JEDDAH, 18 October 2006 — The SR12 billion ($3.2 billion) Jabal Omar real estate project in Makkah entered a new phase yesterday with the Cabinet approving formation of a joint stock company to carry out the project.

The Cabinet meeting, which was held in Makkah on Monday night, also allowed the new firm — Jabal Omar Development Co. with a capital of SR6 billion ($1.6 billion), to float 30 percent of its shares for public subscription within 30 days. Jabal Omar’s initial public offering will be restricted to Saudis.

Abdul Rahman Faqeeh, chairman of Makkah Construction Company, which holds the largest stake in Jabal Omar, said the project would provide housing facilities for more than 160,000 pilgrims.

The project includes building of 40 residential towers, five-star hotels and commercial centers, construction of a road parallel to Um Al-Qura Road and parking for thousands of vehicles.

Makkah Construction Company had put a lot of efforts over the past 17 years to make Jabal Omar a reality. It has also won approval from the Makkah Development Authority to carry out the project. “All these efforts finally resulted in the Cabinet approval, said Faqeeh.

Faqeeh, who is a prominent Makkah businessman, said the project would take care of Jabal Omar’s topography. Hills in the area are now being flattened to start work on the project. He said the project would make use of domestic and international architectural expertise.

A number of new real estate projects are being implemented in Makkah to cater to the needs of increasing number of pilgrims who come for both Haj and Umrah.

According to Habib Zain Al-Abidine, undersecretary at the Ministry of Municipal and Rural Affairs, some 25 new real estate projects are being carried out in the central region including Jabal Omar, Shamiya and Khandama projects.

Economists say new real estate projects around the Grand Mosque will draw investments in excess of SR100 billion ($26.7 billion).