Identifier
Created
Classification
Origin
08JEDDAH537
2008-12-31 09:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Jeddah
Cable title:  

BIG PLANS FOR DEVELOPMENT OF MAKKAH REGION:

Tags:  ECON EFIN EINV ELTN PGOV SA 
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VZCZCXRO7747
RR RUEHBC RUEHDA RUEHDE RUEHDIR RUEHGI RUEHJS RUEHKUK RUEHLH RUEHPW
RUEHROV
DE RUEHJI #0537/01 3660918
ZNR UUUUU ZZH
R 310918Z DEC 08
FM AMCONSUL JEDDAH
TO RUEHRH/AMEMBASSY RIYADH 8179
RUEHC/SECSTATE WASHDC 1086
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCNISL/ISLAMIC COLLECTIVE
UNCLAS SECTION 01 OF 02 JEDDAH 000537 

SENSITIVE
SIPDIS

RIYADH PASS TO DHAHRAN

E.O. 12958: N/A
TAGS: ECON EFIN EINV ELTN PGOV SA
SUBJECT: BIG PLANS FOR DEVELOPMENT OF MAKKAH REGION:
ECONOMIC SLOWDOWN MAY DELAY PROGRESS

REF: A. RIYADH 1850

B. JEDDAH 414

UNCLAS SECTION 01 OF 02 JEDDAH 000537

SENSITIVE
SIPDIS

RIYADH PASS TO DHAHRAN

E.O. 12958: N/A
TAGS: ECON EFIN EINV ELTN PGOV SA
SUBJECT: BIG PLANS FOR DEVELOPMENT OF MAKKAH REGION:
ECONOMIC SLOWDOWN MAY DELAY PROGRESS

REF: A. RIYADH 1850

B. JEDDAH 414


1. (SBU) Summary: Consul General and Pol/EconOff recently
toured the "Future of Makkah" Exposition, a temporary
exhibition in Jeddah showcasing gleaming urban development
and infrastructure projects in the Makkah region of Saudi
Arabia and which will close this week amid questions as to
the likelihood and viability of some of these plans in light
of the worsening global economic climate. While the
just-released 2009 budget for the KSA promises large-scale
government spending in infrastructure projects, privately
financed construction is likely to be delayed, extended, or
even cancelled. The rosy outlook evident when the expo was
launched in September is now more restrained. End summary.


2. (SBU) The Makkah region includes the holy cities of Makkah
and Medinah, the major port city of Jeddah, the mountain
resort of Taif, and will one day include the King Abullah
Economic City (KAEC) where construction is nearing
completionon the first usable buildings on a site that is
intended, according to the master plan, to one day house a
population approaching 400,000. (100,000 is viewed by
developers as the approximate "critical mass" required to
make the KAEC project take off and become viable.) After
decades of haphazard urban planning combined with rapid
population growth, the existing cities are under pressure to
modernize transportation facilities, improve access and
increase accommodations and housing stock. The annual
pilgrimage to Makkah highlights the current deficiencies in
Makkah, Medinah, and Jeddah, all of which are stressed by the
annual influx of approximately 1.5 million hajjis over the
course of a 3 month period. In addition, Jeddah's upwardly
mobile population has begun to abandon the traffic-burdened
city center as it moves northward, leaving behind the poor
and working-class expatriate population in the ever-more
congested and blighted south Jeddah area. In response, the
government has taken the initiative to launch several
development and redevelopment projects.

HIGH SPEED RAIL



3. (U) In May 2006, former Governor of Makkah, Prince
Abdulmajeed Bin Abdulaziz, announced plans to build a high
speed railroad, the Haramain High Speed Rail (HHR),
connecting Jeddah to Makkah and Medinah. The new line will
ease Hajj and Umra travel for visitors and also make transit
from nearby Makkah to the new Jeddah airport faster for
residents of Makkah. The rail project is widely expected to
move forward as planned without meaningful delays engendered
by economic downturn. The line will also feature a spur to
the KAEC, which sits on the coast 100 kilometers north of
Jeddah. Coupled with the rail line, a new terminal is
planned for King Abdulaziz International Airport in Jeddah.
The current airport is seriously outdated and long overdue
for expansion. The plan is to construct a completely new
structure leaving the current facility operational during
construction. Bidding for the project is set for March 2009
with its first phase scheduled for 2012 and the entire
project running through 2035.

MAKKAH "MAKE-OVER"


4. (SBU) The center of Makkah will undergo the most radical
transformation with a complete urban redesign to move all
Hajj traffic to public transportation or pedestrian
corridors. The plan, known as Jebel Omar, is not only
ambitious, with its 39 residential and hotel towers and 2400
commercial outlets, but it is also controversial since large
areas of the existing city will need to be cleared to
accommodate the main construction corridor. Negotiations are
in progress with landowners, and building is not expected to
get underway for four to five years. An estimated 90,000 to
100,000 people will need to move if the proposed plan goes
forward. In the middle of the city, a new King Abdullah
Mosque accommodating 45,000 people is slated to be built.
Substantial clearing of the area immediately contiguous to
the Ka'abah, the holy center of the pilgrimage, has already
taken place with more to come. Many of the structures
removed from the area were of historic or architectural
importance and, according to some in Jeddah, nothing was done
to preserve them or even to document these sites prior to
their destruction. Some of our contacts have severely
criticized these actions, blaming Makkah landowners, who
stand to profit from the redevelopment, for acting without
concern for the religious history and sanctity of the site.
Our contacts, emphasizing Saudi Arabia's commitment to

JEDDAH 00000537 002 OF 002


accommodating future Hajj pilgrims, believe it very likely
that the Jebel Omar project -- come what may on the global
economic front -- will be realized.

JEDDAH PORT REHAB


5. (SBU) There are several plans which aim at untangling and
renewing the congested port area in Jeddah. In the very near
term, land fill and deep water dredging should increase port
capacity by 1.5 million containers per year and also permit
unloading of deep tankers. This added capacity is critical
since ships are sometimes forced to wait off shore for
several days before there is space to enter the port and
unload. The port expansion will also create additional
corniche or water-side areas where housing, recreation,
hotels, and shopping are planned. Lying just north of the
port, a natural coral ring will be used as a foundation for a
giant tank -- camouflaged by a doughnut-shaped island
recreational area -- in which sea water will be held higher
than the surrounding sea level. An underground pipe will
lead from the tank to a nearby inland estuary and the water
will be periodically released from the tank to flush out the
estuary. The entire area surrounding the estuary is also
slated for tear-down and rebuilding with new housing,
offices, and city services. Some of the revenue generated by
the business in the port/estuary area is committed for use in
rehabilitating the historic Old Jeddah area which abuts the
port district. Much of Old Jeddah is on the verge of
collapse and in need of substantial resources for
preservation. According to Sami Nawar, General Director of
Tourism and Culture at the Ministry of Municipal and Rural
Affairs, the project is assured now that a contract has been
executed between the city and the partners in the project.
However, local residents who will likely be displaced have
initiated protests which may stretch out the two-year
planning phase by another two or more years.

KINGDOM TOWER -- TALLEST BUILDING IN THE WORLD!


6. (SBU) The most uncertain of the announced projects is the
landmark Kingdom Tower, a private project planned by Saudi
multi-billionaire Prince Alwaleed Bin Talal. If built, the
forty billion dollar tower would be the tallest building in
the world, standing approximately one kilometer high, and
towering above what is currently undeveloped flat desert.
The area, which lies to the north of Jeddah's tonier
residential districts, would be transformed into a second
urban center. There is much speculation as to whether the
project -- with or without the tower -- will be realized.
Many contacts say that Prince Alwaleed announces plans for
this land from time to time in order to increase land values
then cancels the plans down the road. However, if the
project goes forward, Jeddah would have a new, modern, clean,
multi-use center for work and play with waterways, public
transit, resort beaches and additional residential space.
The overall area of seven million square meters would
eventually accommodate two million people. Sami Nawar
estimates that there is a 60-70 percent likelihood the
project will go forward. Others are less optimistic.


7. (SBU) Comment: The current economic slowdown will almost
certainly delay or deal a death blow to some of the privately
financed projects planned for the region. One such project,
the Dubai Towers, a group of luxury high-rise apartment
buildings on the Jeddah Corniche, has already run into
financing trouble, while a similar project called "The
Headquarters" is given a high likelihood of moving forward as
planned. Conversely, government-funded projects,
particularly infrastructure projects such as the Haramain
High Speed Rail and the Jeddah Harbor project are now more
likely to move ahead given the KSA's emphasis in the 2009
budget on increasing capital expenditures in order to
mitigate the effects of the global financial crisis.
Timetables may change, but Saudi urban development projects
will remain major Saudi government priorities because of its
commitment to meet pressing housing and transportation needs
for residents and visitors to the holy cities. End comment.
QUINN