Keen to share the cost, workload, and rewards of developing the city and its environs with the private sector, the Jeddah Development and Urban Regeneration Company (JDURC) is seeking to engage private stakeholders through public-private partnerships (PPPs).
STRUCTURE: Once the master plan for a project is complete, the JDURC has the authority to establish subsidiaries with which vetted private sector firms can partner, bringing with them expertise and capital, while the municipality contributes the land, licences, and basic infrastructure of roads and storm water drainage. A further contribution from the municipality comes through the work of the JDURC, which according to Nidhal Abdulrahman Taibah, vice-president for development at the JDURC, “has enough latitude with the municipality to facilitate licence applications and negotiate regulations and easements with great effect” to streamline the relevant bureaucratic processes. Several projects are in place already, with two in particular offering a broad range of investment opportunities.
THE HEART OF JEDDAH: Historically, Al Balad served as Jeddah’s city centre, but lack of planning and ageing infrastructure in this area have resulted in many businesses moving away, degrading the city’s core. This project aims to re-centre the city by developing a “downtown” focused on the main multi-modal transit station of the planned Jeddah Metro, which is being built on the 850,000-sq-metre brownfield site of the old airport. The exact design depends on the private partners engaged, but the main aim is to create enough job opportunities to make the site attractive for investors, job-seekers and residents. The site will include a convention centre; two luxury and two four-star hotels; a mall; a medical tower; as well as high- and low-rise residential units and educational facilities.
The Heart of Jeddah Development Company, created for the purpose of developing this project, is 100% owned by the JDURC. However, the company is ready to start signing agreements with individual private partners; given the multiple uses of this site, it is looking to engage investors with specific skills and experience related to the developments outlined above. A completion date will not be set until authorities have a clearer picture of the partnerships, but ground will be broken on the infrastructure in September 2014.
WADI AL ASLA: To the east of Jeddah, Wadi Al Asla covers 120 sq km and will be a mixed-use residential and leisure development. It will include accommodation for 170,000 permanent residents and an entertainment zone, with 16 ha earmarked for amusement and safari parks, a motor sports area and an equestrian centre. There will also be three stadiums – two for football and a third stadium that will cover other sporting activities. The Ministry of Health has requested about 1m sq metres of land for a 1000-bed hospital, which may be geared toward maternity and child care.
Environmental sustainability is central to the vision for the site. Some 7m sq metres of land and 180,000 trees are being irrigated with treated sewage water, and an agreement has been signed with King Abdulaziz University to have a 1m-sq-metre research and development campus on the site. A pilot programme has started and is currently capturing enough gas, mostly methane released by decomposing waste in the city’s old landfill site, to generate 5.4 MW of power.
A partner is being sought for the power generation element of this project. A subsidiary has been established, using the PPP model, to build the housing component; in return for this concession, the partner will construct the infrastructure for the entire site, including roads, sewage, water and electricity. Ground has already been broken on this, with rough grading for the roads under way. As of February 2014, the JDURC was preparing to engage a consultant to help package the remaining investment opportunities and these contracts should be ready by the fourth quarter of 2014.
With a number of further projects of varied size and scope on the horizon, and those currently under construction progressing, both direct and indirect opportunities for investment in Jeddah look set to grow.
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