Drake & Scull said to be in SAR 200 mln dispute with Lamar Investment

Lamar Investment and Real Estate’s CEO Ahmed Halwani said that his company is in a legal dispute with Dubai-based contractor Drake & Scull over SAR 200 million, after the contractor failed to complete the Lamar Towers Project in Jeddah.

Lamar is considering several offers to reassign the project to a local contractor, and the project is expected to be finished in three years, he told Okaz newspaper.

In 2013, Drake & Scull was awarded a contract by Lamar Investment and Real Estate Development Co. to build two commercial and residential towers of 322 meters and 293 meters linked by a 13-floor curved podium. It was scheduled to be completed by the end of 2015.

The project was initially announced in 2007, but was halted in 2009. However, it has since been restructured and refinanced. Drake & Scull owns a 20 percent direct stake in the project, and 10 percent indirect stake through a partner.

Work in the project stopped in February, and many owners experienced delays in delivery. Halwani said up to SAR 360 million were injected in the projects, but only SAR 160 million worth of work was completed.

The off-plan project has been halted because only 38 percent of it was completed.

Several construction companies in Saudi Arabia and the Gulf region have been facing mounting pressure as low oil prices forced governments to cut spending, delay payments, and scale down or cancel projects.