The planned Jizan Economic City (JEC), launched by Custodian of the Two Holy Mosques King Abdullah at the beginning of the month, will have an industrial zone, a logistic service center, a power and desalination plant, a residential zone and a port. It is expected to draw SR100 billion in investment and ultimately create half a million jobs.

Malaysia’s construction giant MMC and Saudi Binladin Group have been awarded the contract for the project, the Kingdom’s fourth new economic city. Many international companies have already shown interest in investing in it.

According to sources at the Saudi Arabian General Investment Authority (SAGIA), the main facilitator of the project, three giant factories will be established in the city with Chinese investment at a cost of SR15 billion.

When announcing the project, King Abdullah said that SR375 million worth of free shares in the SR15 billion JEC development company would be allocated to people of limited income in the Jizan region. He also disclosed plans to build an oil refinery in Jizan. The Ministry of Petroleum and Mineral Resources has confirmed that it is conducting a feasibility study on the project, believed to be an export refinery and to be privately owned.

King Abdullah visited Jizan earlier this month as part of his tour of the south where he launched a substantial number of development projects. Jizan municipality had set out its own plan for the development of the place, including a new seaport, a railway line to Jeddah, an international road link, expansion of residential districts to accommodate the growing population and real estate investment in the region.

In comments published in the local press, Jizan Governor Prince Muhammad ibn Nasser spoke about the government’s efforts to expand the present Jizan seaport, which holds a strategic position being close to Asir, Najran and Baha as well as the Horn of Africa. However, he pointed out that only 30 percent of the port’s capacity was utilized since its inception.

A royal decree has been announced setting a five-year moratorium on tariffs for vessels using docking at Jizan in a bid to increase port traffic. The government also cut loading and unloading charges by 40 percent and marine service charges by 35 percent; goods were exempted from storage charges for 30 days.

The new economic city will be located about 50 km north of Jizan city and 725 km south of Jeddah and will cover an area of 100 million square meters, SAGIA sources said.

“JEC will focus on heavy industries requiring intensive use of energy, which is readily available in the Kingdom,” SAGIA said in a statement.

Jizan is located at a strategic position close to international maritime routes on the Red Sea as well as the Indian Ocean. “This will facilitate marketing of JEC products in Asia, Africa and Europe,” SAGIA says.

The city will also have secondary industries related to agriculture and fisheries and a full-fledged research center to support them. A regional center for the distribution of iron ore will also be established.

Developers will bear all the cost for building infrastructure required for the city.

MMC, the Malaysian company in the joint venture awarded the contract to build the city, is one of the largest companies in Malaysia. It specializes in engineering, construction, mining, transportation, logistic services, energy and power generation. It also owns and manages the main ports in Malaysia. Saudi Binladin Group, the Saudi side of the joint venture, is one of the largest construction firms in the Kingdom and has built several industrial and residential cities around the world. It employs more than 55,000 people.

SAGIA chief Amr Dabbagh said the king’s announcement on the JEC and his support to the project were in line with the government’s strategy to ensure development throughout the country. He said JEC would focus in particular in labor-intensive industries. This is in contrast to projects in Eastern Province, presently the hub of Saudi industrial development, which are primarily capital-intensive. There will be advanced centers to train Jizan people.

Abdul Jabbar Shahabuddin, chairman of MMC International, said the JEC’s industrial zone would cover two-thirds of the city and would include an oil refinery, iron and steel industries, a copper processing plant, an aluminum smelter, fisheries and agro-based industries. “We feel privileged to be entrusted with the responsibility to fulfill the aspirations of a nation,” Shahabuddin said.

The project will be built over 30 years at a cost, under initial planning, of $30 billion, said MMC. It expects an investment of $17 billion alone in JEC’s industrial zone.

Jizan’s hinterland is known to possess very large deposits of minerals including limestone, dolomite, marble, basalt, silica and gypsum that are expected to encourage creation of mining and associated processing industries. The region, which extends some 300 km along the Red Sea, also has considerable agricultural and tourism development potential.

Substantial regional investor interest has been generated in the planned city from players such as Abu Dhabi Investment House, Kuwait Investment Company, Bahrain’s Gulf Finance House and UAE real estate giant Emaar Properties.

The project includes a power and desalination plant to support industry and the residential element. It will have an eventual capacity of 4,000MW of electricity, said Feizal Ali, CEO of the Malaysian group. The nonindustrial zone will comprise the central business district, residential areas, a marina and facilities for education, hospitality and recreation, he said.