MODON Signs SAR1 Billion Contracts to Boost Saudi Industrial Cities

The Saudi Authority for Industrial Cities and Technology Zones (MODON) has signed nine contracts worth over SAR1 billion with the private sector to develop industrial cities across the Kingdom. The agreements, announced on August 1, 2024, via the Saudi Press Agency, are designed to enhance industrial infrastructure and attract investment, aligning with Saudi Arabia’s National Industrial Strategy and Vision 2030.

Context and Background

MODON, the government agency responsible for developing and regulating integrated industrial cities and technology zones, has been a key driver of Saudi Arabia’s industrial transformation. Since its establishment, MODON has developed over 209 million square meters of industrial land and operates 36 industrial cities, including six industrial oases. These facilities house more than 6,500 industrial enterprises, supporting the Kingdom’s goals of economic diversification and increased non-oil exports. The latest contracts underscore MODON’s commitment to creating a world-class investment environment that meets the expectations of local and international investors.

Key Details of the Contracts

The SAR1 billion contracts include infrastructure development for the initial phase of the third industrial city in Jeddah and the second industrial city in Makkah, with over 4.3 million square meters allocated for investment. In the Eastern Province, a contract was signed to develop infrastructure in the third industrial city in Dammam, allocating 2.5 million square meters of land to meet growing demand. MODON also secured deals to establish 132 kV overhead lines in Tabuk and 115 kV overhead lines in Hafar Al-Batin, each with a capacity of 100 MVA, to improve operational efficiency and ensure reliable electrical energy for industrial investors. These projects are part of MODON’s strategy to expand industrial capacity and enhance logistical capabilities across key regions.

Implications for Regional Development

The new contracts are expected to stimulate economic growth in multiple regions, including the Western Region, Eastern Province, and Northern areas. By improving infrastructure and power supply, MODON aims to attract high-quality industries, support entrepreneurship, and strengthen small and medium-sized enterprises. The allocation of millions of square meters of land for investment signals Saudi Arabia’s readiness to accommodate large-scale industrial projects, boosting job creation and local supply chains. This development also reinforces the Kingdom’s position as a competitive logistics hub, in line with the National Industrial Strategy’s goals to increase the industrial sector’s contribution to the GDP.

Vision 2030 Alignment

These contracts directly support Saudi Arabia’s Vision 2030 by advancing the Kingdom’s transformation into a leading industrial force and global logistics hub. MODON’s initiatives, including the recent launch of “Modon Oasis” in Jeddah, are part of broader efforts to diversify the economy, reduce dependence on oil, and foster a knowledge-based industrial ecosystem. By adhering to international standards and partnering with the private sector, MODON is helping to create sustainable economic opportunities for Saudi citizens and attract foreign investment. This latest milestone reinforces the Kingdom’s commitment to achieving the ambitious targets of Vision 2030, building a prosperous future for generations to come.

20 Questions

Q1. What is MODON?

A1. MODON is the Saudi Authority for Industrial Cities and Technology Zones, responsible for developing and regulating industrial cities and technology zones across the Kingdom to support industrial growth and investment.

Q2. How much are the new contracts worth?

A2. The nine contracts signed by MODON with the private sector are valued at over SAR1 billion (approximately USD 267 million), as announced in August 2024.

Q3. What is the main purpose of these contracts?

A3. The contracts aim to develop infrastructure, allocate land, and improve power supply in industrial cities, creating an attractive investment environment for local and international investors.

Q4. Which cities are directly impacted by these contracts?

A4. Key cities include Jeddah, Makkah, Dammam, Tabuk, and Hafar Al-Batin, with infrastructure projects and land allocations in these industrial centers.

Q5. How much land is being allocated for investment under these contracts?

A5. Over 4.3 million square meters in Jeddah and Makkah, and 2.5 million square meters in Dammam, are being allocated to meet investor demand.

Q6. What is the significance of the power line projects?

A6. The 132 kV lines in Tabuk and 115 kV lines in Hafar Al-Batin, each with 100 MVA capacity, will ensure reliable electricity for industrial operations, improving efficiency.

Q7. How does this align with Vision 2030?

A7. The contracts support economic diversification, industrial growth, and the development of a logistics hub, all core objectives of Saudi Arabia’s Vision 2030.

Q8. What is the National Industrial Strategy?

A8. It is a Saudi initiative to transform the Kingdom into a leading industrial force by boosting manufacturing, technology, and exports, aligned with Vision 2030.

Q9. How many industrial cities does MODON currently operate?

A9. MODON operates 36 industrial cities, including six industrial oases, across the Kingdom, housing over 6,500 industrial facilities.

Q10. What is “Modon Oasis” in Jeddah?

A10. Launched in early 2024, Modon Oasis is an initiative to attract quality industries, promote entrepreneurship, and support small and medium-sized enterprises in Jeddah.

Q11. How does this benefit local businesses?

A11. Improved infrastructure and power supply lower operational costs and attract suppliers, creating opportunities for local SMEs and entrepreneurs to thrive.

Q12. Will these contracts create jobs?

A12. Yes, by expanding industrial capacity and attracting investors, the projects are expected to generate employment in construction, manufacturing, and services sectors.

Q13. Are these contracts part of a larger plan?

A13. Yes, they are part of MODON’s ongoing strategy to develop industrial cities according to international standards and support the National Industrial Strategy.

Q14. What is the role of the private sector in these contracts?

A14. The private sector is the implementing partner, bringing expertise and investment to develop infrastructure and power projects in the industrial cities.

Q15. How does this affect foreign investors?

A15. The land allocation and improved infrastructure make Saudi Arabia more attractive to foreign investors, offering ready-to-use industrial sites and reliable utilities.

Q16. What industries are targeted by these developments?

A16. The developments target quality industries, including manufacturing, logistics, and technology, as well as entrepreneurship and SME projects.

Q17. How does this support Saudi exports?

A17. By expanding industrial facilities, MODON increases production capacity, which contributes to higher non-oil exports and economic diversification.

Q18. Has MODON completed similar projects before?

A18. Yes, MODON has developed over 209 million square meters of industrial land and built a comprehensive infrastructure system across the Kingdom.

Q19. What is the timeline for these projects?

A19. While specific completion dates were not announced, the contracts were signed in August 2024, with work expected to proceed in phases over the coming years.

Q20. Where can I find official updates on these projects?

A20. Official announcements are released by the Saudi Press Agency (SPA) and MODON’s official channels, providing transparent and timely information to the public.

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