SOUTHERN SHUNEH, Jordan (AP) — A $100 billion city-from-scratch in Saudi Arabia is to be completed by 2035 and will serve as the main logistics and manufacturing hub for countries on the Red Sea, the world's "largest new emerging market," said the CEO of the company in charge of the mega-project.
The business model of an entire city being built by the private sector was so unusual that it required adjustments in the beginning, said Fahd al-Rasheed, the Group CEO of Emaar Economic City (EEC), which is building the King Abdullah Economic City.
"Putting that first phase together is the most difficult point," he told The Associated Press in an interview on the sidelines of a regional conference of the World Economic Forum hosted by Jordan. "Once you figure it out, the sky is the limit, so we are in that phase now."
He said the company has posted 20-30 percent growth in revenues for the past five years. "We are obviously creating a product that people want to invest in, and we are creating enough value that we can make profit," he said.
EEC's mother company, the Dubai-based Emaar Properties, built Burj Khalifa, the world's tallest building.
The new city, located about 100 kilometers (60 miles) north of Saudi Arabia's current commercial hub of Jiddah, is envisioned for 2 million residents, with industrial parks, hospitals, schools and golf courses.
Its port is currently capable of handling 2.7 million containers per year, with capacity to grow to 20 million containers per year once completed. The city is also being linked by high-speed train to Jiddah and the holy cities of Mecca and Medina.
The city currently has about 3,000 residents and about 7,000 non-construction jobs, al-Rasheed said. The industrial park has attracted close to 100 companies, with nine already operating there and 20 building facilities.
He said the target for 2020 is 50,000 residents and 28,000 jobs, with 25 percent of the city, or 45 million square meters, to be developed by then. The date for completion is 2035, though al-Rasheed acknowledged that it's an ambitious deadline.
The project is part of Saudi Arabia's efforts to "diversify away from oil" and create jobs, he said.
The country's youth unemployment rate is more than 28 percent, on par with the regional rate for the Middle East and North Africa.
Al-Rasheed said the city is to become the main manufacturing and logistics hub for the Red Sea region and one of the world's top 10 ports. Twenty-three percent of global trade goes through the Red Sea, he said, and countries bordering it have seen high growth rates, making the area "perhaps the largest new emerging market."