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Monday, August 25, 2008

Mega cities of opportunity

US$200 billion project in Yemen and Djibouti holds lucrative prospects for Malaysian contractors.

INTERNATIONAL ATTRACTION: An artist’s impression of the Al Noor Cities project.

The massive US$200 billion (RM668 billion) Al Noor Cities project, comprising a city each in Yemen and Djibouti, is taking shape and presents various investment opportunities for experienced contractors from Malaysia.

Al Noor Holdings Investment chief executive officer Mohammed Ahmed Al Ahmed said over the next six years, the project proposes an investment of US$31 billion (RM103.54 billion) in Yemen and US$20 billion (RM66.80 billion) in Djibouti, some by Al Noor, some by private investors.

In 15 years' time, according to plan, US$200 billion would have been invested in the project - US$105 billion (RM350.70 billion) in Yemen, US$70 billion (RM233.80 billion) in Djibouti and US$25 billion (RM83.5 billion) on the world's longest suspension bridge linking the two, he added.

Mohammed Ahmed and project executives and advisers expect "great appetite" for the build-own-operate contracts that will make up the bulk of developments within the Al Noor masterplan.

The project, the vision of Saudi-Yemeni construction magnate Sheikh Tarek Mohammed bin Laden, has attracted interest from a host of international companies. US giants Honeywell, Avaya and AIG Investments are already among its partners.

"It is a new city and it is happening," Mohammed Ahmed said at the launch of Al Noor Djibouti at Djibouti Kempinski Palace recently.

Malaysian contractors like Eversendai Corp, MMC, Gamuda and WCT Engineering that have vast experience in West Asia could stand as possible front-runners to bid for lucrative contracts in the project.

Mega projects undertaken by Malaysian companies in West Asian countries include the New Doha International Airport in Qatar worth US$543 million (RM1.81 billion), mixed development in the Al-Reem Island Project (Zone C) in Abu Dhabi (US$378 million; RM1.26 billion), Abu Dhabi City Centre (US$429 million; RM1.43 billion), Jizan Economic City in Saudi Arabia (US$2.9 billion; RM9.69 billion) and the Shohiba Independent Water & Power Project (US$2.6 billion; RM8.68 billion).

"Africa is the centre of the world with a population of almost one billion, while the Middle East North African region has a population of 400 million. We have all the ingredients to make this project a reality," Mohammed Ahmed said.

Al Noor Cities' master plan calls for one 1,500 sq km city in the southwestern tip of Yemen and a similar 1,000 sq km city in Djibouti. The cities will be linked by a 28.5km road and rail bridges.

The bridge will open up trade routes between Yemen, the Gulf countries and Africa. It will have a six-lane highway and four light rail lines, water and oil pipelines.

Al Noor Cities will also feature free trade zones, research and development facilities, technology parks and financial districts.

Agreements are in place with governments of both countries to start financing discussions with institutional and private investors, corporates and governments.

"The idea is to finance the project in progressive phases and implement it step by step," said Ross Connelly, managing director of Akkadian Private Ventures, a Washington-based project financing firm hired as an adviser.

There will be clear delegation of authority between the governments and administrations of the two cities, said Reem Alaloui, vice president of US-based AECOM International Development which is drawing up the free zone frameworks.

Dean Kershaw of management services firm L3, the project manager, said talks on the framework agreements will begin "within weeks" and should be completed before the end of the year.

By New Straits Times (by Zuraimi Abdullah)

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