Saudi Arabia's Diriyah Gate Development Authority (DGDA) expects to announce $6 billion worth of tenders for the heritage mega project after summer, the Group CEO said.
Jerry Inzerillo told Zawya that the Authority, which is mandated to transform the historic city of Ad-Diriyah into an educational, cultural, recreational, and hospitality hub, is putting together various packages for tendering after the summer.
"We still have to get formal approval on the budget, but we expect the tender figures to be about $6 billion for the next year," he said in an exclusive interview on the sidelines of the Arabian Travel Market (ATM).
The 300-year-old Ad-Diriyah, located just outside of Riyadh, is considered to be the birthplace and capital of the first Saudi state.
"The tenders include a sizable number of residential contracts, eight museums, hotels, restaurants, retail, the new souks, two spectacular mosques (King Salman Mosque and Grand Mosque), and the new King Salman University," said Inzerillo.
He disclosed that the museums are in the design stage while other [buildings] are in the expression of interest or construction tendering stage.
"We have our board meeting on 24 May, and then we will get the permission to release further information on the details of the museums and other projects. We have the land assignments and know the footprints, but they are still being nailed down a bit more from their original mission statements."
He pointed out that DGDA awarded almost $4 billion in contracts so far this year.
"Of this, $2 billion contracts were awarded in infrastructure to prepare the city for 7 million visitors. Some of the work was very complex, like, we had to drill through 8 million cubic meters of limestone rock to put the infrastructure underneath the ground for the new historic city but by using sustainable practices."
Large hospitality component
Initially, the Diriyah master plan consisted of only two components, Diriyah Gate and Wadi Safar, but with Saudi Crown Prince Mohammed bin Salman Al Saud elaborating the master plan, the project took on a new perspective, the DDGA executive explained.
"[It remains] still a very high-end development, still the traditional historic mud city, but the project has grown to include a lot more sizable assets such as a new 20,000 seat performance arena, a new opera house, a wonderful Saudi Arabia contemporary art museum and a new convention centre," he said.
Inzerillo said the master plan currently comprises three components with a sizable hospitality offering.
Diriyah Gate I will feature 18 hotels within the mixed-use traditional urban community that is to be created in an authentic Najdi architectural style, typical of Saudi villages, using the same mud bricks and plaster used centuries ago while providing modern amenities.
Diriyah Gate II is envisioned as a Parisian scale, pedestrian-focused mixed-use development with all the cultural entertainment assets, while Diriyah Gate 3 will have a huge residential aspect.
"The hospitality side will be very large - totally, we will have 38 new hotels across Diriyah Gate I, II, and III, and we have already announced several brands," he said.
Other key elements of the Diriyah master plan include Wadi Hanifah, which aims to transform the iconic oasis into a nature-based escape for Riyadh's residents, and the 60-square-kilometer Wadi Safar, which is slated to become a Beverly Hills-style residential and hospitality district.
"We've been very lucky because DGDA has the ability to self-fund, bridge finance, joint venture, or to have complete finance," said Inzerillo when asked about project financing. "But we have also been very fortunate because we have a very substantial number of foreign investors interested in this development. Especially since it is the birthplace of the kingdom, we also see a lot of investment from Saudi conglomerates and entrepreneurs who are proud of that fact."
On the hospitality front, Inzerillo said they had seen some interesting scenarios. "We had several parties interested in 100 percent equity in some of the luxury hotels. Again, we had three partners wanting 100 percent equity on one particular hotel, and it had to go to the board for a decision," he said.
The first hotel will open next year, he added.
The $50.6 billion heritage megaproject is targeting 27 million domestic and international visitors by 2030 in support of the Saudi national tourism strategy, which aims to host 100 million international tourists by 2030.
(Reporting by Sona Nambiar, Editing by Anoop Menon)