RIYADH, 21 December 2005 — Custodian of the Two Holy Mosques King Abdullah yesterday laid the foundation stone of an SR100 billion ($26.6 billion) King Abdullah Economic City that will come up in Rabigh, north of Jeddah, in what has been described as the biggest project of its kind in the Gulf region.
The corner stone will be transported and placed at the site of the construction which starts today on a 55 million square meters area along a 35-km shoreline on the Red Sea. King Abdullah also laid the corner stone of a new headquarters building for the Saudi Arabian General Investment Authority (SAGIA).
King Abdullah was received on arrival at the SAGIA headquarters by Crown Prince Sultan, governors of various regions, senior princes, Cabinet ministers and high-ranking government officials, besides Amr Al-Dabbagh, governor of SAGIA.
The dignitaries also included Crown Prince of Dubai and UAE Defense Minister Sheikh Mohammed Bin Rashid Al-Maktoum and several senior officials from UAE. The mega project, designed to make Saudi Arabia a magnet for overseas investors, is being developed by Emaar Properties, the world’s largest real estate company at over $40 billion, in conjunction with Aseer Trading, Tourism & Manufacturing Co. and the Binladin Group from Saudi Arabia.
Together, they will set up a joint venture company, with 30 percent of its equity to be floated for initial public offering (IPO). The project, which has been described as “another jewel in the crown of Saudi Arabia” by Sheikh Mohammed, is expected to create 500,000 new jobs in the new age city. SAGIA will act as a facilitator of the project.
One of the major highlights of the King Abdullah Economic City is that it will comprise six distinct components designed to make it a world class location for overseas investors. It will also transform the Saudi economy into a global economic powerhouse, which will have a magnetic pull for investors across the broad spectrum of IT, industry, R & D, education, health and various other sectors.
The city will have a multistage development with construction scheduled to start today. This mega project will integrate itself into the Kingdom’s ongoing drive to expand and diversify the economy, create employment opportunities for Saudis, and act as a hub for foreign investors, global trade, commerce and industry. The first phase of the project will be completed in 24 to 36 months
Central to the mega project is the creation of a 2.6 million square-meter new millennium seaport similar in size to the world’s top ten ports, such as Rotterdam, that would allow even the world’s largest super vessels to drop anchor. With its strategic location on the Red Sea and the instant access to key cities within Saudi Arabia, the port will have a designated area for light industry and logistics and serve as a natural platform for onward movement of goods to Europe, Africa, Asia and beyond.
The port will have an integrated transport system with seamless high speed transition from sea to rail, road and air, making the city the main gateway to the Central and Eastern Provinces as well as the entire Kingdom.
The port, with its close proximity to the holy cities of Makkah and Madinah, will have a dedicated Haj terminal that can receive over 500,000 pilgrims every season. To cater to the pilgrims’ needs, there will be adjoining hotels, medical centers and other world class amenities.
Speaking on the occasion, Al-Dabbagh said: “It is no coincidence that the city is being formally launched as Saudi Arabia has now become a part of the World Trade Organization (WTO). The city is one of the most impressive projects Saudi Arabia has attempted in the new millennium. The fact that we were able to move ahead with this project on a fast track basis shows that the Kingdom is moving ahead with confidence to transform its economy and create more sustainable prosperity for its citizens,” the SAGIA governor observed.
Mohammed Ali Alabbar, Emaar chairman, said: “The six components — seaport, industrial district, educational zone, financial island, resorts and the residential area of the city — will work seamlessly together to make it an important global destination and a focus area for the development of both heavy and light industry, services in various sectors and bring in a greater level of local investment as well as regional and international foreign direct investment (FDI) into the Kingdom.
The educational zone will consist of universities and schools. There will also be research and development centers, a luxury holiday resort as well as residential and commercial centers.
The city is part of SAGIA’s ambitious plan to attract foreign funds, providing incentives and tax breaks for investors and removing hurdles facing them. It has concluded 17 agreements with various government departments aimed at knocking down hurdles for local and foreign investment.
The Kingdom received a record $17.3 billion in foreign investments in the first half of this year, a 17-fold increase over the same period last year, he said. Investment opportunities worth over $500 billion have been announced in areas ranging from energy and transportation to knowledge-based industry sectors.
