These industrial cities exist only for one reason – oil. As a result, demand for heavy kit is booming.
Yanbu
Although less well known than Mecca, Jeddah or Damman, it is highly likely for years to come that Yanbu will be a major area of construction.
The town’s rise to prominence came in 1975 when the government designated what was then just a small settlement to be one of the new industrial centres – the other being Jubailon the east coast. Since, Yanbu has grown to be KSA’s ‘second’ port after Jeddah as an important petroleum shipping terminal. The city also acts as a port for Medina.
As a result, the city of 250,000 provides some strong opportunities for construction projects relating to the petrochemical industry and its related infrastructure – providing ample opportunity for machinery suppliers, as well as those who maintain and operate heavy equipment and trucks.
In summer 2009, King Abdullah opened several projects in the industrial city, including the US $5.3bn Yanbu National Petrochemicals Company, road and bridge projects worth US $35m and US $533m of other projects all based in Yanbu ‘2’.
He also opened a SABIC development as well as an US $800m power station expansion. Meanwhile a US $3.7bn desalination plant has been signed off and an expansion plan for the Prince Abdul Moshen Bin Abdul Aziz airport has been launched, providing huge scope for heavy machine operators with a base in the country.
Confidence in the future of Yanbu remains very high. “Jubail and Yanbu are very successful stories. When they started in the 1980s everybody was saying ‘these people are crazy, don’t bother doing it’– everybody was grumbling about its failure and now everybody is talking about its success. It proved to be the right decision at the right time,” says Saudi Arabian deputy minister for town planning, Dr Abdulrahmen Al Shaikh.
“I know there are some who have their doubts about the success of the economic cities, but this is the nature of people. I believe they will prevail, because the Kingdom’s economy and resourses are sound and if it is the will of the government to support it, then it will go on.”
Despite the economic slowdown, Yanbu appears to be getting back on its feet. At the end of July 2009 Saudi Aramco and Conoco Philips reopened the tender to construct a 400,000 bpd refinery project in Yanbu, worth an estiomated US $12bn. Meanwhile, the current tenders list for the city indicates strong growth in the healthcare sector, with several health clinics and medical staff accommodation being planned.
Jubail
Much like Yanbu, but on the opposite coast, Jubail was designated as an industrial city in 1975 and is now the largest industrial complex of its kind in the world.
Having been described as far back as 1983 as ‘the largest construction and engineering project ever attempted’, the city shows no sign of slowing down. The city is now expanding to create a Jubail Two, an 84km expansion project located some 8km to the west of the established Jubail One.
Recent months have seen a flurry of big value contracts awarded, with little sign of a slowdown. In July, Saudi Arabia’s Royal Commission for Jubail and Yanbu awarded five construction contracts for Jubail Industrial City worth a total of US $257.5 million (SR964.3 million).
The largest contract, worth $93.5 million, was awarded to Azmeel Contracting and Construction Corporation in association with Saudi Tumpane Company for phase one of Jubail’s Community site development. The contract will run for three and a half years.
Meanwhile, Saudi Aramco handed out 13 EPC contracts, worth a total of $9.6 billion, to undertake work on its Jubail Export Refinery mega project.
Manufacturing and infrastructure remain high on the agenda in the city. In anticipation of increased growth, Suez Energy International and Acwa Power Projects are constructing a $3.4 billion independent water and power plant for the Power and Water Utility Company for Jubail and Yanbu.
The power plant will comprise of four blocks and will be based on combined cycle generation gas turbines.
Meanwhile, the desalination plant will comprise of 27 units that will use multiple effect distillation technology (MED). Jubail IWPP will produce 2,745MW of power and 800,000m3 per day of desalinated water to Jubail Industrial City and the Eastern Province of Saudi Arabia. Construction began in 2007 and is expected to finish about now.
However, the city isn’t ‘all business’. September saw Rezayat pick up the construction contract for the $7 million social and cultural centre. The 2,261m2 building is due in Q1 2011.
Jubail itself has proved to be a valuable training ground for the economic city developments taking place across Saudi Arabia.