JEDDAH: Jazan Economic City (JEC), one of the icons of Custodian of the Two Holy Mosques King Abdullah’s vision to diversify the Kingdom’s economy, has attracted tremendous interest from local and international investors since its launch in 2006.
“The JEC has lured investments worth SR100 billion within a time span of two years, well ahead of the 25-year target envisaged at the launch of the project,” Zaidan Mohamed O. Yousef, chief executive officer of MMC Saudi Arabia Co. Ltd., the master developer, said in an exclusive interview with Arab News.
“The fast response of investors shows how attractive the JEC project is,” he added.
MMC International Holdings Ltd. of Malaysia, through MMC Saudi Arabia, has a 50 percent stake in the project, while Saudi Binladin Group (SBG), one of the major primary contractors in the world, holds the remaining 50 percent. The Saudi Arabian General Investment Authority (SAGIA) is the facilitator of the mammoth JEC project. “We get all the support from SAGIA and particularly from its governor, Amr Al-Dabbagh,” he said.
Jazan, with a population of 1.2 million covering an area of 40,000 sq km, is considered one of the least developed regions in the Kingdom.
“The development of Jazan is part of King Abdullah’s vision for diversification and JEC is considered a gift from the king to the people of Jazan,” Yousef said.
Despite the global financial crisis and fears of recession, Saudi Arabia has embarked on various development projects, which were evident in the new fiscal budget presented last week by King Abdullah, he added.
“The Kingdom’s largest-ever budget has allocated a record SR225 billion for new projects and Jazan region will be a part of that,” Yousef said.
While describing the whole JEC project, Yousef said the city would have an industrial zone, a privately owned oil refinery, a steel cluster, an iron ore trading hub, a palletizing plant, and an aluminum smelter complex and various downstream industries. In addition to primary and heavy industry, the project will include a multipurpose seaport, power and water desalination plants, a commercial business district, residential areas, hospitals and schools.
A thermal power plant will be built comprising a captive plant for the aluminum smelter and the balance for other industries and the city’s needs.
The desalination plant will provide about 500,000 cubic meters of potable water per day to cater to the internal requirements of JEC as well as to supply to the distribution network.
MMC Ports, SBG and JEC have already signed an agreement to develop the port, which is intended as a catalyst for the city’s industrial activities.
The port, which seeks to capitalize on the busy Red Sea and Suez Canal routes, will cost SR5.25 billion ($1.4 billion) and is expected to be ready by June 2013, Yousef said. Jazan is a densely populated area in the Kingdom and it has a competitive advantage because of its strategic location, he said. JEC is ideally situated on the coastline of the Red Sea, in close proximity to the main East and West sea trade routes to Europe, the Far East and the Arabian Gulf and facilitates efficient transportation of goods and cargo.
As there is a shortage of refineries in the world, the JEC refinery project is part of the Kingdom’s plans to give an economic boost to the region. The world-class oil refinery is projected to have a capacity of 250,000-400,000 barrels per day and will be located in JEC, he said. The development of refining is supervised by the Ministry of Petroleum and Mineral Resources, he added.
The letter of intent for the construction of power plant contract was awarded recently by MMC, SBG and Aluminum Corporation of China Ltd. (Chalco) to CPI Power Engineering Co. Ltd. of China to kick-start the construction of the 2,400MW plant.
Secondary industries at JEC will include steel with investments worth SR1.87 billion ($500 million), automotive SR750 million ($200 million) and shipbuilding SR3.37 billion ($900 million).
Yousef said the construction had already begun on the first stage of JEC with the building of a steel plant with a production capacity of one million tons per year.
The residential and commercial zone for the city is expected to be ready by 2013, and work on other facilities such as health care, education, sports and mosques will begin early next year, he added.
The JEC will also have secondary industries related to agriculture and fisheries, and a full-fledged research center to support them.
Yousef said Jazan has rich deposits of limestone, dolomite, marble, basalt, gypsum and silica, which will support the petrochemical, metal-processing, silicon-processing, agro and biotechnology industries. He also emphasized incentives for investors. “JEC is a bonded area with no restrictions on repatriation of capital into and out of Saudi Arabia,” Yousef said, adding that investors in JEC are allowed 100 percent ownership of their projects.
“JEC has opened the doors for employment to locals and others as it will create about 500,000 direct and indirect jobs,” he said. The city will also train locals to participate in various projects with the assistance of cadre training which is one of SAGIA’s initiatives to provide the required training for Saudi labor force. “To benefit more young people in the region, JEC has given scholarships to 1,000 people who will be trained in Malaysia, sponsored by Al-Bukhary foundation,” he said. He also said that people from Jazan would be given 2.5 percent shares of paid capital of JEC.
“I am sure JEC will transform Jazan’s economy and improve the quality lifestyle of its people and add great value to the national economy of Saudi Arabia,” Yousef added.