City is symbolic of King Abdullah's vision and will create its own chapter in the annals of the GCC, says Sheikh Mohammed, Dubai Crown Prince SAGIA facilitated SR100 billion investment is single largest from private sector Emaar is master developer of City north of Jeddah 500,000 new jobs to be created; construction to begin tomorrow 30% of equity for IPO
In what is considered the single largest private sector investment in Saudi Arabia, the announcement of the 'King Abdullah Economic City' to be built at a pristine location off the Red Sea in the north of Jeddah with an investment of SR100 billion ($26.6 billion), is a signal of the dawn of a new era of economic prosperity for the citizens of the Kingdom.
The project, which will be a New Age City being built today for tomorrow's generation of Saudi citizens, was officially launched by The Custodian of the Two Holy Mosques King Abdullah bin AbdulAziz AlSaud in the presence of HRH Prince Sultan bin Abdulaziz AlSaud, Saudi Crown Prince, Minister of Defence & Aviation and Inspector General, and His Highness General Sheikh Mohammed Bin Rashid Al Maktoum, vice president, prime Minster and Ruler of Dubai.
"The King Abdullah Economic City will be another jewel in the crown for Saudi Arabia and a shining example of what can be achieved for the common good when two brotherly nations get together for ever closer co-operation," said HH General Sheikh Mohammed. "I am certain that what will be achieved through this project will create its own chapter in the annals of the GCC.
The King Abdullah Economic City will be a multi-stage development with construction beginning on Wednesday, 21 December, 2005. This mega project will closely integrate itself into the Kingdom's on going drive to expand the economy, create employment opportunities for its youthful population and function as a catalyst to attract foreign investment, global trade, commerce and industry. Based on initial forecasts, the project and its several components will create up to 500,000 employment opportunities in the various industries and service oriented companies that will open in the City.
The City will be a mixed use development located north of the commercial hub of Jeddah to ensure easy access from the Holy Cities of Makkah and Madina. A massive 55 million square metres of greenfield land with a 35 km shoreline close to the industrial city of Rabegh has been earmarked for the master development. The City will have six distinct components - a modern world-class Seaport, Industrial District, Financial Island, Education Zone, Resorts and The Residential Area.
Completion of the overall project will be done in stages with the first batch of businesses and residents moving into the City in a period of 24 to 36 months.
Emaar Properties, the world's largest real estate company in terms of market capitalisation, is the master developer of this ambitious project, the biggest outside of its home market of the UAE. SAGIA (Saudi Arabian General Investment Authority), the apex body responsible for inward investments into the Kingdom, is the prime facilitator for the development.
SAGIA's Investor Service Centre will facilitate the provision of services to potential investors. The Centre is SAGIA's "onestep" solution aimed at minimizing the number of formal steps associated with investment in the Kingdom.
Central to the mega project is the creation of a 2.6 million square metre new Millennium Seaport similar in size to the world's top 10 ports, such as Rotterdam, that would allow even the world's largest super vessels to drop anchor. With its strategic location on the Red Sea and the instant access to key cities within Saudi Arabia, the port will have a designated area for light industry and logistics and be a natural platform for onward movement of goods to Europe, Africa, Asia and beyond. The port will have an integrated transport system with seamless high speed transitions from sea to rail, road and air, making the City the main gateway to the central and eastern provinces as well as the entire Kingdom.
The port, with its close proximity to the two Holy Cities of Makkah and Madina, will have a dedicated Hajj terminal that can receive over 500,000 pilgrims every season.
To cater to the pilgrims' every need, there will be adjoining hotels, medical centres and other world-class amenities.
The second component of the City The Industrial District will cover 8 million square metres, and is exclusive to the requirements of a range of manufacturers small, medium and large scale industry. They will represent sectors such as downstream petrochemicals, pharmaceuticals, research and development activities as well as a host of educational institutions that will prepare young Saudis for the jobs that the City will bring in. A sizeable area has also been set aside to develop accommodation for employees and their families.
The waterside Resort will serve up a most compelling mix of waterfront hotels and boutique residences. The master plan envisages 3,500 well appointed hotel and residential bedrooms and suites, premium villas, plus an extensive retail element and an international-class signature 18 hole golf course and an equestrian club.
The fourth element of the City will be the Financial Island, conceived to be a 'city within a city' for financial institutions.
The Island will offer 500,000 square metres of office space for the leading international and regional financial entities, business hotels and a new exhibition and convention centre.
Up to 60,000 professionals are to operate from the Financial Island on a daily basis.
Financial Island will be topped by two towers reaching up to 100 and 60 storeys that offer compelling views of the surrounding city skyline.
Three residential districts form the fifth component of the new City. The first district wraps itself around a town centre, which will be a blend of the traditional and the modern. The second district will have a corniche as its main theme. It is in keeping with this concept that the district will 'curve' around a top of its class marina and yacht club with 450 boat moorings.
The souq and retail elements will contribute 350,000 square meters of prime space. Around 75,000 residents are expected to live here. The third district will be a secluded residential community set on an island on a choice water location.
The sixth component is the Education Zone which comprises of Universities, Schools and Research & Development Centres.
Headed by Emaar, a group of giant Saudi and UAE companies has been formed to facilitate investments for the project. The group includes companies such as: Aseer Company for Trade, Tourism, Industry, Agriculture, Real Estate and Construction, as well as Saudi Binladen Group. 30% of the equity of the company will be offered in an IPO in due course.
"It is no coincidence that the City is being formally launched, as Saudi Arabia has now become a part of the World Trade Organization. The City is one of the most impressive projects Saudi Arabia has attempted in the New Millennium. The fact that we were able to move ahead with this project on a fast track basis shows that Saudi Arabia is moving ahead with confidence to transform the economy and build more sustainable prosperity for its citizens," commented His Excellency Mr. Amr Al-Dabbagh, SAGIA Governor.
He explained that this project will have a major role in attracting the Saudi and foreign investment and assured that all necessary licensing procedures will be done within one week of application in coordination with other concerned government departments. Al-Dabbagh also stressed that the project will fulfil SAGIA's ambitious plans and it will help promote Saudi Arabia as an international investment destination while pushing forward the Saudi economy into a new phase of adapting international standards. The private sector involvement in this project will create huge job opportunities, with no additional cost on the Saudi government except for the services and facilities, which will be provided by SAGIA and other government departments.
Mr. Mohamed Ali Alabbar, Emaar Chairman, said: "The six components seaport, industrial district, education zone, financial island, resorts and the residential area of the City will work seamlessly together to make it an important global destination and a focus area for the development of both heavy and light industry, services in various sectors and bring in a greater level of local investment as well as regional and international Foreign Direct Investment into the Kingdom and thus more job opportunities for Saudi youth.
"This City will be a world class location to work, live and play and a shining example for Saudi Arabia's transformation into a global economic powerhouse and further consolidate its position as the Middle East's largest economy."
"In the past decade, Emaar Properties has built experience and knowledge on how to transform the power of ideas into reality. The company is now honoured to be part of the great leap forward that brings together the people of Saudi Arabia and the UAE," Mr. Alabbar said.
"The King Abdullah Economic City with it six distinct components is a project whose time has come. It will add tremendous value to the on going economic reform process driven by the Saudi Government and bring a host of opportunities aimed at the prosperity of Saudi citizens," Mr. Alabbar concluded.
Prior to the launch phase, SAGIA had taken a number of steps to ensure a successful launch of the biggest economic city in the Middle East, including a case study of similar examples such as Yanbu, Al-Jubail, Dubai, Ireland and Malaysia. Constructing a private sector financed economic city, is one of the successful strategies to achieve a regional, balanced and sustainable development. Cities have already been identified within a number of regions in Saudi Arabia to establish international, export-oriented industries including Hakkel (in the North West), Jazan (in the South), Ras Elzor (in the East), Rabegh (to the West), and Hayel (in Mid North).
A committee of international consultants was entrusted to study the economic feasibility of the project.
With positive results, Rabegh city has been chosen because it already has major ongoing projects, a strategic location on the Red Sea close to international maritime routes, and instant access to key cities within Saudi Arabia (Makkah, Al Madina, Yanbu and Jeddah).
The development of these areas comes as one of the main six strategic roles for SAGIA which include the realization of balanced economic development for regions.
This is hoped through the promotion of investments in sectors with a competitive advantage to help accelerate growth within the respective regions and in order to curb migration to larger cities. SAGIA's other five roles include:
Facilitation: SAGIA's promise to investors begins by providing comprehensive transactional support services that transcend licensing and extend through to the completion of a project and beyond.
Investor to Opportunity Matchmaking: Targeted and focused matchmaking defines SAGIA's marketing and promotion activities.
Special Incentives for Entrepreneurs: Feeding the leaves and branches of a healthy economy requires cultivating an entrepreneurial spirit. SAGIA does this by partnering with The Centennial Fund, a national, non-profit foundation dedicated to mentoring and funding Saudi entrepreneurs.
Dedicated Sector Services: SAGIA offers its comprehensive investment facilitation package to all investors seeking opportunities in any of the economy's open sectors.
To maximize the Kingdom's competitive advantages and set the stage for further economic diversification, however, SAGIA dedicates sector-specific resources and services in Strategic Business Units.
Pro-Business Advocacy: Being competitive in the global economy means a business environment characterized by healthy practices, policies, and procedures.
© ACARI 2006
