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and communications (ITC) and manufacturing.
The metro rail package financials have been analysed to understand
how local product and service suppliers will contribute to the design
and build phase. The ADA has worked out that some 50 percent
of the critical products and services that are being demanded by
work on the metro component of the King Abdulaziz Project for
Public Transport in Arriyadh can be met locally. These include civil
engineering work on tunnelling, bridges and the track itself.
There is also a massive call for logistical support, the provision
of warehousing and transport and the clearance and movement of
imported goods, along with the rental and leasing of property. Beside
basic inputs such as cement, aggregates, basic and fabricated steel
and other items such as bricks, ceramics and glass, there is a need for
a huge range of mechanical and electrical equipment and experts to
install and maintain them.
A similar study has been made of the local opportunities for the
bus component of the public transport system. According to the
ADA’s analysis, critical products and services required by more than
half of the bus network include engineering design for the likes of
roads, bridges, halts and the installation of intelligent transportation
systems installation at bus stations.
The key opportunities for local business include the manufacturing
of technical equipment, over ground and underground service
pipelines, the construction of buildings, civil engineering,
architecture and engineering activities and rental and leasing
services. In addition there will be opportunities in the manufacture of
non-metallic mineral products, basic metals and fabricated metal.
Once the bus and metro systems are running there will be long-
term local opportunities to support their operations. Once again the
Arriyadh Development Authority has conducted careful analyses of
where Saudi-based businesses can leverage their skills, experience
and presence in the city. The ADA concludes that at least half of
the operational categories classed as critical in the bus network are
going to be met locally. The highest impact sectors will be in the
manufacture and assembly of motor vehicles, trailers and semi-
trailers, along with the supply and repair of such vehicles and the
warehousing and support activities for transport. On the local
manufacturing side there will be the supply of cement, aggregates
and refined petroleum and rubber and plastics products. The
requirements for the execution of the project are staggering: 600,000
tonnes of steel enough to build 80 Eiffel Towers and around 4.3
million cubic meters of concrete, enough to fill 1,800 Olympic size
swimming pools and which if set on a soccer pitch would reach over
600 meters in height.
The opportunities supporting the operation of the metro network
are of course of an even greater order. The ADA reckons that half
of the expenditure on running the metro will be local. Besides the
provision of the workforce, Saudi firms will be providing support
in IT and telecoms, as well as railway maintenance, signalling and
electronic and communications networks. Also identified is a demand
for materials and tools as well as water infrastructure work.
Arriyadh already leads the Kingdom in terms of the number
of talented young graduates it produces. Nevertheless, the ADA’s
assessment is that further capital investment in training and the
acquisition of new skills sets will be needed to meet the requirements
of more than half of the jobs that will be generated by the King
Abdulaziz Project for Public Transport in Arriyadh. It is rightly
pointed out that it is important there are properly-qualified Saudis
to occupy the wide spectrum of jobs that are coming into being.
Otherwise, there is a risk that the demand for skills will only be
met from external sources. This is inimical to everything that
the Government has been striving to achieve with its Saudization
policies.
Leveraging Opportunities for Localization
Once this massive transport project is completed the ADA is
expecting the annual Gross Value Added in goods and services to
remain at around $1.2 billion. Job creation will taper to average of
7,000 yearly but by then many of the economic seeds that the public
transport system is currently sowing, will have grown up into strong
young plants, thanks to the new ‘enabling infrastructure and the
policy of localization.
There are also non-quantifiable broad or supply-side legacy
impacts, sometimes referred to as residual long-term positive
externalities. Here it is expected that judicious policy interventions
by the ADA and other stakeholders could ensure that further benefits
are ‘locked-in’ for Arriyadh and Saudi Arabia well beyond 2020.
These are likely to include the development of business operations
through research and development and induced innovation, products
and services. There will also be the continued fostering of enterprise
growth and the improvement of the environment for business and
indeed, exports. Each and every one of these developments will be of
consummate interest to foreign investors.
At its most obvious, the King Abdulaziz Project for Public
Transport in Arriyadh itself is involving local businesses in its
supply chain and throwing up multiple opportunities on a major
scale. There are, for instance, contracts to be let for the cleaning
and maintenance of 85 stations and hundreds of metro carriages