Backed by a booming oil economy, Saudi Arabia embarks on a programme that will make the holy cities of Makkah and Madinah investment magnets for the region, while at the same time enable it to meet the demands of the growing number of pilgrims.

01 December 2006

The ongoing construction boom in Makkah and Madinah is expected to reach a crescendo with the recent announcement of plans to set up mega economic cities and a high-speed railway link between the two holy cities.

The two cities attracts the most visitor numbers than any other Saudi city and with the launch of these mega projects the entire region anticipates an upsurge in economic growth.
With forecasts suggesting that the number of Hajj and Umrah visitors will rise steadily from the present total of 20 million a year, with 30 million reached by 2010, the holy cities are in the midst of a real estate bonanza to accommodate the growth in pilgrim influx. With the announcement of the two economic cities involving a massive investment of SR35 billion ($9.3 billion) in total, the construction sector can look forward to an even busier decade.
The projects are among the four economic cities to be initiated by the Saudi Arabian General Investment Authority (Sagia) in Saudi Arabia, in an aggressive bid to repatriate capital and attract value-added foreign investments. The move is also part of efforts to develop the kingdom's technology base while easing mounting pressure off the country’s three major cities.
Makkah will to be host to the SR10 billion Um Al Qura Economic City project while Madinah will be home to the SR25 billion Knowledge Economic City (KEC).
Two sites have been proposed for the Makkah project – the first along the Makkah-Jeddah Highway, near Makkah National Park, while the second is in Shuaiba, a small township on the Red Sea.
The Knowledge Economic City in Madinah is designed to capture the essence of one of Sagia’s priorities – to develop knowledge-based industries (KBI).
To develop this city, Sagia is liaising with a consortium of Saudi investors led by Savola Group and including PMDC, Taibah Investment and Real Estate Development Company and Quad International Real Estate Development Company, along with the King Abdullah Foundation.
The KEC will be developed over a 4.8 million sq m area and involve a built-up area of nearly 9 million sq m. It will include 4,000 stores and 30,000 residential units.
It will comprise the Taiba Technological and Economic Information Centre, a technology and KBI zone; an interactive museum on the Prophet’s life; a centre for studies of Islamic civilisation; a medical studies, biosciences and integrated medical services zone; an advanced IT studies institute; a campus for medical research and life sciences; a retail zone; a business district; residential zones including high rises, houses, and fully-serviced apartments; shopping malls; and a mosque with a capacity for 10,000 worshippers.
Transportation within KEC will be facilitated via a ring road, elevated above which will be a monorail connecting the city to the Prophet’s Mosque of Madinah within minutes. This monorail will be linked to a planned train station thus facilitating railway access to Makkah, Yanbu, the King Abdullah Economic City in Rabigh as well as the port city of Jeddah.
Construction work is under way on the SR4.2 billion ($1.1 billion) expansion of the Jamarat Bridge in Mina, east of Makkah. Saudi builder Bin Ladin Group was assigned to implement the massive project of tearing down the existing Jamarat and construction of a new five-storey Jamarat facility. The demolition work was carried out early this year.
The mega project, expected to be completed within four years, is designed to accommodate nearly four million pilgrims in the Jamarat area at a time and to avoid the recurrence of stampedes that have resulted in hundreds of deaths in the past.

Railway
With the number of Hajj and Umrah visitors rising steadily year on year, the Saudi government has drawn up plans to establish a high-speed rail link from Makkah to Jeddah and Madinah and upgrade Makkah's road network. In addition, Jeddah airport – the closest international hub to Makkah – is also under expansion to raise its annual capacity to 21 million passengers within 20 years.
Tenders have been launched for the construction of the high-speed train link from Makkah to Madinah, and Makkah’s road system is being updated to ease congestion. Plans call for 300 kmph trains to run up to six times an hour between Madinah and Makkah and an estimated 50 per cent of the visitors are expected to use the service. The line will also serve Jeddah, where King Abdul Aziz International Airport is a major gateway for pilgrims visiting the kingdom.  
The Makkah-Madinah rail project is expected to be developed as a long-term design-finance-build-operate-transfer concession, with land provided at no charge by the Saudi government.
The project is expected to reduce traffic congestion on the main road linking the three cities and within the urban areas of Makkah and Madinah. Other benefits will include a cleaner environment, thanks to fewer emissions, fewer road accidents and social and economic benefits.
The route would involve construction of about 18 km of tunnels in the Jeddah region. Around 15 km of the route would be located on elevated sections, bridges or viaducts.
Preliminary studies have already been completed, and a tentative alignment puts the distance from Makkah to Madinah via Rabigh and Jeddah at 444 km. The rail would also link with the King Abdullah Economic City development in Rabigh.
Given its close proximity to the holy cities, the port at the economic city – one of its six major components – will have a dedicated Hajj terminal that can receive over 500,000 pilgrims every season. To cater to the pilgrims’ needs, there will be adjoining hotels, medical centres and other amenities.

Real Estate
The two holy cities are the focus of the real estate boom in the country, with Makkah seeing an explosion in the numbers of hotels, apartments and shopping malls rise around the Grand Mosque. Only the call to prayer halts works on the giant property projects surrounding the mosque which houses the Holy Ka’aba. Real estate developers say the holy city accounts for more than half of the total investments in the kingdom.
The real estate projects – led by Saudi developers Jiwar Real Estate Management Marketing and Development Company (an affiliate of the Saudi Bin Ladin Group), Al Oula Development Company and Jebel Omar Development Company – total around $20 billion in investments.
Among the largest of these projects is Al Oula’s $9.3 billion Al Shamiya, which is designed to accommodate up to 250,000 people on completion by 2016.  It will comprise residential towers, shopping malls and hotels. The developer has recently appointed Davis Langdon as cost manager on the project.
Other projects include the $8 billion Abraj Al Beit project which is scheduled for completion in 2008 and the $2.7 billion Jebel Omar Development.
The Abraj Al Beit includes hotels, a convention centre, restaurants and a shopping mall, as well as a 485-m high five-star hotel tower, while the Jebel Omar Development, will comprise 11 towers with hotels, a conference and exhibition centre, residential apartments and shopping mall with a total built up area of 70,000 sq m, to accommodate a total of 100,000 people.
One of the hotels in the Abraj Al Beit will be managed by Mövenpick Hotels & Resorts, which has signed a contract with the Kuwait-based owner Hajar Real Estate Company to operate a five-star hotel there. Movenpick already operates two hotels in Madinah and two in Jeddah.
Scheduled to open late 2007, the Mövenpick Hotel & Residence Hajar Tower Makkah will offer 410 comfortable rooms and suites. The complex will also house 882 fully furnished one, two, and three-bedroom residences for individual investment. The residences will be managed by Mövenpick Hotels & Resorts under a rental pool system.
A number of other international chains, including Marriott, Hilton and Ramada, are expanding their property network in the kingdom.
The Marriott chain and Ramad Worldwide group intends to open new world-class hotels in these two cities as part of their expansion plans across the Middle East
Meanwhile, a chain of Islamic-style serviced apartments are expected to be operational by mid-2007 in Jeddah, Makkah and Madinah. These serviced apartments will cater to the needs of upscale pilgrims and business executives and would be branded after the Ascott chain of Singapore. 
The two holy cities will also host a number of large malls soon, which are being developed to cater to the massive demand for retail property.  Among the largest such facilities are the SR 270 million ($72 million) Salam Mall in Makkah and the Aliat Al Madinah Mall in Madinah, which is being developed by the local United Properties Company (UPC).
The Aliat mall – which is being built by France’s Freyssinet under an estimated SR200 million ($54 million) contract – will have a built-up area of 74,600 sq m and will take about 18 months to complete. It will house the largest Savola Group supermarket in the kingdom. A team of the local Diyar Consult and France's CVZ is the consultant.
The Salam Mall is being designed by a team of the local Zuhair Fayez & Associates and BKA.
Meanwhile, the French retail giant Carrefour’s Saudi Arabian subsidiary The Saudi Hypermarkets Company will open new hypermarkets in Makkah and Madinah as part of plans to expand its network of hypermarkets in the country from three to 21 over the course of the next three years.
 
Other projects
• The Ministry of Health has finalised the designs for the construction of a huge health care complex in Makkah. It will have a modern hospital with a capacity of 500 beds, and two separate buildings for health science colleges.
• The National Engineering Services Pakistan (Nespak) has recently been awarded contracts to building 713-km-long link roads in the Makkah region, to be designed in association with a local firm Saudconsult; as well as two primary roads in Madinah having a total length of 191 km.

• Mega projects fuel construction boom
• Al Nafea looks to stronger growth
• Masa Establishment keeps the pests out

Tags

News Kuwait Scaffolding & Formwork Bahrain World Trade Center Bathrooms Contract Furnishing Makkah & Madinah Insulation Materials Handling Just Out Project Watch Dumptrucks Tenders UAE Focus Events

Gulf Construction is the undisputed leading trade journal for the building and construction industries of Saudi Arabia and the other Gulf states. The magazine provides editorial coverage on a wide range of topics which are of interest to industry professionals. In addition, regular features highlight technological developments within specific industry fields. Launched 40 years ago, the magazine has established an enviable reputation as an authoritative, respected journal with unmatched coverage of the Gulf region. Gulf Construction is essential reading for anyone with a serious interest in the region’s building and construction industry.