Arab News December 06, 2009 Khalil Hanware
JEDDAH: Jazan Economic City (JEC), one of the lynchpins of Custodian of the Two Holy Mosques King Abdullah’s vision to diversify the Kingdom’s economy, has begun major construction work at the site.
There is a huge response from investors for JEC projects. JEC has signed deals worth SR100 billion since its launch in 2006. JEC is attracting major investments from the Far East, especially China, said Zaidan Mohamed O. Yousef, chief executive officer of MMC Saudi Arabia Co. Ltd., the master developer.
JEC is located 60 km north of Jazan city, occupies an area of 113 square kilometers and stretches for 12 km along the Red Sea Coast. It is anticipated that upon completion of infrastructure, JEC will attract $30 billion of industrial, commercial and residential investments creating 500,000 direct and indirect job opportunities.
Primary and heavy industry will drive more investments in JEC with plans in hand for a privately-owned oil refinery, a steel cluster, an iron ore trading hub and a palletizing plant, a slab and bloom plant, and an aluminum smelter complex, he said. JEC has already concluded deals with various international and local companies to execute these investments according to its master plan and strategic location on the Red Sea, which will facilitate importing and exporting goods, Zaidan added.
He said investors in JEC were allowed 100 percent ownership of their projects within the city.
Also the specific tax incentives are attracting investors from all over the world. The JEC, which will be built over 20 years in phases, has so far attracted $5 billion worth of investment from China, he said.
“With the full support of the government, the JEC is in the process of implementation of various projects and very soon we will see major construction activities on site,” Zaidan said.
A new deep sea port will be built in order to support the cargo import and export needs of the industries coming up into JEC. Zaidan said the port would be designed to handle ultra-large vessels that will import various types of raw materials in bulk and also export processed products from the industries. The types of cargoes the JEC port can handle include dry bulk, liquid bulk, containers and break bulk.
“The JEC has completed a full survey of operational channels and we have received approval from the International Maritime Organization,” he said.
As part of JEC port development, a new deep sea navigational route was proposed to link the port to the main international shipping lanes in the Red Sea. The proposed navigation route was approved by the Ministry of Transport and subsequently by IMO.
“This means that the proposed deep sea navigation route meets with the stringent maritime navigation safety requirements of IMO especially for ultra-large vessels,” Zaidan said. The implementation of this deep sea navigation route will enable vessels up to 350,000 DWT to call at JEC port. This will support the requirements of Jazan refinery project’s imports of crude oil, he added.
Zaidan said the JEC developers had engaged Halcrow Group Ltd. (a UK-based international port consultant) for the detailed engineering design of JEC port.
He added the phase 1 development of JEC port would see the construction of at least 2 multi-purpose berths, 2 liquid product berths and a single buoy mooring. “The port will contribute to the provision of job opportunities in various fields related to cargo, storage and all support and logistical services,” he said.
JEC has signed two power contracts worth SR300 million with Saudi Electricity Co. (SEC). Recently, actual construction works commenced at the power station project and are expected to finish within 24 months, he said.
The project aims to cover requirements of JEC’s first phase projects up to the time of concluding construction works in the main power plant of the economic city.
“This power plant is a substation linked to SEC’s station at Alshigaig with a transmission line, and will operate up to the time of operating the main power plant of JEC’s project, which will produce 2,400 megawatts, despite our plans of completing the first phase of the main power plant by 2015 with production capacity of 1,200 megawatts,” Zaidan said. He also explained that JEC would seek to transform this substation into a linkage station between the main power plant of JEC and the SEC.
Zaidan said South Steel Co. has recently received a loan of SR600 million from Saudi Industrial Development Fund, which is considered one of the largest loans granted by the fund for the industrial iron and steel sector in the Kingdom this year.
He said the company had already signed several agreements with some strategic partners, and other contracts with major international companies for supplying state-of-the-art equipment and machinery. The project aims to cover the Saudi market’s increasing demand on steel.
JEC has entered the economic transformation torrent by beginning the actual execution of projects. The city will work on adding more projects to the region and the surrounding governorates in order to develop the humanitarian and economic sides of the area in real estate investments, both residential and commercial, Zaidan said.