SAUDI ARABIA - Real Estate & Construction
CEO, Jeddah Development and Urban Regeneration Company
Bio
Ibrahim Kutubkhanah earned a BSc in civil engineering from King Fahd University of Petroleum and Minerals in Dhahran, and went on to complete a UCLA Systems Management Program in Los Angeles and a number of other courses in the US, France, and Germany. He has published numerous articles on municipal and urban issues.
The mandate of Jeddah Development and Urban Regeneration Company is the improvement of unplanned settlements or slum areas within the city. Jeddah has around 53 million sqm of unplanned settlements. It is a huge city, of more than 1.7 billion sqm, but less than 5% of the city is unplanned settlements. These emerged many years ago when there was no city planning, and some argue that people just wanted a place to live so they created these slum areas. One of our mandates is to develop those areas. One of those areas was Ar-Roweis. It is in the middle of the city in a prime location surrounded by developed areas and close to the waterfront. This project actually started by attracting the private sector to participate in the development. Several development organizations and companies participated. This included some public funds, such as retirement funds, which participated in the forming of this company. This particular area has a large percentage of non-Saudis and almost 87% of the residents are from the Kingdom. Most of them are laborers, and Saudis only represent 14% of the total population. We have worked hard to move residents to another location that is acceptable and an upgrade to their quality of life. The difference is paid from the development fund, and we do not expect them to pay it back; it is to support and encourage them. It took us a while to develop the fund and convince the developers to finance that fund, but we have now reached almost the final stage where we have an approved master plan from the Minister of Municipality & Rural Affairs (MOMRA), and we have developed the detailed infrastructure design. Right now, we are ready to start moving people out and to do that we have to notify all residents about phases of development as we are not doing it all at once.
We are working on two main projects. We have reached the point where we are now starting actual construction. The first one is the Heart of Jeddah, which is located at the site of the old airport, and stands on an area of around 850,000sqm. We have been working on this project for more than two years and did a complete study and reached the stage now where we have completed the master planning and design of the infrastructure as well as some of the anchor buildings for the project. The project will have some buildings that are unique in Jeddah, mainly the multimodal station, a 175,000sqm facility that will serve as the main metro station in Jeddah with two major metro lines. There will also be a conference and exhibition center, which will be the largest in Jeddah. When finished, the total built up area will be more than 246,000sqm. Just the exhibition area will be 110,000sqm, which is almost the size of Dubai exhibition center. It will have other facilities like a five-star hotel with 44 floors, an auditorium with 2,000 seats, and retail spaces. This reflects the 2030 Vision which envisages a growing tourism sector. We are coupling that with a tourist visa that will encourage those who come to Jeddah for the Hajj to also attend conferences or exhibitions. We see that Jeddah has potential to grow in this area, but right now we do not have sufficient facilities. We have already advertized for both the contractors that are going to build the infrastructure, have opened the bids, and expect to start the final negotiation with the winning contractor shortly.
JDURC is going to develop all the infrastructure, which includes underground utilities, landscaping, a beautiful lake with fountains, and water canals. Then we have special-purpose vehicles for the conference center, the commercial space, and the business park, as well as opportunities to invest in up to five hotels, a medical center, and other facilities. Then the remaining designated residential developments will be sold to the private sector to build. The other project we are starting is the Murooj development in the east of Jeddah. This is a large site that will be a community by itself of around 130 million sqm. It is well located on the two major highways which connect Jeddah and Makkah, and which pass through our site. It is only 20km away from the airport and 42km away from Makkah. Something interesting is that we are incorporating distinct recreational elements, and are coordinating with the High Commission for Recreation of Saudi Arabia to attract some international visitors to come and develop this recreational area with Saudi firms. In order to start, we did a master plan that was approved by MOMRA and did the detailed design for all infrastructure, including primary and secondary infrastructure. We created an SPV with private developers. Out of the 132 million sqm, there are 22 million sqm that are designated as residential land and which have been transferred to this new SPV. The value of that land is our contribution to the SPV. The private sector are paying around 30% in cash, which is around SAR1.6 billion, and the remaining will be funded through banks and presale, including PIF, which is providing infrastructure finance of SAR6 billion.
We are working on other areas near the new airport, which is going to be a first-class facility. We have developed a 5 million sqm industrial area and have already opened the first 1 million sqm of that area. There is another project, which we hope to start in 2017, called the Salman Bay development to the North of Jeddah. We are looking at developing the entire area around the waterfront and providing all infrastructure. This is a project we hope to start in this coming year and it will provide a major recreational hub for Jeddah city. We will also work more on parking. This is the work that we hope will come online in 2017, aside from making substantial progress on our ongoing projects.
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SAUDI ARABIA - Tourism
Interview
Director, UN Tourism Regional Office for the Middle East