Aqaba celebrated its sixth anniversary as a special economic zone by announcing a "new and challenging" investment target and pledging to continuously promote the city to become a major foreign direct investment attraction for Jordan. Oula Farawati attended the celebrations.
Aqaba Special Economic Zone Authority (ASEZA) Chief Commissioner Nader Dahabi announced that the city has managed to attract $8 billion in investment so far, up 30% from the original forecast, which expected the coastal city to draw $6 billion in investments by 2006. Mr. Dahabi said the new target for Aqaba is investments worth $12 billion to be reached by the year 2020.
"Our new strategy is now focusing on responding to increasing international and Arab interest in investing here by vigorously providing necessary infrastructure for the many mega-projects coming here," Mr. Dahabi, a former Royal Jordanian chief, told invitees at the anniversary event.
ASEZA officials said they were working 24/7 to respond to investors' needs. Investments in the city are currently focused on real estate, tourism and housing projects, with the Hariri family alone pledging more than $6 billion in investments in two mega-projects, Saraya Aqaba and Horizons.
Mr. Dahabi said 2007 will be "a year of realization" for the port city with projects such as Saraya, Tala Bay, Ayla and Taameer taking shape.
The chief commissioner said that ASEZA's strategy was focusing on the tourism sector by 50%, industry by 20% and services by 30%. "We will focus on tourism because its results and revenues appear quickly and are more likely to positively influence the residents of Aqaba." ASEZA divided Aqaba into three major zones: the northern zone, which will focus on tourism; the southern zone, which will focus on industrial and logistics activities; and the central zone, which will remain as the city's trading and services area.
The three days of celebrations saw participants touring several real estate and tourism projects including Saraya Aqaba, Ayla, Tala Bay and Saraya Workers' Housing. They also visited Aqaba's southern part, home to the main port and the main logistics area.
Mr. Dahabi also announced that residents' relocation from the under-serviced area of Al Shalala to a new location, Al Karamah, will start in July. The Karamah housing project will provide upgraded housing for 10,000 inhabitants and was built by a JD21 million low-interest loan from the Abu Dhabi Fund for Development.
This projects remains a contentious issue for the ASEZA as inhabitants of the Shalala remain reluctant to relocate. Residents have voiced concerns that they will not be able to afford the new housing payments required by the ASEZA. Mr. Dahabi would not comment on these requirements, but said the payments will be "negligent" and that the ASEZA will ensure that the new houses will not be used for commercial purposes. Al Shalala area, he added, is being studied and most likely will be turned into a green zone.
According to ASEZA stats, the population of Aqaba has doubled from 50,000 citizens in 2001, to 100,000 this year. The increase has resulted mainly from rising tourism levels and commercial activity, which has attracted thousands to Jordan's only sea port. Mr. Dahabi said that the population increase prompted ASEZA to create 20,000 jobs by 2020, an aim supported by increased tourist, commercial and industrial activity and designed to alleviate an unemployment rate that hovers around 14%.
Forging ahead
Meanwhile, the Aqaba Development Corporation (ADC) announced that five international companies have applied to relocate to the Aqaba Port, a project that is expected to cost in the vicinity of $3 billion. The ADC, the central development company responsible for the Aqaba Special Economic Zone, is overseeing the relocation of the port, a scheme aimed at making the post closer to the Saudi sea borders and evacuating the central shore to enable it to attract investments from various sources, particularly tourism, while putting into consideration the environmental needs of the city. ADC Chairman and CEO Imad Fakhoury said the project would start in the second quarter of 2007. "This area is expected to attract $7 billion after the completion of the relocation project," he told journalists representing more than 150 international and Arab media.
ADC, which was established in 2004, owns strategic assets in Aqaba, including sea and air ports, prime lands, in addition to administrative and development rights in basic sectors within Aqaba.
Mr. Fakhoury announced that the corporation has signed several investment contracts worth $3 billion for the coming three years.
ADC previously announced the establishment of the Aqaba Airports Company, which will be tasked with managing, operating and developing King Hussein International Airport in Aqaba.
The initial capital of the company is JD1 million. This company, which is owned by ADC, will restructure the airport, upgrade passenger services and market them regionally and internationally.
According to Mr. Fakhoury, a tender will be floated later this year to attract a strategic partner for the project. "We aim to convert the airport into a productive business unit that will facilitate the process of attracting a strategic partner from the private sector to take on the development and expansion of this facility," he noted.
He also said that the establishment of the Aqaba Airports Company will be a model that will help facilitate the change of the role of the Civil Aviation Authority's from an operator of the Kingdom's airports to a body charged with monitoring and regulating airports activities in Jordan.
ACT demonstrates achievements
Participants also toured the Aqaba Container Terminal (ACT) and were briefed on its achievements by ACT CEO Patrecio Junior, who said that ACT has played a vital role in enabling Aqaba to overcome major obstacles and handle the burdening traffic congestion at the port. Before privatization, the Aqaba terminal port encountered serious problems in handling the increase in imports and exports, as well as loading and offloading of containers. In March 2004, global company APM Terminals arrived on the scene to manage ACT. The company has made several achievements during the last two-and-a-half years, which have helped to enhance its image. By March 2005, the company was able to put an end to traffic surcharges that, according to ACT, saved the Jordanian economy around $120 million.
The company became fully computerized when it added different technologies to its systems, such as introducing the advanced computerized systems of Navis and IFS terminal and financial systems. Targeting enhanced performance, ACT implemented systems that guarantee the ability of all vessels to turn around in no more than 12 hours, raising productivity rates from eight to 28 hours per crane hour. According to ACT, the dwell time to import a container has been reduced from 21 to a maximum of three days, while the anchorage waiting time has been reduced from 129 hours to zero, total vessel port stay from five days in 2004 to less than one day in 2005. New lines were inaugurated while the growth of export and import movements in the container terminal has increased 3.5% compared to last year. ACT has also constructed new "in and out" gates with proper security procedures and new marine routes between different countries, which increased the volume of usage.
The company followed an international periodical maintenance system for its cranes and equipment. It also provided a hotline to handle customer inquiries, direct complaints, and participated in specialized local and international conferences. ACT developed its own Web site that allows customers to track the movement of their containers.
Halfway there
Taameer Jordan also announced the completion of 50% of the construction work on its residential project, the Red Sea Resort. The resort, located on the southern shores of Aqaba, will be inaugurated by the end of 2008.
Taameer Jordan General Manager Khalid Al Wazani briefed visitors on the project, saying that it has a total area of 147,400 square meters, with an investment value of $75 million. He also added that out of the 260 villas, 60% were already sold, and that 9,000 square meters of the project were dedicated to entertainment facilities. The project is unique because it is the only one in Aqaba that provides a sea-view for all residents.
The old coastal city of Aqaba, long under-serviced by the government, is finally rising to the standards of its neighbors, namely tourist hot-spots Eilat and Sharm El Sheikh.
© Jordan Business 2007
