Saudi Arabia’s General Authority of Civil Aviation (Gaca) has awarded a contract to the local Fawaz Abdulaziz al-Hokair Company for a mixed-use development project adjacent to Jeddah’s King Abdulaziz International airport (KAIA), according to a recent report by the Saudi Press Agency.

The value of the contract and the project timeline were not disclosed.

It is understood the land for the planned airport district has also been handed over to the contractor. The development will include two hotels, among other facilities.

A future airport free zone is also planned adjacent Riyadh’s King Khalid International.

The free zones aim to attract foreign business through a more relaxed policy in terms of trade licences and visa and taxation regime. The free zones are expected to be large enough to include manufacturing facilities.

The development of an aetropolis - a mega district that typically includes residences, business parks, logistics and leisure centres anchored around airports - has been becoming popular in recent years.

Dubai South is an example of a developing aetropolis in the Mena region.

Oman has also recently announced preliminary plans to develop real-estate projects in locations within the proximity of its international airports.

Oman Airports Management Company (OAMC), which operates Muscat and Salalah International airports, has indicated it is open to all funding options for the airport cities it plans to develop.

The Jeddah airport is the busiest airport in Saudi Arabia and is the main gateway for hajj and umrah pilgrims visiting Mecca.

It processed more than 30 million passengers, equivalent to more than a third (36 per cent), of the kingdom’s overall passenger traffic in 2015. The airport has been undergoing redevelopment to expand capacity. The Saudi Binladin Group picked up two contracts worth a combined $7.2bn in 2010 for the overhaul of the existing terminal and the construction of a new one. The new terminal, which has a design capacity of 30 million passengers annually, is scheduled for completion next year.

Gaca also tendered an operation and maintenance (O&M) contract for the Jeddah airport in June. Two firms, one comprising a joint venture of France’s ADPM and Saudi Binladin Group and the other, Singapore’s Changi International, submitted an offer for the contract on 20 July. The tender, however, was cancelled shortly after the bids were received. It is unclear whether Gaca plans to retender the contract.