JEDDAH, 21 August 2006 — Plans are under way to establish a new economic city in Makkah at a cost of SR10 billion. The Um Al-Qura Economic City project, which has been presented to Custodian of the Two Holy Mosques King Abdullah for his approval, is expected to create 15,000 new jobs, informed sources said.
They said the company to be entrusted with the task of developing the city would sell 30 percent of its shares for public subscription in an initial public offering, adding that the founders would raise the remaining amount.
Two sites have been proposed for the project; the first is along the Makkah-Jeddah Highway, near Makkah National Park, while the second is in Shuaiba, a small township on the Red Sea.
Adel Kaaki, chairman of the Makkah Chamber of Commerce and Industry, said businessmen in the holy city had expressed their desire to establish an integrated economic city that would link Makkah with Jeddah.
Saudi Arabian General Investment Authority’s (SAGIA) officials will meet with Makkah businessmen in Riyadh shortly to discuss details of the project, press reports said.
The new city, which is the fourth of its kind to be established in the Kingdom as part of a major investment drive, is designed to accommodate a number of productive industries. “The Um Al-Qura Economic City will open new opportunities before the private sector and boost the national economy,” said Kaaki.
King Abdullah has already launched three economic cities in Rabigh, Hail and Madinah.
The King Abdullah Economic City (KAEC) in Rabigh, 200 km northwest of Jeddah, is expected to attract SR100 billion investments and create 500,000 jobs.
The Prince Abdul Aziz ibn Musaed Economic City in Hail is designed to house projects valued at SR30 billion while the Knowledge Economic City in Madinah SR25 billion projects.
“The three economic cities launched to date by SAGIA are in line with its strategy to promote investments into the country’s sectors that propose the best competitive advantages, namely, energy, transportation, and KBI (Knowledge-based industry),” SAGIA Governor Amr Al-Dabbagh said.
The first economic city (KAEC) launched in December 2005 focused on promoting energy-and transportation-related industries, while the second, the Prince Abdul Aziz bin Musaed Economic City, is designed around transportation and related logistical services. “The Madinah economic city captures the essence of SAGIA’s third focus, knowledge-based industries (KBI),” added Dabbagh.
Covering an area of 55 million square meters, KAEC will undertake mixed-use developments in six components: a modern world-class seaport, industrial district, financial island, educational and healthcare zone, resorts and the residential area.
The overall project will be completed in stages, with the first batch of commercial houses and residents expected to take possession within 30 to 36 months.
The Knowledge Economic City in Madinah is composed of the Taiba Technological and Economic Information Center, an interactive museum on the Prophet’s life, a center for studies of Islamic civilization, and another center for medical studies, biosciences and integrated medical services.
King Abdullah issued the license to a group of investors to carry out the project that also includes housing for 200,000 as well as commercial centers. A consortium led by UAE real estate giant Emaar Properties has been licensed to carry out the mega project, the largest single private sector scheme in the Kingdom.
Dabbagh said the economic city projects were an aggressive bid to repatriate capital and attract value-added foreign investments.
“The move is part of efforts aimed at developing the Kingdom’s regions in a hi-tech manner while easing mounting pressure off the country’s infrastructures,” he added.
