Shock as 'embarrassed' Saudi Arabia targets mighty Binladin group

A Western diplomat in the kingdom said authorities were "embarrassed" by the accident


Afp September 21, 2015
PHOTO: AFP

RIYADH: Saudi Arabia's decision to sanction the Binladin Group over the deadly Mecca crane collapse has come as a shock and could have serious consequences for one of the Kingdom's most powerful firms.

After decades of thriving on lucrative government contracts, the Saudi Binladin Group is facing unprecedented scrutiny over the accident, which saw one of its cranes topple during a major expansion of the Grand Mosque in Mecca, Islam's holiest site.

The September 11 accident killed 108 people and injured about 400, including foreigners who had arrived ahead of the annual hajj pilgrimage which begins on Tuesday.

Analysts say it deeply troubled Saudi King Salman, the official custodian of Islam's holiest sites, and prompted surprisingly swift action against the group, founded more than 80 years ago by the father of al Qaeda leader Osama bin Laden and now chaired by Osama's brother Bakr.

Read: Saudi king sanctions Binladin Group after deadly crane collapse

A Western diplomat in the kingdom said authorities were "embarrased" by the accident and expressed surprise that the company was sanctioned only a few days later.

"Ordinarily things move pretty slowly here," the diplomat said.

A preliminary investigation found that the group was partly responsible for the accident as the crane was incorrectly positioned when high winds struck.

Salman ordered prosecutors to prepare an indictment but also took immediate steps -- suspending the company from new public contracts and forbidding its executives from leaving the country, pending the completion of judicial processes.

Analysts said the sudden punishment of the firm was astounding given its huge size and longstanding ties with the Saudi authorities.

"It is shocking," said one Saudi analyst who did not want to be named, saying any moves to cause significant damage to the company would be like "America destroying General Motors".

Analysts said it was unclear how much of a long-term impact the accident would have on the firm, but it stands to suffer if the government turns against it.

The privately held Binladin Group is deeply embedded in the Saudi economy, though exactly how much it contributes is not known.

"Like most things in Saudi Arabia, its operations and finances are very opaque," said Jason Tuvey of Capital Economics, a global economics research company.

From unglamourous origins carving roads through the kingdom's mountains and deserts, the Binladin Group has become one of the largest building firms in the world.

"They are very much embedded in the economy, very well-connected," said another contractor with long-term experience in the local market.

From universities to airports to hospitals, the Jeddah-based firm has won government projects across the kingdom.

It has developed landmarks including the domed Faisaliah Tower in central Riyadh and the Mecca Royal Clock Tower, the world's third-tallest building.

The firm is also the primary contractor on Jeddah's $1.2 billion Kingdom Tower, which is to be the world's tallest building at more than one kilometre (almost 3,300 feet) high.

Attempts to reach company executives for comment were unsuccessful.

Analysts will now be watching the investigation to see if the group may be in danger of falling out with authorities.

Even before the accident, rumours had been swirling of potential unhappiness with the group.

Read: Timeline: Saudi crane collapse latest in string of Hajj tragedies

A widely followed Saudi "whistleblower", who uses the Twitter handle @mujtahidd, wrote in August that "the fate of the Binladin company is unclear".

"There are a lot of competing business interests here," the Western diplomat said.

A quick resolution of the investigation without major action against the firm would suggest authorities simply wanted to be seen as decisive after the accident, the diplomat said.

But if the probe drags on and the company continues to be sidelined, "there's probably business interests caught up there somewhere."

COMMENTS (2)

mumtazahmed | 5 years ago | Reply What about the workers' who hardly pay the fee and just arrived in binladin. There are many problems for them. They don't receive salary properly. If the company gone banned.I think king Salman , should order to binladin groups that gives naqal kfalah to the workers otherwise the workers faced most problems then the binladin group of companies. Or nobody wants to think about the poor workers.
sadiya jalal | 5 years ago | Reply I think the company is facing so much of problems because of their employees curse, since they are not getting paid. The company is saying that they are not getting any new contracts from the day King Salman came into power, so they don't have enough money to pay their employees. Even now there are many employees who have salaries pending. Before whenever the people wanted to leave for a better job they did not provide NOC to them, but now the company is telling who ever wants NOC can take and leave, but majority of people cannot leave the company as their salaries are stuck up there.
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