COUNTRY | Saudi Arabia
REGION | Asia
SECTOR | all sectors, energy, transport, information and communications, water and waste
SUB-SECTORS | energy distribution, roads, bridges and tunnels, other transport, buildings and structures, urban infrastructure, fixed ICT, wireless ICT, other ICT, sewerage, water supply
QII Principles | Principle 1 Sustainable Growth & Development, Principle 2 Economic Efficiency, Principle 3 Environmental Considerations, Principle 5 Social Considerations, Principle 6 Infrastructure Governance
QII Sub-Principles | 1: Wider economic benefits, 2: Operation and maintenance, 3: Environmental Impact Assessment, 5: Job creation, 5: Occupational health and safety, 6: Growth & development strategies
Overview
Cost: 1.9 B SAR
Size: 16.9 Km2
Brownfield or greenfield: Greenfield
Context: The program was initiated to develop industrial city in Sudair to support local investors and to attract international investment and to advance the national industry.
Timeline
Key dates including procurement, construction, operations
Program start date: 06-Feb-10
Program finish date: 31-Jan-22
Relevance to QII
Principle 1: Sustainable Growth & Development, sub-principle: Wider economic benefits
Sudair tenants generate additional 0.02% of GDP along the value chain.
Sudair project aims at maximizing the positive economic, environmental, social, and development impact of the city infrastructure by successfully encouraging agglomeration effects and stimulating economic diversification. Tenants’ activities spread over 16 different ISIC manufacturing divisions.
Principle 2: Economic Efficiency, sub-principle: Operation and maintenance
Constructed factories enhanced sustainable growth & development. They can be conceptualized as infrastructure for production and are built affordable over the life cycle to produce economic benefits to the industry.
Principle 3: Environmental Considerations, sub-principle: Environmental Impact Assessment
MODON is committed to environmental responsibility and have deployed the Environmental Management System (MEMS) in Sudair. MODON Environmental Management System included 13 programs, of which six were implemented by MODON directly, while MODON oversaw the contractor performance in the implementation of seven other programs. Currently, MODON is implementing the initiative no. 1-18-052-0350 to preserve water resources and their sustainability. The development of the industrial city helped to study, evaluate and control the environmental impact.
Principle 5: Social Considerations, sub-principle: Job-creation
The industrial city has positive impact on the community by increasing the employment rates and create new jobs for the local citizens. Sudair tenants created by the end of 2019 over 3250 jobs, 103 for women. Sudair is located near small villages and towns and provide jobs from undeveloped areas.
Principle 5: Social Considerations, sub-principle Occupational health and safety
To raise the standard of safety operations in the industrial cities, MODON established a Safety Management System based on the latest international safety management practices (ISO 45001). MODON established an evacuation plan mechanism as part of its emergency plans and carried out 10 evacuation drills during 2018 at the main buildings of the industrial cities, including the headquarters of the Sudair Industrial City.
Principle 6: Infrastructure Governance
All the sub-principles of strengthening infrastructure governance (openness and transparency of procurement, putting in place anti-corruption measures, transparency, and rigorous assessments) are automatically put in place through Saudi legislation in force.
Benefits
Sudair is one of the most prominent economic and social developments in the central region of the Kingdom of Saudi Arabia. Sudair development includes industrial, commercial, residential and leisure areas on approximately 64 km², 16 km² being currently developed.
Sudair Industrial City was established in 2010 and hosts 302 factories including producing, existing and under construction factories.
Sudair tenants generate 0.05% of the KSA GDP (0.11% of the non-oil private GDP). By 2030 it is expected that the number of tenants in Sudair will reach 400.
Sudair is a hub for entrepreneurs. Currently, 98% of Sudair tenants are SMEs, with 94% having between 6-49 full time employees and revenue between SAR 3MM and SAR 40 MM. The structure on activities follows the regional specialisation and skills structure.
The development strategy followed UNIDO International Guidelines for Industrial Parks and attracted anchor investors in several manufacturing activities (ex: CocaCola, Sudair Pharma).
Sudair is also achieving its objective to alleviate growing congestion in Riyadh City, reduce migration to the Capital and increase employment in the surrounding underdeveloped areas, therefore having a substantial contribution to KSA regional development goals. Sudair features Al-Himmah Residential Complex with 1295 rooms and capacity of 6000 workers.
In terms of transport connectivity, the industrial and business city of Sudair became an important node located in the northern part of the Central Region. It was initially strategically located, at approx. 150km north of Riyadh city and approx 160km southeast of Qassim. Currently Sudair is connected to all parts of the Kingdom of Saudi Arabia by the surrounding highway 65, southwards to the Riyadh capital region and northwards to Buraydah and the northern provinces. Highway 50 connects westwards to Makkah / Jeddah. Dammam can be reached using highway 40 in an easterly direction (over Riyadh). The north-south railway line connects Gurayat in the north and Ras al Khair in the east with Riyadh in the south and runs straight through the heart of Sudair. Sudair is close to the Majma’ah Railway station (60 km) as well as with the King Khalid International Airport in Riyadh (140 km).
In the Saudi National Transport Strategy Sudair is considered one of the priority areas and a platform critical to improve network integration through proximity to distribution centres and excellent connections. Mawani plans to build a dry-port in Sudair, which will have an important impact on KSA in Logistic Performance Index ranking and will support further development of the city.
Sudair is connected digitally through high-speed internet. In terms of other utilities, MODON built the electricity substation and a new sewage disposal plant and the pumping of drinking water through the networks were completed.
Lessons learned
- Carefully considering the location to balance organic development with regional growth objectives was one of the main success keys for Sudair.
- Consistent focus on connecting the industry to the Ryiadh and Majmaah Universities could have generated higher productivity and agglomeration effects and shape the ecosystem towards a more innovation.
- Promotion of MODON most successful products – the ready-made factories increases the attractiveness of MODON industrial cities.
- When the cities are not adjacent to urban centers, female and Saudi employment is dependent on existence of schools and day care facilities and/or transportation from and to the closest city.
- Key success factors were accurate feasibility study, environmental impact assessment and engineering.
Metrics
- Earned value management system is used to control program time and cost.
- Female jobs measured and reported annually
- The city environmental performance is monitored through MEMS.
- Contribution to economy and strategic objectives are monitored quarterly by MODON.
- Rate of compliance with The standard of safety operations are reported through MODON safety management System.
Name of Institution
Saudi Authority for Industrial Cities and Technology Zones (MODON)