JEDDAH, 9 May 2006 — Industry owners and managers are complaining that poor infrastructure in Jeddah’s industrial city are obstacles to attracting investors and new projects. The lack of services and maintenance is affecting production and further developments, which runs counter to the objective of the Jeddah Chamber of Commerce and Industry (JCCI) for developing the industrial sector. This objective is also part of the overall plan by the Ministry of Commerce and Industry and the Saudi Arabian General Investment Authority (SAGIA) to develop and diversify the industrial sector in the Kingdom. As Jeddah is the Kingdom’s commercial capital, such a problem is a real concern. For Jeddah’s industrialists, the establishment of King Abdullah Economic City in Rabigh, only a short distance away, is a further concern.
“The infrastructure needs to be developed,” said Ulfat Qabbani, member of the industrialists committee of the JCCI board of directors. Complaints include shortage of water and electricity supply, poor road conditions and traffic services, lack of close health facilities or commercial establishments such as restaurants and food stores, lack of safety measures in the factories and lack of a clean environment. All these add up to a poor industrial investment environment and consequently a decline in production levels and opportunities for expansion. The main reasons for the lack of attention to this vital sector are lack of funding and planning.
“We need to coordinate our efforts with the municipality and there are suggestion on ways to improve but more is needed especially with regards to waste disposal. There are plans for new industrial cities here and a budget has been allocated but the final decision has not been made,” said Qabbani.
However, she said that some urgent steps have been made by the Industrial City Commission to solve some of the infrastructure problems at the current industrial city. The commission is offering unused land of 100, 000 square meters at the industrial city to be privatized for a nominal price of 8-11 halalas per square meter for industrial projects and another 40 million square meters on Makkah Road offered for bidding by a company willing to develop it.
Another private company specialized in operating and developing sewers has been contracted to install a sewage system at the industrial city for SR10 per square meter. Also, an electricity station with 500 kilowatts power is in the process of being implemented.
Meanwhile, a recent report by the Ministry of Commerce and Industry identifies other obstacles to the growth of the industrial sector in the Kingdom in additon to a lack of funding. These include lack of the following - marketing, Saudi human resources and pollution controls. To tackle these obstacles, the report suggests coordination with various governmental institutions such as Ministry of Finance to arrange financing plans through banks and other financing sources. As for marketing, the report recommends to coordinate efforts with other countries to facilitate marketing Saudi products. The shortage of Saudi human resources in factories can be addressed by employment campaigns, incentives and training by the private industries. Qabbani said that among the main goals of the industrialists’ committee is establishing an industrial city for training Saudi men and women to take over working in and managing the factories of the industrial city.
“This industrial city for training should be facilitated with the latest training programs and highest qualifications in order to prepare our young men and women to work in the factories and manage them, which will reduce the number of expatriates and increase national production,” she said.
The pollution problem is serious because it involves having modern monitoring equipment, the human resources needed for that and enough awareness programs on industrial pollution. The ministry report recommends establishing monitoring stations and network and supporting them with specialized personnel and the needed financing as well as proper awareness campaigns on industrial pollution.
According to the report, the number of licensed factories a year ago reached 3,657 with a total financing of SR256.1 billion. As for factories licensed under the foreign capital investment system, they were 501 by the end of the first quarter of last year and the licensed factories that have not begun production were 1,327. There are thirteen industrial cities in Saudi Arabia supervised by the Ministry of Commerce and Industry.
