Saudi Industrial Property Authority Signs Land Agreements for Jeddah-2 Industrial City Projects

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Industrial Property Authority (MODON) (Riyadh, Saudi Arabia), Saudi Arabia's independent public agency, has signed land allocation agreements for industrial projects in the Jeddah-2 industrial city. The agreements were signed by the project's investors and Dr. Tawfiq Bin Fawzan Al-Rabiah, director general of MODON. Sources have indicated that 1,767,815 square meters of land have been allocated for setting up 163 factories. The cost of each factory is estimated to range from $266,000 to $1 million. The process of designing the building and floor plans is expected to begin shortly.

MODON was set up in 2001 to oversee land allocation for industrial cities and projects in Saudi Arabia, which is developing several industrial zones. Dr. Al-Rabiah has indicated that land is available in these industrial cities for use in industrial, residential, services or commercial projects.

MODON is working on developing the Jeddah-2 industrial city, with projects costing up to $533.3 million. The industrial city project, located 35 kilometers from Jeddah on the Jeddah-Leeth-Jazan highway, is considered to be one of the largest industrial developments in Saudi Arabia. Earlier, MODON signed the first industrial project agreement with PepsiCo Corporation (NYSE:PEP) (Chicago, Illinois), allotting 300,000 square meters for PepsiCo's proposed production facility. This project, with an estimated investment of $266 million, is expected to be PepsiCo's biggest industrial unit in the Middle East and Africa. According to project officials, this facility will manufacture soft drinks, water cylinders, waters cans, and juices.

Recently, MODON signed a 30-year district cooling service contract on a build-operate-transfer basis with The New Trading & Contracting Company SAL (Saida, Lebanon). The system is expected to provide the industrial city with a power generation capacity of 80 MW and a 100,000-ton cooling service. A steam system also will be part of this project. These services are expected to assist factories and industrial establishments in the city by improving productivity and conserving energy.

MODON has announced that it will begin work on projects to build infrastructure in the Jeddah 2 industrial city, including the development of a network of sidewalks, roads and parking facilities. Irrigation and water treatment facilities, drainage and sewage systems, and rainwater harvesting systems also will be developed. Distribution hubs for electricity transmissions, street lighting, and telecommunication systems will be part of this project. The basic infrastructural projects are expected to be completed by 2011. Project officials have estimated that the total investment in these projects will be about $425.46 million. The investments will be carried out as follows:

• $53.33 million toward drainage, sewage and water treatment
• $62.2 million for electricity conduction projects
• $293.3 million toward cooling and steam system
• $16.26 million for construction of roads

In a related development, MODON is inviting tenders for project consultancy and supervision of the second phase of the Jeddah-2 industrial city development. The scope includes execution and maintenance of basic infrastructural facilities. In June, the company invited tenders, and later request for proposals, for development and operations of the water system.

MODON is developing 18 industrial zones in Saudi Arabia, including Madinah, Tabuk, Aran, Jizan, Al-Ahsa, Najran, Asir, Al-Kharj, Qasim, Al-Jouf, Makkah, Riyadh-1 and 2, Damman-1 and 2, and Jeddah-1 and 2. The industrial zones in Sudair, Al-Taif and Zulfi are in the planning stages. The total land allocated for these projects is about 237 million square meters, with investments in excess of $53.3 billion. The industrial cities are expected to provide employment to 300,000 workers.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.