Economy

The Cities Revealed

Economic Cities

Like many of its neighbors, Saudi Arabia is attempting to shift its economy away from being hydrocarbon based to a more diversified and sustainable one. One of the leading initiatives […]

Like many of its neighbors, Saudi Arabia is attempting to shift its economy away from being hydrocarbon based to a more diversified and sustainable one. One of the leading initiatives in this endeavor is its economic cities. In addition to diversification, the cities have four more aims. The cities will help to develop the competitiveness of the Saudi economy, create jobs, develop regional areas, and improve the general skills of the Saudi workforce. By 2020, the government hopes that all six cities will have a combined direct GDP contribution of $150 billion with a $100 billion indirect contribution and employ 1.3 million people, according to the Saudi Arabian General Investment Authority (SAGIA). With the workers’ family members included, it is expected that all the cities will have a combined population of 4.5 million people and raise the national GDP per capita from $25,000 in 2012 to $33,500 by the end of the decade.

There are six cities planned in total, with four currently under development and two planned for a later date. The four under development are King Abdullah Economic City (KAEC) in Rabigh, Prince Abdulaziz Bin Mousaed Economic City (PABMEC) in Hail, Knowledge Economic City (KEC) in Medina, and Jazan Economic City (JEC) in Jazan. The two planned for the future are Tabuk Economic City (TEC) and Eastern Province Economic City (EPEC).

KING ABDULLAH ECONOMIC CITY

The largest of the six cities is KAEC. It is located just off the Red Sea north of Jeddah and covers 168 square kilometers. It requires an investment of $27 billion and is expected to employ 1 million workers and have a population of 2 million when fully operational. The main focus of KAEC will be logistics, light and processing industries, and financial services. The city will consist of a seaport, an industrial district, an education zone, a central business district, a financial island, a residential area, and numerous resorts and entertainment venues. Naturally, for a project this size, KAEC will be completed over three phases with the development currently in Phase II. Phase I was essentially finished with the opening of the seaport in 3Q2013 with a capacity of 1.3 million TEUs per annum. A company has been set up by Emaar to develop the 14-square-kilometer port and add a further 6 square kilometers to increase its capacity to 20 million TEUs, which would put the port into the top-20 worldwide in terms of size. The port expansion is expected to cost $800 million.

PRINCE ABDULAZIZ BIN MOUSAED ECONOMIC CITY

PABMEC is the second largest city by size at 156 square kilometers and is situated in the northern part of the country on the main transportation routes for the Middle East. The four main focuses of PABMEC are agriculture, logistics and transportation, minerals, and construction materials. The city is expected to produce 55,000 new jobs and house 300,000 people. PABMEC will host a dry port, mining, knowledge, and logistics and transportation centers, an agro-industry zone, and a petrochemical industries zone. To complete the project, it is expected to cost $8 billion in total and is being developed by the Rakisa Holding Company.

KNOWLEDGE ECONOMIC CITY

On the smaller side comes KEC. Located in Medina, the city covers 4.8 square kilometers and will cost $7 billion. It is hoped that KEC will generate 20,000 jobs and house 200,000 people. KEC will revolve around knowledge-based industries, tourism, and services. The city will have a complex for technology and knowledge-based economy, technological and administrative colleges, an Islamic civilization studies center, and a complex for medical, biological, sciences, and health studies, as well as a theme park, King Abdulaziz Mosque, and numerous passenger terminals.

JAZAN ECONOMIC CITY

The final city under development is JEC. The 113-square-kilometer development will require an investment of $27 billion and is being undertaken by MMC International. It will create an estimated 100,000 jobs and have a population of 300,000. The focus of this city is heavy, secondary, and labor-intensive industries, agriculture, and energy. The industrial park will take up an estimated two-thirds of the city, while it will also house a seaport, agriculture repackaging and distribution services, fisheries, power and water desalination plants, a business and culture center, and health and education areas. JEC is located on the Red Sea in the southwestern part of the country.

WHO’S IN CHARGE?

While SAGIA was established in 2000 with the aim of overlooking and regulating the economic cities, an off shoot of the company was established called the Economic City Authority (ECA) to ease the pressure on SAGIA and focus more clearly on the task at hand. The ECA employs the 60x24x7 model during its day-to-day workings, which means through its cities it aims to offer any government service in 60 minutes, 24 hours a day, seven days a week. The ECA has a mission to “develop economically vibrant knowledge hubs through innovative partnerships.”