A New City in the Saudi Desert

Amr al-Dabbagh has no doubt that if he builds it, they will come. The governor of the Saudi Arabian General Investment Authority (SAGIA) is one of the brains behind King Abdullah Economic City, a $27 billion development rising out of the desert 100 km north of Jeddah, and he can already envision the arrival of its first residents. “It won’t be long before it starts taking shape,” he says, of the city that, when completed 20 years from now, will be roughly the size of Washington, D.C., with a population of more than 1.5 million.

There’s a palpable sense of urgency at the construction site, where a line of high-rise buildings — offices and residences — is taking form along the aquamarine waters of the Red Sea. Dozens of businesses have signed up to set up shop in KAEC (pronounced “cake”) and the first 1,500 housing units sold out in a matter of days. The first business tenants will move in early in 2009, the first residents soon thereafter. The first school is meant to open by the end of next year, which will allow families to move in.

If all goes according to plan, in a couple of years the trickle will turn into a flood. Not since Brasilia and Chandigarh in the 1950s and ’60s has any country set out to build a city from scratch on such a scale. And Al-Dabbagh is planning to build five of them simultaneously, with KAEC as the flagship project.

To its critics, the plan smacks of oil-fueled excess — of a piece with the mad dash across the Arabian peninsula, to build the tallest, biggest glitziest structures money can buy. Their coffers bulging with surpluses, many Persian Gulf states are turning their desert into one giant construction site. There’s the City of Silk project in Kuwait, Dubailand in Dubai, and any number of ports, airports, universities and giant residential and industrial complexes coming up in Qatar, Abu Dhabi, Bahrain and elsewhere. KAEC “is not a vanity project, but there is definitely a statement being made,” says a Riyadh businessman who asked not to be identified for fear of offending King Abdullah, after whom he new city is named. “It is the Saudis saying to the rest of the Arabs, ‘We can build bigger than the rest of you.’ ”

Al-Dabbagh and his backers insist they’re not trying to out-build Dubai, or anybody else, and that the new cities are meant to solve pressing economic and demographic problems: Saudi Arabia has a massive housing scarcity and a huge population of young people that will come of age in the next five years. Fahd al-Rasheed, CEO of the KAEC project, points out that Saudi Arabia needs to build 6 million residential units in the next 12 years; and that’s compared to the 5 million units it has built over the past six decades. In addition to providing housing, KAEC and the other new cities are also meant to create millions of jobs.

But why not build the new homes and create the new jobs in Riyadh, Jeddah and Damman? Saudi officials say these cities have already grown too fast, and in too haphazard a fashion — the population of the capital alone has doubled in a decade, to 4 million. Building new cities will prevent uncontrolled urban sprawl and congestion. “We just need these new cities,” says Khaled al-Faisal, governor of the Mecca region. “There is no other way to do it.”

Al-Faisal points out that Saudi Arabia has done this before: The port towns of Jubail and Yanbu were built from scratch in the 1980s and ’90s. But those were essentially designed to create industrial infrastructure, and little attention was given to the quality of life of those who had to move there. As a result, both cities have come to be seen as somewhat dreary outposts, better suited for workers living in dormitories than families.

KAEC, on the other hand, is being touted for its lifestyle options as well as a business opportunities. Wealthier residents will have waterside villas, complete with berths for large yachts. Middle-income residents will have high-rise apartments. Other family-friendly features being promised are hospitals, a university and a giant sports stadium. A full-scale port will handle not only freight but also some 300,000 pilgrims arriving by sea for the annual Hajj — a high-speed railway link between Mecca and Medina will stop at KAEC.

But this is not meant to be a tourist destination. Each of the new cities will specialize in specific industrial sectors, where foreign and Saudi businesses are being encouraged to build factories and offices. KAEC’s speciality will be plastics — in the masterplan, a large swath of the city is designated “Plastics Valley”. There will also be a $6 billion aluminum complex and a container depot. The UAE aluminum maker Dubal has already signed up as one of the “anchor” industries. Chocolate maker Mars will be another. The city’s planners hope KAEC will eventually create 40,000 industrial jobs, and many times that number in service jobs.

At the construction site, work has slowed for the holy fasting month of Ramadan — empty stomachs and temperatures of 115 degrees take their toll on productivity. But Joe Kilar, the project COO, says he’ll soon make up for any time lost. “Come back in October, when Ramadan’s over,” he says, “and this place will be turbo-charged.”