Riyadh Industrial Gate City close to infra tenderby Ben Roberts on Nov 17, 2011
Mawten Real Estate is “close” to issuing a tender for the infrastructure work on the SAR 1.1bn Industrial Gate City project in Riyadh, despite considering a number of options for how the tender will be structured.
Raeyd Al Dakheel, CEO of Riyadh-based Mawten, told CW yesterday that the project is close to completing the “cut and fill” stage, which includes levelling the land, to prepare the 650ha site before major infrastructure work can start.
The project, the flagship for Mawten Real Estate launched last December, will see the development of a series of plots for industrial usage, warehousing, commercial centres, and logistics as demand remains high for industrial production space in the capital.It isd situated near the 2nd Industrial City.
“The IGC is one of the major projects in Riyadh and is a whole city,” the executive said yesterday. “it will contain all components needed: land for factories, other facilities for logistics, as well as the residential and commercial areas.”
He added that the company is currently compiling the tender, though it has considered different ways of structuring it before releasing it to interested parties.
“We are reviewing different options for the tendering; there is no decision made yet. One is to award it to a main contractor who will then appoint subcontractors with Mawten still involved; one is to consider consortia and award it to different specialist contractors; and one is to perhaps split it into different zones and have different contractors.”
The IGC has been designed as per the specifications of the Saudi Industrial Property Authority, also known as Modon. The country is currently undergoing an industrial revolution from high government investment to complement its other modernising efforts in social infrastructure, new economic cities, new and upgraded airports and religious-based tourism.
The country has an Industrial Fund that acts as a public organisation to provide lines of credit to the industrial sector, particularly in the development of new projects.
Some major private-sector developments have arisen in the last 18 months to capitalise on the demand to produce domestically to fuel the country’s construction boom.
This includes the $10bn aluminium smelter, under development by a joint venture of Saudi Arabian mining Company and Alcoa, which has awarded a number of contracts with Abdullah Al Khodari, the contractor, among others.
First Bahrain, the developer, is also establishing a Riyadh-based equivalent of its Majaal warehousing project in Manama, to provide storage and manufacture space for small and medium-sized companies.
Al Dakheel, whose company focuses mostly on industrial real estate though has other developments in residential and hospitality, said the industrial sector provides steady returns in comparison to the more volatile sector of property real estate.
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