$30bn Jizan mega project joins others to create new economy

At least another two such developments are also expected to be revealed over the next few months. The massive projects already inaugurated involve investment commitments reaching almost $60 billion. The huge integrated construction projects are expected to energise regional development and widen the Saudi economy.

For this purpose, The Kingdom's new cities are designed to provide advanced infrastructure, transportation and logistics facilities for a range of potential inward investment which it is hoped will stimulate a transfer of technology and create many job opportunities.

It is a strategy that seeks to accommodate the changing needs of a growing non-oil economy embracing new industries and at the same time to ensure adequate employment opportunities, educational facilities and housing for a young and growing Saudi population.

Extensive investment

Jizan will see extensive infrastructure investment which in the latter's case will include a new port, railway, express road links and an expansion of residential areas as well as fresh real estate projects.

Malaysian energy and transport conglomerate MMC Corporation together with Saudi Binladen Group is the lead developer of the Jizan project. According to MMC the new industrial zone will comprise two thirds of the Jizan development.

This will accommodate a port, an aluminium smelter, steel plant, oil refinery, copper processing plant as well as fisheries and other agro-related industries according to CEO Feizal Ali.

The first of the Kingdom's economic cities was launched in December 2005 at Rabigh, 200 kilometres north of Jeddah to house petrochemicals and other energy related industries.

The city is being developed by the UAE's Emaar Properties in collaboration with the Kingdom's Binladen Group and Aseer and will see one of the world's largest seaports constructed as well as an 8 million square metre industrial area and a new financial district.

A second city launched at Hail in June is focused on transport, logistics and food-related industries. The new Madina city development will aim at research-based industries including information technology and medical companies.

Mineral wealth

Jizan's hinterland of is known to possess very large deposits of minerals including limestone, dolomite, marble, basalt, silica and gypsum that are expected to encourage creation of mining and associated processing industries. The region which extends some 300 kilometres along the Red Sea also has considerable agricultural and tourism development potential.

Substantial regional investor interest has been generated in the city developments from players such as Abu Dhabi Investment House, Kuwait Investment Company, Bahrain's Gulf Finance House as well as the emirate's Emaar properties.

King Abdullah Economic City (KAEC) in Rabigh successfully floated 30 per cent of its share capital in August in an initial public offering that was 2.8 times oversubscribed.

All the various city developments are long-term and are likely to take up to 30 years to fully complete but they are also underpinned by government and influential regional investors. By the time they are completed they will have laid the foundations of a much wider and comprehensive Saudi economy.