Saudi Ara­bia builds cities in the sand to move be­yond oil

Muscat Daily - - REGION -

Riyadh, Saudi Ara­bia - Af­ter re­ly­ing on oil to fuel its econ­omy for more than half a cen­tury, Saudi Ara­bia is turn­ing to its other abun­dant nat­u­ral re­source to take it be­yond the oil age - desert. The king­dom is con­vert­ing thou­sands of square kilo­me­ters of sand into new cities as it seeks to di­ver­sify away from crude, cre­ate jobs and boost in­vest­ment.

In the past month alone, the world’s big­gest oil ex­porter has an­nounced two ma­jor de­vel­op­ments - one cov­er­ing an area big­ger than Bel­gium and an­other al­most the size of Moscow. That’s on top of plans to build a se­ries of so-called eco­nomic cities - spe­cial zones in lo­gis­tics, tourism, in­dus­try and fi­nance, an en­ter­tain­ment city and a US$10bn fi­nan­cial dis­trict.

“The over­all progress with the eco­nomic cities has been very slow, even be­fore the col­lapse of the oil price,” said Mon­ica Ma­lik, chief econ­o­mist at Abu Dhabi Com­mer­cial Bank PJSC. “Since then, the pace of de­vel­op­ment has mod­er­ated even fur­ther with a num­ber of projects be­ing placed on hold.”

When ‘Saudi Vi­sion 2030’ was an­nounced last April, the 84 page blue­print said the gov­ern­ment would work to ‘sal­vage’ and ‘re­vamp’ eco­nomic city projects ex­e­cuted over the past decade that ‘did not re­alise their po­ten­tial’.

Here’s a look at some of Saudi Ara­bia’s most am­bi­tious projects:

The Red Sea

The king­dom last week an­nounced plans to turn 50 is­lands and 34,000sqkm - an area big­ger than Bel­gium - along its Red Sea coast­line into a global tourism des­ti­na­tion. Lo­cated be­tween the cities of Um­luj and Al Wahj, the project aims to at­tract lux­ury trav­el­ers from around the world and will be de­vel­oped by the Pub­lic In­vest­ment Fund, the coun­try’s sovereign wealth fund. Con­struc­tion is ex­pected to start in 2019 and the first phase com­pleted by 2022. The de­vel­op­ment cost of the project wasn’t given.

Vis­i­tors will have ac­cess to the an­cient ru­ins at Mada’in Saleh, a relic of the same an­cient civ­i­liza­tion that built the city of Pe­tra in Jor­dan. A pro­mo­tional video for the project with dra­matic mu­sic show­cases white sand beaches and flocks of birds soar­ing over turquoise waves. Prince Khaled al Faisal, Makkah Emir and Ad­vi­sor to Cus­to­dian of the Two Holy Mosques, on July 26 said the Al Faisaliah city project will pro­vide 995,000 hous­ing units and it will ac­com­mo­date 6.5mn peo­ple by 2050

Bring­ing sun-seek­ers to Saudi beaches could trans­form a tourism in­dus­try that re­lies al­most solely on pil­grims vis­it­ing holy shrines in Mecca and Me­d­ina. The coun­try’s re­stric­tions on dress etc, how­ever, could make it a hard sell for for­eign tourists.

Al Faisaliyah

The king­dom an­nounced de­tailed plans for the Al Faisaliyah project last month. Lo­cated to the west of Mecca, the city will have resi-

den­tial units, en­ter­tain­ment fa­cil­i­ties, an air­port and sea port. The project will cover 2,450sqkm - al­most the size of Moscow - and is ex­pected to be com­pleted by 2050. The Makkah Re­gion De­vel­op­ment Author­ity is su­per­vis­ing the project and the PIF is also in­volved. An in­vest­ment fig­ure hasn’t been given.

En­ter­tain­ment City

Saudi Ara­bia in April an­nounced plans to de­velop the king­dom’s

largest cul­tural, sports and en­ter­tain­ment city in Al Qidiya, south­west of Riyadh. The project will be de­vel­oped on 334sqkm and will in­clude a sa­fari area and a Six Flags En­ter­tain­ment Corp theme park. The coun­try’s sovereign fund is the main in­vestor, along with lo­cal and in­ter­na­tional in­vestors. Con­struc­tion is due to start next year and the first phase should be com­pleted by 2022. An in­vest­ment fig­ure was not given.

King Ab­dul­lah Eco­nomic City

KAEC, named af­ter the for­mer head of state, is the king­dom’s first free­hold city and is be­ing de­vel­oped by Emaar Eco­nomic City, a com­pany con­trolled by the Saudi gov­ern­ment and Dubai’s big­gest prop­erty de­vel­oper Emaar Prop­er­ties PJSC. Cov­er­ing about the same area as Brus­sels, the project has at­tracted US$7.9bn of in­vest­ment and se­cured enough cash and credit to fund its planned spend­ing for the next decade, ac­cord­ing to KAEC. The project in­cludes a deep-sea port, a 55sqkm lo­gis­tics hub, a sports and re­cre­ation cen­ter and more than 6,500 res­i­den­tial prop­er­ties.

King Ab­dul­lah Fi­nan­cial Dis­trict

KAFD, as it’s known, was en­vis­aged as Saudi Ara­bia’s an­swer to the Dubai In­ter­na­tional Fi­nan­cial Cen­tre, bring­ing banks, fi­nan­cial-ser­vices firms, au­di­tors and lawyers, as well as the king­dom’s stock ex­change and cap­i­tal-mar­ket author­ity into one area. The project, north of Riyadh, has been slowed by con­struc­tion de­lays since work be­gan in 2006 and is more than 70 per cent com­plete.

Knowl­edge Eco­nomic City

Saudi Ara­bia’s first so-called smart city de­vel­op­ment, the city in Me­d­ina will fo­cus on in­tel­lec­tual prop­erty, knowl­edge-based in­dus­tries, med­i­cal, hos­pi­tal­ity, tourism and multi-me­dia. It will also have ser­viced apart­ments, a ho­tel and con­fer­ence fa­cil­i­ties, ac­cord­ing to the Eco­nomic Cities Author­ity web­site. Res­i­dents of the city, which will cover 4.8sqkm, will have ac­cess to Mecca and Jeddah via the Hara­main High Speed Rail­way. KEC was listed on the Saudi stock ex­change in 2010 af­ter rais­ing about US$270mn.

Prince Ab­du­laziz bin Mousaed Eco­nomic City

This is a mixed-use de­vel­op­ment lo­cated on 156sqkm of land in Hail in the north of the king­dom. As well as a res­i­den­tial area, the city will also have an in­ter­na­tional air­port, ho­tels, shop­ping cen­ters and en­ter­tain­ment venues.

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