Saudi Arabia plans to set up at least 6 more large industrial parks and hand out contracts worth up to USD 1.6 billion to equip them as part of efforts to diversify the economy away from oil.
The top OPEC exporter is trying to lower dependence on oil and build up new industries as the kingdom has to speed up job creation for a rapidly rising young population.
Saudi Arabia is rolling out investments worth USD 400 billion until 2013 to upgrade infrastructure, build roads, power plants, utilities or universities. To attract investments, the government is creating so called industrial cities across the Gulf Arab states which offer cheap leases and other subsidised government services.
Mr Tawfig Fozan al Rabiah head of the Saudi Industrial Property Authority which develops the industrial zones said that the total area of parks would rise to 71 million square metres in a first step and later to more than 100 million square metres up from 42 million. The government wants to offer tenders worth USD 1.3 billion to USD 1.6 billion in the next 5 years to equip these cities with services such as housing compounds or utilities.
He said that contracts would be signed on a build operate transfer basis under which an investor typically runs a project for the government over a limited period of time.
Mr Al Rabiah said hat "We have started development of 6 new cities and possibly expand some old cities. The total area that we are adding now is 60% to what we have developed over the past 40 years."
He said that there had been a fall in investment offers last year as a result of the global economic slowdown but interest was now picking up again. He added that it was slower than but not as much as we had expected.