DAMMAM: The Kingdom’s economic cities, still in the pipeline, would contribute $150 billion to the country’s GDP (gross domestic product) in addition to creating 1.3 million new jobs by the year 2020, a recent study said.
“The SR100 billion King Abdullah Economic City (KAEC) alone will contribute one tenth of the GDP from construction sector. While KAEC would be sprawling over an area of 63 sq. km., its industrial city would house 2,500 manufacturing companies including plastic industries occupying 2.4 million square meters in Rabigh. A 13.8 sq. km. seaport with capacity to handle 10 million containers will be constructed in KAEC. The port will be one of the five largest in the world,” the study prepared by the Center for Studies and Research at the Eastern Province Chamber of Commerce and Industry said.
“While 675,000 jobs available at the new economic cities would require moderate to high levels of skill, the remaining 170,000 would be highly skilled jobs,” the report added.
The residents of the Kingdom’s economic cities would be three times the current population of Dubai while their total area is four times that of Hong Kong with a GDP not less than Singapore’s, the study said.
While the government will play the role of a regulator, facilitator and promoter of these cities, the private sector will find the required capital, real estate and developers of projects in the cities, the study said.
“According to the Saudi Arabian General Investment Authority (SAGIA), the four major industrial sectors of aluminum, steel, fertilizers and petrochemicals would create between 105,000 and 110,000 job opportunities by 2020,” the study noted.
However, the industrial sector in the Kingdom would be dominated by petrochemical industries in which the Saudi Arabian Basic Industry Corp. (SABIC) plays a strategic role internationally, it added.
SABIC would take a major role in the activities in the industrial cities with several aluminum and steel plants, aluminum oxide factories and packaging factories etc. Annual Aluminum production in the country would reach 6.25 million tons while the sponge iron production would cross 10 million tons annually by 2020.
The study also projected that by 2020 the Saudi Arabia’s annual Ammonia manufacturing capacity would exceed 22 million tons.
The report stressed the easy availability of fuel and raw materials as the most favorable factor for the development of these key industries.
“While in Saudi Arabia natural gas was available at $0.57 per BTU in early 2007, in the United States its price was $7.20 per BTU in the same period. The cost of fuel in the Kingdom’s aluminum industry is 7 percent of the total manufacturing cost; in China it is put at 38 percent, in the US 25 percent and in Germany 17 percent,” the study observed.
The report called on the private sector to make the most of the favorable climate in the Kingdom for industrial development such as the numerous areas open for profitable investments, SAGIA’s investor friendly policies, Saudi Arabia’s membership in the World Trade Organization and the advanced infrastructure available in economic cities and industrial zones.
“The economic cities will also generate a host of economic activities such as offering more investment opportunities in the construction sector and building material industries,” the study added.