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The Prince Abdul Aziz ibn Musaed Economic City (PABMEC)

The Prince Abdul Aziz ibn Musaed Economic City (PABMEC) in Hail, 720 km north of Riyadh, offers more than 360 investment opportunities in agricultural and mineral industries as well as in educational and real estate projects. The city will cost SR30 billion ($8 billion), according to a source at Rakisa Holding, the company which will oversee the project along with the Saudi Arabian General Investment Authority (SAGIA) and the Hail Development Authority.

Named after the first governor of the Hail region, PABMEC will have its own airport and railway. Some 80,000 people are expected to take up residence in the new city which will also have business and leisure centers.

Custodian of the Two Holy Mosques King Abdullah laid the foundations of the city in June 2006. It will be built over 10 years and include agricultural and mineral industries, an education zone and a residential area with 30,000 housing units. Extending over 156 million square meters, it will also house 3,000 office units and a logistical supply and services center.

Hail is an agricultural area rich in mineral resources with nearly 600,000 inhabitants. The venture is part of the government’s efforts to boost the less developed regions in the country.

“The government will allocate a large part of the budget surplus to development projects in regions which did not get their full share,” King Abdullah told Hail residents while launching the project. The planned economic city will provide “a strong boost to development of the region,” he said, adding that it will create 30,000 jobs.

Saudi Arabia posted a record budget surplus of $57 billion in 2005 on the back of surging crude prices. It is now channeling billions into development projects. But the Kingdom is still struggling to provide work for its unemployed nationals despite a massive Saudization drive.

“PABMEC is envisaged to be the Middle East’s largest logistics and transportation hub,” Abdullah Ibrahim Al-Rakhis, chairman of Rakisa Holding, told a CEO Forum in Beijing recently. “This integrated project offers international investors and entrepreneurs immense opportunities for making profitable capital investments with assured high returns or for starting business and industrial ventures,” he said. Al-Rakhis said investors and companies participating in the consortium would be provided all necessary assistance, guidance and facilities by the project’s developer. SAGIA is identifying feasible projects and building ventures in diverse sectors ranging from infrastructure and housing to petrochemicals, agro-processing, mining, education, entertainment and tourism.

“PABMEC is being built in the Kingdom’s strategically located, fertile and mineral-rich northern Hail region. It is backed by the Kingdom’s excellent infrastructure, liberal investment policies and stable economy,” the Rakisa chief told the forum. “These conditions provide an ideal investment climate and make Hail economic city one of the most attractive investment destinations in Saudi Arabia today.”

A joint stock company, North Gate Economic City (NGEC), will be established with a capital of SR5 billion to develop PABMEC. “NGEC will develop the necessary infrastructure for a fully-integrated economic and residential city to be built over an area of 156 million square meters,” said Ali Mahmoud, head of investment at Abu Dhabi Investment House, one of the foreign partners in the project. “A team of top international advisers was assembled to ensure that detailed feasibility studies were done for each business activity and cluster,” he explained, adding that the team included leading names such as McKinsey & Co. and Dornier Consulting.

In addition, top infrastructure experts such as Bechtel, Turner and KBR are involved on the infrastructure side.

“More than 360 investment opportunities have been identified and discussions have been initiated with anchor investors such as CEMEX, a global leader in cement production, Nestle, and other potential investors from East Asia,” Mahmoud told Arab News.

North Gate has identified the main revenue streams of the project as the selling and leasing of land, license fees from concessions, providing basic services and investing directly in businesses within the city, he explained. He said the land in Hail was secured at a nominal price compared to current market prices.

The city will have 12 distinct components for trade and services in sectors such as agriculture and food processing, mining, education, housing and entertainment. It will have a premier commerce and industrial hub to promote diversification in the economy. It will be the largest fully-integrated economic city in the Middle East providing transportation and logistics services.

PABMEC will exploit the strategic location of Hail as a link to a number of trade routes by building infrastructure for transportation services. There will be specialized educational services in the form of colleges, research and training centers as well as public and private schools in order to feed growing market demand. “It will also make the best out of the blessed region with substantial agricultural output by establishing a special zone dedicated to agricultural services,” said one source who also disclosed plans to set up an agricultural research center in the city.

Local mineral processing plants that add value to extracted raw materials are set to be a core activity. So too are the entertainment facilities expected to attract around 700,000 tourists annually.

About 30 percent of the funding will be allocated to the housing sector to establish about 30,000 residential units while more than SR6 billion will be earmarked to improve overall infrastructure of the region especially in telecommunication services, water and power. The project aims to use the Kingdom’s second competitive advantage after energy, its strategic location as a link between East and West. This will be leveraged through the establishment of a fully-integrated economic city with the main anchor being transportation and logistics services, says SAGIA Governor Amr Dabbagh. Produce and minerals arriving from the north of Saudi Arabia and surrounding areas within Hail region will be traded, marketed and processed adding value to the raw material, he explained.

Hail’s strategic location at the heart of the Kingdom’s north and the fact that it is only one hour by plane from 11 Arab capitals made it a prime candidate to host a new economic city. “PABMEC is a leap forward in the economy of the Middle East as a whole and not just that of Saudi Arabia,” said Al-Rakhis.

Given Hail’s location, geographic and historic surroundings, it was only natural to include an entertainment zone within this development. Furthermore, Hail is ideal for sports enthusiasts. PABMEC expects large numbers of tourists will provide additional investment opportunities in hospitality and tourism-related industries. Visitors will also benefit from a host of planned advanced health care facilities.

Hail airport’s strategic location will allow it to serve as a hub for logistics services, centrally located within the Kingdom at the crossroads of all surrounding navigational and business routes.

The logistics “Dry Port” is a strategically located hub for transportation to and from Hail, benefiting from its site on the crossroads of all land, air and train routes that link the Kingdom to the world, creating a northern gateway to the Kingdom. Located near the airport, the port will provide services for all economic sectors in the city, including temporary storage facilities and cargo transporting, equipped with the latest in warehousing, handling and transporting services from trains to trucks and vice versa, transporting approximately 1.5 million tons of cargo by year 10 of operations. The city’s passenger station will serve thousands, domestically and internationally, as a transit stop for pilgrims, travelers and tourists alike. It will also provide services to land travelers whether by car, bus or train. The station will be used by approximately 2.3 million travelers annually within a decade. The total cost of building and developing the passenger station is some SR455 million. The Business Center will provide full financial and business support services for projects and institutes alike, enhancing businesses of all sizes in the region and creating a healthy competitive economy.

PABMEC has the goal of enriching and developing professionals and human resources and providing a center of education and training for young Saudi men and women, while employing graduates in a range of different economic activities. The Educational City will boast a center for ICT related studies, many schools and training centers that provide courses qualifying young job-seekers for all markets. Research and Development firms will also support other industries in the city, introducing the knowledge economy to the region. By its fourth operating year, the knowledge area will have over 40,000 students enrolled in schools, training centers and universities.

The Center of Agricultural Industries and Services depends mainly on the high agricultural output in the north and the surrounding areas, making up one of the Kingdom’s main food sources. The center provides all basic agricultural services and value-added agricultural processing industries, in addition to storage, warehousing and distribution. This center promises the region’s transformation into a mass agricultural area, with Hail the main food source and distributor for the region. The Agricultural Industries and Services Center is expected to attract over SR505 million in investments alone.

The future economic activity at PABMEC will require adequate residential facilities, offices and supporting services. These residences and offices will accommodate tens of thousands of employees in the city, where over 80,000 residents are expected to live. All the real estate opportunities will pull in over SR10 billion in investments. The city will not be complete without supporting health services, hospitals and clinics and social services, all helping to complete a fully functional society residing there.

Major Saudi shareholders in the Hail project are: Ahmad Hamad Al-Gosaibi and Brothers, Al-Abdullatif Group, Al-Jouf (Muflih Kayid) Company, Al-Rashid Trading and Contracting, Hail Investment and Development Company, Rakisa Holding, Tanmiyat Group and Yusuf Bin Ahmed Kanoo Group. Foreign investors include Kuwait Investment Company (KIC), Public Warehousing Company (also from Kuwait), Gulf Finance House, National Investment Company (both from Bahrain), Abu Dhabi Investment Authority and Abu Dhabi Investment House.

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December 29, 2007 - Posted by | Saudi Arabia | , , , ,

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