Saudi Arabia moves to the next phase of its economic development with the building of five mega-cities, specially designed to attract direct foreign investments and high spending tourists
By Dauda Lawal /just back from Saudi Arabia
On our way from Jeddah to Medina, a huge billboard arrested my attention. It bore, in incredibly outsized font, the inscription “King Abdullahi Economic City”, aka KAEC.
KAEC is pronounced CAKE. After a distance of about 10 kilometres, another billboard reminded us of the existence of KAEC. All through the journey, I counted about 10 of such. I wondered what KAEC could actually be. In my hotel room in Medina, I had the good fortune of catching on CNN, the Middle East Economic Report, which was focusing on KAEC.
KAEC, I got to know, through Amr al-Dabbaqh, Governor of the Saudi Arabia General Investment Authority, SAGIA, who was interviewed, is one of the six cities currently being built in Saudi Arabia. Each of the cities is conceived to turn the kingdom into one of the top 10 business and tourist destinations in the world.
“This is the vision that drives the development of KAEC, as the destination of choice for all who want to invest, work and live, in and around the KSA,” the governor said. The other cities are Prince Abdulaziz bin Mousaed Economic City, PABMEC; Knowledge Economic City, KEC; and Jizan Economic City, JEC.
KAEC’s construction began in 2005 and will be completed in 2020. Each of the new cities is expected to contribute about $150 billion to the GDP. The first stage of KAEC is expected to be completed in 2010. KAEC, it is projected, will spawn one million jobs. The city is divided into six zones: industrial zone, sea port, residential, sea resort, educational and a Central Business District, CBD, which includes the Financial Island.
With a total development area of 173km2(66.8 sqm), KAEC is located along the coast of the Red Sea, around 100km north of Jeddah, the commercial hub of the kingdom. The city is approximately an hour away from the holy Islamic cities of Mecca and Medina by road as well as from all Middle East capital cities by air.
The Saudi authorities explained that they are not trying to out-build Dubai. The new cities, they said, are meant to solve pressing economic and demographic problems like overpopulation, unemployment, and housing, but more importantly, to diversify the oil-based economy. The sea port and its facilities, estimated to cover about 13.8 million square metres, will be the largest in the region with a minimum capacity of over 10 million containers per year. The port will have facilities to handle cargo and dry bulk, and will be equipped to receive the world’s largest vessels. Another key component of the port will be a custom-built Hajj Terminal, with a capacity to handle up to 300,000 pilgrims on their way to Mecca and Medina.
Also, the Central Business District, (CBD) is planned to offer 3.8 million m2 of office space, hotels and mixed-use commercial space. The financial Island, within the CBD, has now been doubled in area to cover 14 hectares of land, which will also be the largest regional financial nerve centre for the world’s leading banks, investment houses and insurance groups.
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