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

Fahd Al-Rasheed
Updated 17 November 2016
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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.


IDEX 2019: UAE armed forces sign new defense deals

Updated 19 February 2019
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IDEX 2019: UAE armed forces sign new defense deals

  • Falcon was developed in response to the UAE’s request to replace the Hawk Air Defense System

ABU DHABI: The UAE armed forces has signed $1.17 million worth of defense contracts with local companies and $514.8 million with international companies, military spokesperson Brigadier General Mohammed Al-Hassani said on Tuesday.

The Emirates on Monday also awarded Raytheon a $1.55 billion contract to supply its air force with platform systems to launch missiles.

The agreement was signed at the week-long IDEX military exhibition in Abu Dhabi and followed the award on Sunday of a 1.3 billion-dirham contract to Raytheon to supply the UAE with patriot missiles.

The UAE armed forces signed a total of 7.2 billion dirhams in contracts on Monday, including 5.8 billion dirhams with international companies, Brig. Gen. Mohammed Al-Hassani said, speaking through a translator.

The UAE has signed a total of 12 billion dirhams in contracts since the IDEX exhibition started on Sunday, he said.

Lockheed Martin, Germany’s Diehl Defense, and Sweden’s Saab on Monday launched at IDEX the Falcon air defense weapon system, billed as a replacement to the Hawk system used by countries in the Middle East.

Falcon was developed in response to a UAE request for a replacement for the Hawk system and talks are underway to sell it to the Gulf state, Scott Arnold, Lockheed Martin’s vice president and deputy head of Integrated Air and Missile Defense said.

Weapons sales to the UAE have come under scrutiny over the past year due to the country’s involvement in the Yemen war that has killed tens of thousands of people and pushed the country to the brink of starvation.

The UAE and Saudi Arabia are leading a military coalition, which includes local forces drawn from Yemeni factions, that is trying to restore the internationally recognized government ousted from power in 2014 by the Iran-aligned Houthi movement.