Sipa invites developers to invest in Sudair City

Largest development in Saudi Arabia will cost Dh146 billion.

The Saudi Industrial Property Authority (Sipa) has invited more than 60 developers to invest in Sudair City, a massive industrial development that will cost Dh146 billion (US$40bn) to build. It will be the largest such development in Saudi Arabia, exceeding the size of the King Abdullah Economic City. Details of the masterplan, which is being drawn up by Singapore's Jurong International, are yet to be officially released, but Sudair City will be spread across a 258 million square-metre site north of the capital, Riyadh, and is likely to include a mix of commercial, industrial, residential, technological, and sport and leisure components.
The project, which is expected to accommodate a population of one million people, is aimed at easing congestion and reducing migration to Riyadh, while providing another avenue for Saudi Arabia to reduce its dependency on an oil-based economy and transform itself into a modern industrial state. The development will be largely financed by the Saudi Arabian government, with government-owned land being leased to private developers.
Tawfig al Rabiah, the director general of Sipa - a wing of the government that was set up to develop new economic cities - said that land would be leased to developers on a long-term basis, with the possibility of developers having leasehold agreements of up to 99 years. "We have sent out expressions of interest to more than 60 companies," he said. "We hope to have this finalised by the end of the year, with the first construction work beginning in the first quarter of 2009. Sipa will also develop part of the project." Mr Rabiah said that developers would most likely form consortiums for the project, with construction being phased over a 20-year period.
He also said that the development would be supported by the North-South Railway, a 2,400km long rail network under construction in the kingdom, as well as an airport. A number of economic cities are planned for Saudi Arabia, which are expected to contribute Dh550bn to the country's gross domestic product by 2020, according to figures from the Saudi Arabian General Investment Authority. The largest city under construction to date is the King Abdullah Economic City, a 168 million square-metre project being developed on the Red Sea coast by Emaar the Economic City, a subsidiary of the UAE's Emaar Properties.
Investment in the project has so far reached Dh128bn, although it is estimated that the entire project will cost Dh183bn, making it the most expensive private sector development in the GCC. Other economic cities in the pipeline include the Dh24bn Knowledge Economic City in Medina, the Dh29 bn King Abdulaziz bin Mousaed Economic City in Hail and the Jazan Economic City south of Jeddah.
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