Saudi Arabia is trying to develop alternative sectors with state finances under heavy pressure from low oil prices
The developer of one of Saudi Arabia's biggest industrial city projects says it will speed construction of infrastructure and broaden the range of industries it accommodates as part of efforts to diversify the economy beyond oil.
With state finances under heavy pressure from low oil prices, Saudi Arabia is trying to develop alternative sectors to boost exports, create jobs and provide new revenues.
King Abdullah Economic City (KAEC), a state-backed business zone on the Red Sea coast near Jeddah, is part of the effort. The zone is being developed by Emaar the Economic City (EEC) , a publicly listed firm.
Fahd Al Rasheed, group chief executive of both EEC and KAEC, said construction of infrastructure in the zone, including housing, commercial space, hotels and roads, would accelerate.
While 40 such projects have been developed since the government-backed zone was launched in 2005, 170 are planned for the next 10 years, he said in an interview.
Progress in some projects will depend on the rate at which the zone can attract new corporate tenants, as well as the strength of the Saudi economy.
But the emphasis on rapid expansion is typical of the mood among Saudi economic policy makers as a powerful new committee led by by the king's son, Prince Mohammed bin Salman, tries to restructure the economy.
"What used to take two years now takes two months. What took two weeks can take a day," Rasheed said.
The zone, which includes a port, had 120 industrial tenants at the end of last year after adding 23 in 2015. Tenants include French pharmaceutical maker Sanofi, a venture involving US battery maker Johnson Controls, and producers of building materials.
KAEC has a population of about 5,000 people. It is roughly doubling every year and is projected to hit 50,000 by 2020, with an ultimate target of 2 million around 2035.
Rasheed said KAEC is now planned to move beyond light industry into tourism.
KAEC also aims to develop a medical centre that would attract patients from abroad, and an educational industry providing university and vocational training, he said. Both sectors were identified as priorities by Saudi economic policy makers this week.
Rasheed did not say where KAEC would find investors for the new sectors, but the government has said it is willing to spend billions of dollars to jump-start growth in new areas by awarding contracts and procuring services from companies.