JEDDAH MAYOR PRESENTS DEVELOPMENT PLANS; CONSUL

UNCLAS SECTION 01 OF 03 JEDDAH 000437

SIPDIS

SIPDIS

RIYADH, PLEASE PASS TO DHAHRAN; DEPARTMENT FOR NEA/ARP;
PARIS FOR ZEYA; LONDON FOR TSOU

E.O. 12958: N/A
TAGS: ECON KISL PREL SA
SUBJECT: JEDDAH MAYOR PRESENTS DEVELOPMENT PLANS; CONSUL
GENERAL MAKES BID FOR MUNICIPAL ASSISTANCE IN SEARCH FOR
NEW CONSULATE SITE

REF: JEDDAH 269


1. SUMMARY: On June 19, the Consul General, Pol/Econ Chief,
Commercial Officer , PolOff and EconOff attended the June
General Meeting of the American Businessmen of Jeddah (ABJ).
The keynote speaker was Mayor of Jeddah, Adel Fakeih who
described the city's ambitious new redevelopment plan to
transform Jeddah into a modern, efficient and prosperous
"world-class" city. After the meeting, the CG spoke with the
mayor about the mission's arduous search for a site to build
a new consulate compound. The CG enlisted the mayor's
support for solving a title dispute involving one potential
site. END SUMMARY.

JEDDAH: WORLD-CLASS CITY OF THE FUTURE


2. The CG and a number of Consulate staff attended the June
19 meeting of the ABJ. Due to the oppressive heat of summer
which drives most well-to-do Jeddawis from the country, this
was the final meeting of the ABJ year. As is traditional at
this meeting, a high-profile speaker appeared, in this case
Jeddah's Mayor Adel M. Fakieh. In his speech, "The Jeddah
Plan and Future Investment Opportunities," Mayor Fakeih
offered a guided tour of the grandiose Municipal Plan to
redevelop Jeddah and create a "world-class" city. The plan
was developed with the assistance of international
consultants and advisors. The description of the Jeddah
Plan, illustrated by dramatic renderings of a cityscape that
could rival Dubai or Singapore, placed a heavy emphasis on
infrastructure, planned construction, and economic and
technological development.

INFRASTRUCTURE IMPROVEMENTS KEY TO FUTURE PLANS


3. Anyone who has endured the increasingly heavy and
disorderly traffic plaguing Jeddah can only applaud the
municipal plan's comprehensive, integrated transportation
system. The plan envisions drastic revision to traffic
patterns by rerouting a number of major traffic arteries,
development of a modern public transit system, and
interconnection with a regional transportation network,
including the proposed Mecca-Medina Rail link and Landbridge
which would connect Jeddah with the proposed national rail
network. Note: Considering the frequent, unanswered
complaints about the atrocious state of many of Jeddah's
roads, one must wish them quick success, but could be excused
for harboring some skepticism. End Note.


4. One questioner in the audience raised the issue of water
and sanitation in Jeddah which have been reported on before
(reftel). The Mayor assured the audience that this problem
was being addressed in the current budget in cooperation with
the national authorities, and would be solved at the
conclusion of the current five-year plan. He noted that
thanks to the acceleration of capital investment programs
permitted by increased oil revenues, the entire five-year
plan to develop a modern, safe water and sanitation system
had been completely funded to the projected total of SR 7
billion. He also announced that all contracts associated
with the water and sanitation plan would be awarded by the
end of this year.


5. A substantial portion of the real estate in Jeddah is
owned by the municipality. Under the proposed plan,
substantial development will be concentrated in north Jeddah
in the vicinity of the now developing Obhur Creek region, the
area surrounding the old Jeddah airport, and several areas
located between the Old City and the current location of the
U.S. Consulate General. Significant portions of the
Corniche, particularly near the Lagoon and the Islamic
Seaport, also are slated for redevelopment.

ZONING WILL ENSURE ECONOMIC VIABILITY AND CONSERVATION


6. The city plans to use zoning regulations to ensure that
economic activity in expensive commercial sections will
"increase the value to the city," by transferring economic
benefit to areas where development will be restricted, such
as the Balad, the Old City of Jeddah. As described by the
mayor, the city is exploring ideas such as trading height
credits, whereby a developer desiring to build a high-rise

JEDDAH 00000437 002 OF 003


building on the exclusive Corniche would have to buy the
height rights from an area such as the Old City, thus
maintaining the economic viability of the historic small
buildings in the Old City in the middle of a modern
commercial metropolis.

PUBLIC PRIVATE PARTNERSHIPS AND TRANSPARENCY


7. The mayor explained that much of the development will be
carried out by public-private partnerships, which will be
open to international investors and participants. During the
speech, he announced that within the next two or three months
the Jeddah Development Commission would be established to
enter into a "dialogue with businesses interested" in
participating in the project. These partnerships are also
viewed as a method of circumscribing what he candidly
characterized as an ineffectual, unresponsive and corrupt
bureaucracy. COMMENT: While methods to overcome
bureaucratic obstacles are to be welcomed, the actual
operation of these organizations should be carefully
scrutinized in a land long know for "wasta" (the exercise of
influence, kickbacks, sweetheart deals, and silent partners)
to ensure that the operations are genuinely transparent. END
COMMENT.

FARTHER IN THE FUTURE: TRANSFORMATION OF GOVERNMENT AND
MEGAPROJECTS


8. In the more distant future the Mayor also envisions the
transformation of the physical city being accompanied by a
transformation of the city's operations. He hopes to
incorporate technology into municipal activities and
inaugurate e-government. He also referred to the possibility
of additional projects in the vicinity of Jeddah. He
described the recently inaugurated expansion plans for King
AbdulAziz International Airport and hinted at a "megaproject"
north of Jeddah. Since King Abdullah Economic City, planned
for Rabigh, has been publicized extensively during the past
year, it is presumed that this statement refers to some as
yet unannounced project that the ambitious Saudi government
is considering as an investment for their ever growing
petroleum revenues.

BEST LAID PLANS: WHAT WILL THE PUBLIC SAY?


9. Substantial time and money have been expended in
developing these elaborate plans. The opinions of the
powerful business community and the appropriate government
entities have been combined with the assistance of
international consultants and planners. What is uncertain is
how the public will accept this plan which will inevitably
displace thousands of them from their homes and businesses in
the core areas of the city in order to permit redevelopment.
In response to a query from Pol-Econ Chief after the meeting,
Mayor Fakeih said that the plan would soon be open to public
comment. One must question how much modification could occur
in a plan that has already reached such an advanced state.


10. COMMENT: Formulation of the Jeddah Plan exposes the
distance Saudi Arabia remains from successfully incorporating
democratic principles in public policy-making. The appointed
mayor, the municipal bureaucrats, the national government,
and the influential business interests have shaped this
project, with the assistance of international experts. Only
in the future, will the general population, who will have to
endure its consequences, have an opportunity to offer their
opinions. END COMMENT.

THEN THERE IS THE COMPETITION


11. One wonders how the promotion of an already thriving
Jeddah into a "world-class" commercial center will fare as
the proposed King Abdullah Economic City is developed in
Rabigh north of Jeddah and future developments announced for
Yanbu are also carried out. Can the central west coast of
Saudi Arabia support three major commercial centers? Have
the many development projects announced for these areas in
the past year been coordinated?

CG BRIEFS MAYOR ON NEW CONSULATE GENERAL PLANS


JEDDAH 00000437 003 OF 003



12. In a conversation after the Breakfast, the Consul
General briefed the Mayor on the ongoing search for a
suitable location for construction of a new Consulate
General. The CG described the three sites presently under
consideration; two in north central Jeddah and one north of
Obhur Creek on the northern outskirts of the city. In
discussing a title dispute between the municipality and the
owners of one parcel under consideration, the CG reminded the
mayor of his earlier pledge to do whatever he can to
facilitate the Mission's search for a proper site for a new
consulate. The CG also informed the mayor of Ambassador
Oberwetter's personal concern that this matter be settled
expeditiously.

MAYOR'S ROAD TO OFFICE


13. (SBU) Fakeih, dressed in traditional Arabic attire,
used excellent English peppered with occasional Arabic
phrases to deliver a polished PowerPoint presentation of his
plan to revitalize Jeddah. He noted that he hopes to use
technology to fight corruption and to improve the city's
service capabilities. During his speech, he also credited
his wife, Maha Fitaihi (a prominent businesswoman and social
figure in Jeddah who was seated on the CG's right hand) with
encouraging him to take the mayorship as a way to give back
to his community. Fakeih said he initially had "shied away"
from government posts but was convinced to become Mayor by
his wife's continued support and after being personally
tapped by Minister of Municipal and Rural Affairs Prince
Mitib bin Abd al-Aziz Al Saud. The Mayor also said that
while he takes satisfaction in serving Jeddah and not just
building business, in the end he still sees himself as a
businessman and not a bureaucrat.
BIOGRAPHICAL NOTE


14. Fakeih has a bachelor's degree in industrial engineering
from King Abdulaziz University in Jeddah. He has been a
prominent member of the Jeddah business community for many
years. He was chairman of the Savola group, a Jeddah
industrial conglomerate specializing in supermarkets and food
products, from 1990 to 2003 and then was chairman of the
Jeddah Chamber of Commerce and Industry (JCCI) during
2003-2005. He has been active in many civic organizations in
Western Saudi Arabia, including serving on the executive
boards for the Mecca Area Board, the Supreme Council for
Tourism, the Royal Committee for Jubail and Yanbu, the MARAE
industrial group, and a prominent development fund. He also
has been chairman of the Saudi Arabian Glass Company. Fakeih
has 5 children.
Gfoeller