The Kingdom is undergoing a transformation of quite stunning proportions. In relative terms, the transformation arguably matches the extraordinary economic developments taking place in China.
In the past fortnight Custodian of the Two Holy Mosques King Abdullah has laid the foundation stones for the second and third mega-economic cities. It will take its place alongside the King Abdullah Economic City in Rabigh near Jeddah which the king inaugurated in December. The Prince Abdul Aziz ibn Musaed Economic City in Hail and the Knowledge Economic City in Madinah involve total investments of SR55 billion on top of the SR100 billion committed to King Abdullah Economic City, itself one of the world’s largest ever civil construction projects. Add to this, the upgrading of Madinah airport to become the Kingdom’s fourth international airport, the investment in a monorail connection between the Knowledge Economic City and Madinah, the new railway system and the program of new highways and the amount of civil construction work already in the pipeline is breathtaking. And the program is by no means finished. Two more mega-economic cities are planned as part of a visionary drive to broaden Saudi Arabia’s economic base, attract large quantities of foreign investment and to create jobs and new sources of wealth.
One of the most significant factors is that the Saudi Arabian General Investment Authority (SAGIA) has demonstrated considerable success in attracting foreign as well as domestic investment. SAGIA announced yesterday that the UAE had overtaken Japan as the Kingdom’s largest foreign investor with almost SR123 billion now committed. This means that the UAE now accounts for some 41 percent of all Foreign Direct Investment (FDI). This immense sum not only demonstrates the need for UAE investors to find fresh fields outside their own borders but also indicates that UAE investment vehicles are themselves attracting foreign investors who wish to have a share of the profits to be made inside Saudi Arabia.
These are indeed exciting times for everybody but they do not come without challenges. The sheer volume of project management and construction work that is under way — or soon to be under way — will place considerable demands on local business and indeed on the existing infrastructure. Each individual project will demand the delivery of goods and services in a way which avoids expensive delays. With the best will in the world, project managers are going to focus exclusively on their own assignments and will not be interested in the problems of anyone else. Friction is inevitable but it will be reduced if the authorities can successfully manage the flow of everything from raw materials to equipment and labor and so avoid delays and bottlenecks. If all ministries can work hand in hand, not only with private sector contractors but, just as importantly, with each other, then the challenges ahead will be considerably easier to overcome. Every individual scheme must be integrated into what will probably prove to be the world’s largest overall project management exercise.
