November 6 2008 - Lloyd's List

A NEW industrial port containing a shipbuilding and repair centre has been approved for Saudi Arabia’s Jazan Economic City, after investment was secured for the $30bn project, writes Dominic Ellis in Dubai.

MMC Ports, Saudi Binladin Group and JEC have signed a port development agreement to develop the JEC port, which is intended as a catalyst for the city’s commercial activities.

The port, which seeks to capitalise on the busy Red Sea and Suez Canal routes, will cost $1.4bn, with $900m set aside for shipbuilding and repair.

Other components include a $12bn oil refinery, $2.5bn power plant, $3.6bn aluminium smelter with 1m tonne capacity, $2bn steel cluster and range of secondary steel and automotive industries.

By the end of the year, JEC will also award contracts for earthworks and the construction of major roads as well as an integrated housing complex.

The governor of the Saudi Arabian General Investment Authority, Amr Al-Dabbagh, said he was pleased that JEC had attracted the necessary funding two years after its launch.

“It is testimony to the fact that it is very attractive for heavy industries to invest here,” he said.

MMC International chief executive Feizal Ali said the investments helped expand its core businesses of logistics and utilities globally, and the port, power and aluminium smelter projects would provide it with long-term recurring income.

“The risk and reward profile of these projects meets our benchmarks for such investments,” he said.

“In light of the current financial climate, Saudi Arabia is much better placed than other economies in terms of liquidity and we are of the view that good projects with sound economic basis will be able to attract adequate funding.”

MMC’s other key port-related businesses include the Port of Tanjung Pelepas and Johor Port in Malaysia.