestanding structure in the world. By comparison, the tallest building in the United States, the Willis Tower in Chicago, stands at 1,451 feet (442 meters), although counting its antenna towers it rises to 1,729 feet (527 meters). The One World Trade Center tower being built in New York will measure 1,776 feet (541 meters) with its antenna spire. It's due for completion in 2013.
Dubai developer Nakheel had itself planned to build a tower more than 3,280 feet (1,000 meters) high in the city-state, but it shelved those plans in early 2009 as the global economic crisis soured demand for real estate in the emirate.
Under the deal with JEC, Saudi Binladen Group will hold a 16.6 percent stake in the Kingdom Holding Co. affiliate.
The Saudi construction giant is owned by the family of Osama bin Laden. The family disavowed the slain al-Qaida terror group leader years ago.
The company is developing a seven-tower complex in the holy city of Mecca that includes what is billed as the world's largest clock, set on a four-faced tower.