Bidding to begin for Hail economic city construction

24 October 2008

Tender plans are sign of progress on project that has struggled to attract interest.

Kuwait’s Al-Mal Investment Company will invite bids in January for the first construction packages at Prince Abdulaziz bin Mosaed Economic City in Hail.

News of the tenders is one of the first tangible signs of progress on the economic city, which has struggled to attract commercial interest since it was launched in June 2006.

The first packages are expected to cover ground preparation works, infrastructure and the construction of several sites within the city, including industrial, residential and commercial zones, as well as housing and other facilities for workers.

The developer has identified the start-up area within the 156-square-kilometre site and is in the process of appointing a company to draft the detailed masterplan and carry out design engineering.

An award for the masterplan contract is expected to be announced by the end of November, after which work will begin on the plan.

While there had been doubts over the scope of the project, there are unlikely to be any major alter-ations to the blueprint at this stage, says one source close to the project.

“I do not think there will be any significant changes to the scope,” he says. “It is not the time to make changes right now.”

The decision to press ahead with the scheme comes after months of speculation over the future of the kingdom’s economic city programme, in particular the economic city at Hail. Sources in the kingdom have suggested that the Saudi Arabian General Investment Authority (Sagia) - the government body that is overseeing the programme to develop the six cities - has been placing too much emphasis on King Abdullah Economic City (Kaec) near Jeddah, and that this is damaging prospects for the other five cities (MEED 20:6:08).

In August, Sagia said it was looking to bring in another developer for Prince Abdulaziz bin Mosaed Economic City as the existing developer, Rakisa, was struggling to make any significant progress (MEED 8:8:08).

A month later, on 16 September, Al-Mal issued a statement to the Kuwait Stock Exchange announcing it had entered a deal with Sagia to become the city’s sole developer. Prince Abdulaziz bin Mosaed Economic City is being developed as a transport and logistics hub, with the aim of attracting up to $8bn in investment over 10 years.

The city is designed to have a series of zones including a logistics and transportation centre, a petrochemicals industries centre, a mining zone, an entertainment area, and an area for agricultural industries.

Some 70 per cent of the region’s employment stems from farming and the agriculture zone will also support food-processing services.

Prince Abdulaziz bin Mosaed Economic City will have an international airport with capacity to handle up to 3 million passengers a year, and a railway station capable of processing 2 million passengers a year. New roads are also being planned to link Hail to Iraq, Jordan and Medina.

Once construction is completed, the city should provide 55,000 jobs and homes for 300,000 people. Hail is located 600 kilometres north of the capital, Riyadh.

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