We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sat 22 May 2010 04:00 AM

Font Size

- Aa +

Big investment takes flight

Jubail is in the midst of a flurry of projects covering an increasing number of sectors.

Big investment takes flight
Projects in Jubail are attracting significant investment as infrastructure is built up around the city’s industrial base.

Jubail is in the midst of a flurry of projects covering an increasing number of sectors.

It is nearly a year to the day that it was announced that more than SR54 billion was to flow into Jubail Industrial City, at a grand ceremony inaugurated by Custodian of the Two Holy Mosques King Abdullah Bin Abdulaziz Al-Saud and included, among others, HH Prince Saud bin Abdullah bin Thanyyan, chairman of the Royal Commission for Jubail and Yanbu (RCJY) and Jubail Governor Abdul Mohsin Al-Otaishan.

This was on top of the SR174 billion value of active projects, and continues the "great interest to get the maximum benefit from the state resources by allocating the biggest budget for development in the history of the country," in the words of the chairman.

The Royal Commission for Jubail and Yanbu lists 30 projects scheduled to start last year in the industrial city twinned with Yanbu, and the last eight months have seen an astounding number of projects either award contracts or start. These projects are split between the familiar stories of industrial plants springing up, as well as launching big plans for its residential district, including schools, apartments and a culture centre. The next eight months show no sign of slowing.

"Jubail is a little more advanced in the number of industries compared to Yanbu," believes Abdullah Ibrahim, general manager at Riyadh-based National Contracting Company (NCC), "but they are twinned and based around petrochemicals and oil."

NCC is one company taking advantage of community-focused projects. It is into its first month building a girl's elementary school in the city, a US $21 million joint project with the construction arm of its parent company, Rezayat Co. Ibrahim is overseeing both teams. "The project was signed in the last week of April and started the first week of May at the mobilization stage. We've actually merged the teams, there's no real separation of responsibility, and there is a central source for procurement. We're trying to utilize the experience of each company for better output, sourcing manpower, getting resources - to cross reference between them."

Ibrahim adds that infrastructure related projects have been ongoing and now require expansion. "The more growth in industries, the more requirements for accommodation," he says, adding that a contract for a clinic has already been awarded.

Rezayat itself has been busy with the latest smaller projects. At the end of last year it won a contract to build a 2,261 m2  Social and Cultural Center City with its ancillary facilities.

Dammam-based Al Kifah Contracting Co. has also targeted population projects, last year winning a $37 million contract to build nine, four-storey family apartment buildings, including one mosque, located in Makkah South Sector in Jubail Industrial City. The construction includes roads and parking, grading and storm drainage, sanitary waste-water system, potable and fire water distribution system, sewage treatment and irrigation system, and electrical power system. The project total area is 33,000 m2 approximately.

Project manager Mohammed Kalim confirmed to CW that it began laying the foundations and pre-cast work last November, adding that the company would in fact build everything, including the utilities infrastructure. "All [utilities] will begin after the foundation and pre-cast stage," he says.

Another project, the building of a $4 million passport building in Jubail, also hints at an increased desire to upgrade facilities due to an expected increase in residents. Kuwait-based Al Khonaini Trading & Contracting won the contract in Q3 in 2009 and is now halfway through a construction period that still aims to meet its target of the first quarter next year.

But such deals remain on the periphery compared to the mega projects surrounding petrochemicals and oil. It has meant a greater number of countries are represented by the companies looking to procure contracts.

At the beginning of this year Daelim Industrial Company, a Taiwanese firm, won the contract to build a low-density polyethelene plant in Jubail. S I Kim, general manager for the Damman office, said the construction of the plant in was ‘much higher' than the $300 million initially reported, though he would not be drawn for the exact figure, which could be more than double.

The company is looking at this project exclusively in this specific region of KSA. Kim adds that big, general projects in Jubail had been a long time in the planning and had been delayed, but now they are coming to fruition, with many more to come.

The delays he says to CW, were "not connected to the current market [downturn]. We have a special interest in oil and gas and petrochemicals and we have been preparing for several projects."

One unforgettable announcement from last year was for the new $1.1 billion petrochemical plant, tendered by Saudi International Petrochemical Company (Sipchem) with Hanwha Chemical Corporation and Exxon Mobil Corporation winning the main contract and technical consultants contracts respectively.

Hanwha Chemical Corporation and Sipchem signed a joint venture agreement, with 75% owned by the latter. The facilities will produce 200,000 mt/year of ethylene vinyl acetate and 125,000-mt/year of polyvinyl products, and the plant is scheduled for the end of 2013.

No such delays either for the 380/115 kV 8AB Substation, an $80 million project won by Saudi Services for Electro Mechanic Works Co. Ltd. (SSEM) ten months ago. The scope of work of this project includes engineering, procurement and construction (EPC) of 380/115-kV Power Substation at the community area in Jubail Industrial City.

Some projects are already out for tender, including at least one other additional large petrochemical plant, according to other sources.

Arabian Business: why we're going behind a paywall

Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.