Arab News, Thursday, Oct 14, 2021 | Rabi Al-Awwal 8, 1443
Six giga-projects that epitomize Saudi Arabia’s $7 trillion development plan
Saudi Arabia:
Six ambitious landmark projects being developed in the
Kingdom aim to help transform the economy while showing the world and all Saudis
the nation’s geographic wealth, cultural heritage and hospitality, economic
ambitions and aspirations for environmental conservation.
These projects are needed now more than ever to drive foreign investments and
increase spending in the economy, as the Kingdom is expecting $7 trillion in
investment and government spending to materialize by the end of the decade.
But continued liberalization and economic reforms will be needed to ensure their
success, as will continuing foreign investment, according to a finance CEO and
an economic consultant and former economics minister.
Nasser Saidi, former economics minister of Lebanon, now Dubai-based economics
consultant, said: “These projects need to be seen in the context of the broader
objective of undertaking a structural transformation of the Saudi economy.
“Faster and deeper economic diversification is imperative for sustainable job
creation for its youthful population, and to address the challenge of the global
energy transition away from fossil fuels, Saudi’s main source of income and
exports.
“By investing in new sectors (be it tourism, the digital economy or renewables)
and in regional economic development on its western seaboard, Saudi Arabia is
moving away from over-reliance on oil and redefining the image of the country.
“This is why gigaprojects continued (and related contracts were signed), even
during the pandemic, while fiscal tightening was underway.
“Foreign investors can take some comfort from Saudi’s promising high-growth
potential (for example in the previously untapped tourism, media and leisure
sectors) and associated returns on investment.
“But these are all long-term, long-gestation projects. That is why
liberalization measures (full foreign ownership, facilitating long-term
residence, reforming labor markets, allowing competition, protecting property
rights, insolvency and bankruptcy laws) are important to attract FDI.
“Foreign investors can also take comfort from the fact that the gigaprojects are
political standard bearers; they must be seen to be successful and they will
continue to be funded from PIF, SCB reserves, tapping debt markets, etc.
Notably, they will be much easier to do currently when oil prices are high at
$80-plus.”
Tarek Fadlallah, CEO of Nomura Asset Management in the Middle East, told Arab
News: “Tourism-related projects have been given a boost by the fact that Saudis
have been staying at home. I saw it myself on a recent visit to Riyadh. The
whole restaurant and leisure sector has been transformed by the pandemic.
“Projects like AlUla and Qiddiya are more advanced than some others. Foreign
companies and funds have actually invested in them and brought them nearer
fruition.
“The gigaprojects strategy is hugely ambitious, but if they pull it off it will
be a vital contribution to the success of Vision 2030. It will continue to need
foreign investment to help make it work.”
The
six projects are:
The
Red Sea Development Company
Aiming to be a world leader in regenerative tourism, the Red Sea Project is a
luxury sustainable tourism project on a 28,000 square km site on the western
coast of the Kingdom.
The Red Sea Development Company, established in 2018, is fully owned by the
Public Investment Fund and will lead development of the project.
Directly employing 35,000 people, the project showcases the landscape and rich
cultural heritage of the Red Sea Coast. Occupying an archipelago of more than 90
islands — some of them untouched — featuring dormant volcanoes, deserts and a
wide variety of wildlife and mountainous scenery, it will emphasize
environmental preservation while relying exclusively on renewable energy
sources, with a ban on single-use plastics and zero waste-to-landfill.
The masterplan has been the result of collaboration between WATG and Buro
Happold and includes design concepts from the world’s leading architecture
firms. Work on infrastructure has already begun with 80km of new roads
completed, and 10,000 workers are based at a construction village.
Qiddiya
Aspiring to be an entertainment, sports and arts hub, Qiddiya is one of the new
gigaprojects within the Kingdom’s 2030 Vision. The project is built on five main
pillars: Sports and wellness, nature and environment, parks and attractions,
motion and mobility, and arts and culture.
Qiddiya Investment Company is another closed, joint-stock company established in
2018 and owned wholly by the PIF. Its objective is to boost the Kingdom’s status
as a leading tourist destination.
A “record-breaking” Six Flags theme park will contain 28 rides and attractions
in six themed lands. A key attraction will be the Kingdom’s first water theme
park. Featuring 23 rides and attractions, it is expected to be the largest in
the region. Qiddiya will also feature luxury-tented retreats, animal encounters
and outdoor adventure and exploration.
A speed park will include an FIA grade 1 racetrack dedicated to motorsports fans
as well as a golf course designed by Jack Nicklaus, one of the greatest golfers
of all time, open to both elite and amateur golfers.
The Riyadh-based project is also establishing several arts and cultural centers,
including an arts complex, festival grounds, a multiplex cinema and a performing
arts center.
Aseer Development Project
Crown Prince Mohammed bin Salman began a tourism strategy on Sept. 28 to develop
the southwestern Aseer region with SR50 billion ($13 billion) to attract more
than 10 million visitors by 2030.
Tourist attractions on Aseer’s mountain peaks will turn the province into a
year-round destination, exploiting the tourism potential of its geographical and
natural diversity, culture and heritage.
In addition, it will provide new job opportunities, boost life quality and
upgrade essential services and infrastructure in the region.
PIF plans a $3 billion investment to build 2,700 hotel rooms, 1,300 residential
units, and 30 commercial and entertainment attractions in Aseer by 2030.
Diriyah Gate Development Authority
On July 15, essential infrastructure construction of the world’s largest culture
and heritage city began along Riyadh’s Western Ring Road as part of the Diriyah
Gate Development Authority’s development.
The authority has been tasked by the Saudi government to redevelop the
“birthplace of the Kingdom” into a world-class destination, and said it will be
completing and delivering its first phase assets by early 2022.
The $50 billion gigaproject will feature some of the world’s most luxurious
restaurants and hotels, with all structures built in traditional Najdi
architectural style.
The first phase of the project’s masterplan will focus on a landscaped park,
Wadi Hanifah, and Bujairi Terrace, featuring 18 new restaurants, several of
which will be Michelin-starred, while others will offer local Saudi delicacies.
NEOM
A gigaproject, located in northwest Saudi Arabia, on the Red Sea coast, NEOM is
seeking contractors and investors.
In mid-September, about 150 design and construction companies visited the
project for four days to explore potential partnerships and opportunities.
The project features construction villages with labor communities of up to
30,000 workers, as well as offices, warehouses and construction service
establishments.
In late July, the NEOM Company and King Abdullah University of Science and
Technology launched a joint project to build the world’s largest coral garden at
Shushah Island in NEOM.
The initiative is a perfect example of Saudi Arabia’s promise to protect 95
percent of the natural environment within NEOM. The Shushah Island Coral
Reefscape, which spans 100 acres, will demonstrate coral reef restoration
conservation in a changing climate. The project is expected to be completed in
2025.
AMAALA
AMAALA is an ultra-luxury project at Saudi Arabia’s Red Sea beach, focusing on
wellness, healthy living and meditation.
The project will offer guests facilities and services that provide a luxury
experience in areas such as arts, culture, fashion, wellness and sport services.
AMAALA announced on July 27 a partnership with the Saudi Art Council for this
year’s 21,39 Jeddah Arts to celebrate creative and artistic talent from the
region and beyond.
The exhibition will include a portion of AMAALA’s vision to promote the creative
ecosystem of Saudi Arabia through art residencies, platforms and incubators.\\
On June 22, AMAALA received top honors at the Transform Awards 2021 with its
partners, Landor & Fitch, winning the prestigious Grand Prix prize, which
showcased the project’s visual and creative strategy rebranding.
In addition, on March 22 AMAALA announced the signing of a memorandum of
understanding with the Saudi Contractors Authority, enabling AMAALA to share its
potential projects with members of the SCA, and then receive information about
interested bidders.