King Abdullah Economic City an example for Saudi reforms, says CEO

Fahd Al-Rasheed
Updated 17 November 2016

King Abdullah Economic City an example for Saudi reforms, says CEO

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 center — is profitable and in line with a government push which intensified this year to develop the private sector, Fahd Al-Rasheed said in an interview.
The 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.
Al-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.”
In April, Deputy Crown Prince Mohammed bin Salman announced an ambitious new economic plan dubbed Vision 2030 that aims to promote private sector investment.
The plan noted that the economic cities “did not realize their potential” and said some faced challenges “that threaten their viability.”
They are just one component of the wide-ranging Vision, whose scale has raised doubts over whether it can all be achieved.
But Al-Rasheed said he is convinced of “the strong fundamentals of the Saudi economy” and that, in the case of KAEC, “the model works.”
“We believe that it is time now for expansion with Vision 2030 because we believe we are very aligned” with the reform plan, he said.
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 KAEC is served by the King Abdullah Port, which Rasheed said will handle about 1.8 million containers this year, a figure set to increase in 2017.
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 Al-Rasheed.
A high-speed rail line will connect the KAEC with Jeddah and Islam’s holiest cities of Makkah and Medina, “which will give us access to 12 million residents in the western region within one hour,” Al-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.
The rail line, developed by a Spanish consortium, is behind schedule and is not expected to open before the end of 2017.
The KAEC development foresees investment of $100 billion at completion, but Al-Rasheed said there is no target date.
“This will depend obviously on the country’s economy, on the global economy, and on the absorption of our product,” he said.
Rasheed was speaking on sidelines of the MiSK Global Forum, which ended Wednesday and aims to link business leaders with young Saudis in a bid to inspire their involvement in economic diversification.


Egypt raises Sinai investment by 75% in 2019-20

Updated 22 August 2019

Egypt raises Sinai investment by 75% in 2019-20

  • North Sinai will receive 2.85 billion pounds of the investments, while South Sinai will take 2.38 billion pounds, Planning Minister Hala Al-Saeed said
  • An aide to President Abdel Fattah El-Sisi said last year that the Sinai development plan is expected to cost 275 billion Egyptian pounds and be completed by 2022

CAIRO: Egypt said on Thursday it would invest 5.23 billion Egyptian pounds ($315 million) in the Sinai Peninsula in fiscal 2019-20, a 75% rise on the year, in a venture officials say is intended to stabilize a region hit by violence from armed groups.
The Planning Ministry, which directed 2.986 billion pounds in investments to Sinai in the 2018-19 fiscal year, said in response to a Reuters question that the 2019-20 investments would be “general investments directed to all sectors.”
Egypt has been fighting an insurgency led by Daesh and concentrated in the peninsula’s north since the military overthrew President Mohamed Mursi of the Muslim Brotherhood in mid-2013 after mass protests against his rule.
The government hopes investing in the region will help curb extremism and bring stability by reducing higher-than-average unemployment.
North Sinai will receive 2.85 billion pounds of the investments, while South Sinai will take 2.38 billion pounds, Planning Minister Hala Al-Saeed said in a statement.
“The investments in North Sinai are in education, water, agriculture, irrigation, transport, storage, real estate activities and construction projects,” Saeed said.
South Sinai investments will be “in the agriculture, irrigation, transport, education and other services sectors,” she said.
An aide to President Abdel Fattah El-Sisi said last year that the Sinai development plan is expected to cost 275 billion Egyptian pounds and be completed by 2022, calling it “a project for national security.”