Red Sea ‘megac­ity’ - a good ex­am­ple for Saudi re­forms

Kuwait Times - - BUSINESS -

RIYADH: As Saudi Ara­bia seeks to di­ver­sify its oil-de­pen­dent econ­omy, the chief of a Red Sea “megac­ity” says his project is point­ing the way for­ward. A decade after its con­cep­tion, the King Ab­dul­lah Eco­nomic City-an in­te­grated in­dus­trial, res­i­den­tial and tourism cen­tre-is prof­itable and in line with a govern­ment push which in­ten­si­fied this year to develop the pri­vate sec­tor, Fahd Al-Rasheed told AFP in an in­ter­view.

KAEC was one of sev­eral “eco­nomic ci­ties” touted for devel­op­ment 10 years ago, dur­ing the reign of the late king Ab­dul­lah, as spe­cial zones where the pri­vate sec­tor could thrive. Rasheed said there were “so many chal­lenges” in the project’s early years but that the KAEC is now thriv­ing. “We are prof­itable for the last five years,” he said, “and we are to­day at the high­est cash po­si­tion that we’ve ever been.” Oil makes up the bulk of Saudi rev­enue but a col­lapse in crude prices since 2014 cre­ated a record deficit and in­ten­si­fied eco­nomic re­form ef­forts.

In April, the coun­try’s pow­er­ful Deputy Crown Prince Mo­hammed bin Sal­man an­nounced an am­bi­tious new eco­nomic plan dubbed Vi­sion 2030 that aims to pro­mote pri­vate sec­tor in­vest­ment. The scale of the project has raised doubts, but Rasheed said he is con­vinced of “the strong fun­da­men­tals of the Saudi econ­omy” and that the KAEC shows “the model works”. De­vel­oped by Emaar, The Eco­nomic City, the Saudi-listed unit of Dubai’s Emaar Prop­er­ties, the project has seen $10 bil­lion in in­vest­ment. Rasheed said it has signed con­tracts with more than 120 com­pa­nies, many of them French. Re­nault is as­sem­bling trucks, drug maker Sanofi has a plant, and To­tal is also es­tab­lished.

The project is pro­mot­ing sea­side res­i­den­tial de­vel­op­ments and ex­pects to be home to 10,000 peo­ple within a few months, with more than 40,000 tar­geted by 2020. “We are the largest res­i­den­tial de­vel­oper in terms of sales in the coun­try, al­though we are con­cen­trated in a remote site” north of Jed­dah, said Rasheed. A high-speed rail line due next year will con­nect KAEC with Jed­dah and Is­lam’s holi­est ci­ties of Mecca and Me­d­ina, “which will give us ac­cess to 12 mil­lion res­i­dents in the west­ern re­gion within one hour,” Rasheed said.

This will boost an­other goal of Vi­sion 2030, which is tourism devel­op­ment, he said. “We are build­ing golf cour­ses, theme parks, zoos, sa­faris”, he said, call­ing tourism “the most strate­gic sec­tor” for the KAEC. Home so far to a lux­u­ri­ous water­front re­sort, the city ex­pects to re­ceive 150,000 vis­i­tors this year and tar­gets 1.5 mil­lion by 2020. Rasheed was speak­ing on side­lines of the MISK Global Fo­rum, which ends Wed­nes­day and aims to link busi­ness lead­ers with young Saudis in a bid to in­spire their in­volve­ment in eco­nomic di­ver­si­fi­ca­tion.

RIYADH: Fahd Al-Rasheed, the chief of the King Ab­dul­lah Eco­nomic City — an in­te­grated in­dus­trial, res­i­den­tial and tourism cen­tre, gives an in­ter­view to AFP yes­ter­day. — AFP

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