Saudi Industrial Property Authority

Established : 2001
Type : Public
Category : Industrial cities
Head Office : Riyadh
Country : Saudi Arabia
Website : www.modon.gov.sa

Saudi Industrial Property Authority (الهيئة السعودية للمدن الصناعية ومناطق التقنية) (MODON) is a government organization created by the Government of Saudi Arabia in 2001 through Ministerial Legislation No.235 dated 27/8/1422H by a Royal Decree and represents industrial cities. Its mission, as an independent public agency, is the regulation and promotion of Industrial Estates and Technology Zones in the Kingdom of Saudi Arabia on both public and private industrial lands; and to encourage the private sector to become involved in the development, operation and maintenance of Industrial Estates. MODON’s larger goal is to have a Saudi industry capable to compete locally and globally.

MODON (مدن plural of the Arabic word "madina", meaning cities) is responsible for developing and supervising industrial lands in the Kingdom. Its mission is to undertake, as an independent public agency, the regulation and promotion of Industrial Estates and Technology Zones in the Kingdom of Saudi Arabia on both public and private industrial lands; and to encourage the private sector to become involved in the development, operation and maintenance of Industrial Estates. MODON is also responsible to create ideal environment for developing and upgrading Technology Zones in the Kingdom of Saudi Arabia. MODON’s larger goal is to have a Saudi industry capable to compete locally and globally.

Industrial Cities

Existing Industrial Cities

MODON has set up 29 industrial cities and oversees the organization of these cities spread over various regions of the Kingdom on a total area of approximately 150 million square meters in Riyadh, Jeddah, Dammam, Makkah, Qassim, Al-Ahsa, Madinah, Assir, Sakakah, Tabuk, Ha'il, Najran, Sudair, Shaqraa and Al-Taif. The investments in these cities exceed 250 billion riyals ($79.5 billion). These industrial cities employ more than 350 thousand workers.[1]

The following table shows the total area in industrial cities up to the end of 2011:

Sr. # Industrial city Total Area (M²)
1 Riyadh 1st. 451,000
2 Riyadh 2nd. 18,786,000
3 Jeddah 1st. 12,807,000
4 Dammam 1st. 2,704,000
5 Damamm 2nd. 24,800,000
6 Makkah 730,117
7 Al-Qassim 1,542,934
8 Al-Ahsa 1,543,000
9 Madinah 9,949,000
10 Assir 2,663,000
11 Al-Jouf 3,000,000
12 Tabuk 4,000,000
13 Hail 2,560,000
14 Najran 6,560,000
15 Al-Kharj 99,000,000
16 Jazan 39,500,000
17 Riyadh 3rd. 19,000,000
18 Al-Baha 3,000,000
19 Ar'ar 2,000,000
20 Al-Zulfi 19,000,000
21 Sudair 265,000,000
22 Jeddah 2nd. 8,000,000
23 Shaqraa 10,000,000
24 Al-Taif 3,000,000
25 Jeddah 3rd. 20,000,000
26 Jeddah 4th. 5,000,000
27 Al-Baha 2nd. 6,000,000
28 Dammam 3rd. 48,000,000
29 Qassim 2nd. 4,000,000

Sudair Industrial City

Sudair Industrial City set out to change the concept of industrial cities by providing integrated services, both key services such as water and energy, and support services such as housing, education, business and recreation centers, research centers and transportation, among others. Strategically located on a highway between Riyadh and Al-Qassim. Development of this city started in 2009.

Industrial Cities under development

MODON is developing new industrial cities in Sudair, Jazan, Ar’ar, Al-Kharj, Al-Gurayaat, Zulfi, Al-Baha and a second industrial estate in Jeddah. Also, MODON is re-developing existing industrial cities, as well as building model factories.

MODON is also establishing industrial cities in the reformatories of Al-Ha'er and Jeddah in cooperation with the Public Administration of Prisons.

Technology Zones

Technology zones are known around the world as Science Parks, Technology Parks, Research Parks, Techno-polis, or Innovation Centers. The term technology zone usually denotes a focus on technology, innovation, and tenant companies’ involvement in knowledge-based activities.

The International Association of Science Parks defines a science park as:

Technology zones are designed to facilitate the production and commercialization of advanced technologies by forging synergies among research centers, education institutions, and technology-based companies. Tenants of technology zones are mostly small companies pursuing an ambitious growth strategy based on the development and commercialization of new technology. Large and multinational companies are usually attracted to these zones as anchor tenants. To facilitate the successful commercialization of new technology in the market place, technology zone provide:

By aiding the growth of tenant companies, technology zones play a significant role in the development of local economies. They help create high-tech industries, jobs, attract foreign capital, and increase local and national competitiveness. This developmental role is particularly important in transition economies, which must absorb a great deal of structural unemployment and "catch-up" with rapid technological developments in the global economy.

Introduction

Technology zones are known around the world as science parks, technology parks, research parks, Techno-polis, or Innovation Centers. The term technology zone usually denotes a focus on technology, innovation, and tenant companies’ involvement in knowledge-based activities.

The International Association of Science Parks defines a science park as:

Technology zones are designed to facilitate the production and commercialization of advanced technologies by forging synergies among research centers, education institutions, and technology-based companies. Tenants of technology zones are mostly small companies pursuing an ambitious growth strategy based on the development and commercialization of new technology. Large and multinational companies are usually attracted to these zones as anchor tenants. To facilitate the successful commercialization of new technology in the market place, technology zone provide:

By aiding the growth of tenant companies, technology zones play a significant role in the development of local economies. They help create high-tech industries, jobs, attract foreign capital, and increase local and national competitiveness. This developmental role is particularly important in transition economies, which must absorb a great deal of structural unemployment and "catch-up" with rapid technological developments in the global economy.

Saudi Industrial Property Authority (MODON)

In 2001, a legislation was passed to set up the Saudi Industrial Property Authority – MODON (formerly Saudi Organization for Industrial Estates and Technology Zones - SOIETZ). Its objective is to undertake, as an independent public agency, developing the regulation and promotion of industrial estates and technology zones in the Kingdom of Saudi Arabia (KSA) on both public and private industrial lands, and to encourage the private sector to become involved in the development, operation, and maintenance of industrial estates and technology zones.

Role and Functions of MODON

The overall role of MODON is as the new planning and regulatory authority for specified industrial estates and technology zones in KSA, as outlined in the MODON bylaws: “The main purpose of MODON is planning of specified Industrial Estates in the Kingdom and encourages establishment, management, maintenance, operation and supervision of these estates.” “Specified Industrial Estates” refer to the existing stock of government-owned industrial estates and technology zones), together with private land, which were hitherto under the Ministry of Commerce & Industry has been entrusted MODON.

Key Functions of MODON

Describing Technology Zones In The Kingdom Of Saudi Arabia

MODON bylaw defines technology zones as: Lands and locations designated for the scientific technology clusters that provide infrastructure and additional services required to form a scientific technology environment encouraging invention, innovation and creativity in various fields to foster the development of vital knowledge intensive services and industries, business, and technology incubators and so forth. MODON direct and indirect roles in establishing technology zones in the Kingdom of Saudi Arabia:

Form and Function of Technology Zones in KSA

Technology zones in KSA will take the form of high technology industrial parks, which shall cluster together production-research-development-commerce-consultation-education-training to create a cohesive knowledge based environment.

Functions of Technology Zones

The following functions will be carried out in the Technology Zones:

Tenants’/Lessees’ Performance Criteria in Technology Zones

The following criterion determines tenants’/lessees’ acceptance of MODON policies within the technology zones:

  1. Tenants/lessee should provide high-technology and high value added products and services linked with research, development, and innovation.
  2. Tenants/lessee should be engaged in activities related to the technological specialization of the zone (except those that provide consultation and commercial services).
  3. Industrial and business tenants/lessees should fulfill at least the minimum R&D activity (funding or conducting) from its total operations.
Specialization of Technology Zones

Technology zones are classified by their technological/industrial specialization. Emphases are given to the specialization field of the tenants so that it matches the overall specialization of the technology zone. This specialization promotes the clustering of related enterprises in one area. Furthermore, specialization helps reduce the cost of construction, infrastructure, and services that are needed by the tenants. Clustering affect is proven to enhance technology transfer, cooperation, and integration between tenants in the technology zone. Examples of specialization fields of technology zones around the world include: Biotechnology, New Materials, Information and Communications technologies, Energy and Environment.

Infrastructure Specifications of Technology Zones

Each technology zone shall have its own infrastructure specifications (according to its specialization). Nevertheless, there are general specifications set by MODON such as nearness of the land to a city, development guidelines, building codes, environmental impact, and services needed.

Success Factors for a Technology Zone

MODON Plans For Technology Zones

MODON is working on the development of regulations and standards necessary for the development and management of the technology zones by utilizing available resources, MODON is also seeking cooperation with the King Abdul Aziz City for Science and Technology (KACST) and Saudi universities to establish a strategic partnership to ensure the technology zones to achieve its objectives of national policy for science and technology in the following specialization areas which are strategic to Saudi's economy and national security:

MODON Program for Technology Zones in KSA

MODON's program is to establish technology zones and incubators in different cities in the Kingdom of Saudi Arabia to serve the aforementioned strategic fields besides other fields that may be determined in future. Theoretically, it is preferred to construct technology zone for each targeted strategic field but it will be possible to consolidate some of the complementing fields in one zone. Thereof, seven projects are currently formed for MODON as part of its program for technology zones: Project number

  1. Energy and Environment Technology Zone.
  2. Water Desalination Technology Zone.
  3. Life Sciences and Biotechnology Zone.
  4. Information and Communication Technology Zone.
  5. Advanced Petrochemicals and New Material Technology Zone.
  6. Pilgrimage (Hajj) and Omrah Technology Zone (for knowledge intensive products and services relating to Hajj and Omrah).
  7. Dates Technology Zone (for knowledge intensive agriculture and production of dates).

Mechanisms for Implementation of Technology Zone Projects in KSA

Phased Development of Technology Zones

The technology zone area normally varies between 100,000 to 10,000,000 square meters (sqm). As an industrial estate, any technology zone can be constructed in phases. To start construction of a technology zone in KSA in an economical way, the first phase should be developed and promoted. The feasibility study of the whole project must also be studied through the implementation of this phase. For example, when the construction of a 500,000 m² area technology zone is initiated, an area of 200,000 m² can be developed as the first phase consisting of Central Services Building, Small/Medium size Enterprises Building, and leased/rented to prospective tenants/lessee. In addition attention should be paid to the development of infrastructure such as roads, civil work, electricity, telecommunication network, landscaping, etc. When the first phase is fully occupied by tenants/lessee then the second phase shall be implemented.

The Central Services Building (Building-1) to consist of three floors as follows: First floor: Auditorium, reception lounge (wide enough to hold exhibitions), training rooms, dining hall and information center. Second floor: Offices and incubator facilities Third floor: Offices for Technology Zone Management and Central Services. The Small/Medium size Enterprises Building (Building-2) consists of offices with flexible areas, and an open laboratory (or a prototype development center). The laboratory (or center) serves all the tenants in this building for free. The master plan of the technology zone must consist of five integrated sections (sub-zones) as follows:

  1. One section designated for R&D facilities and laboratories in which lands are rented for relatively low prices by developer/operator.
  2. One section designated for high-technology industries in which lands are rented for relatively low prices by developer/operator.
  3. One section designated for business and commerce in which lands or offices are rented at market prices by developer/operator.
  4. One section designated for higher education in which lands are rented for relatively medium prices by developer/operator.
  5. One section designated for central services (Central Services Building, and the SME Building) to be under MODON management. Offices located in these buildings are rented with relatively low prices by MODON.

b. Development Steps of Technology Zones In accordance with the set rules by MODON, the private sector can participate in the development and operation of a technology zone. Toward this direction, the following steps are adhered: Step 1: MODON shall study and identify a suitable land to be a prospective technology zone and shall acquire its legal status (either from the government or private lands). Step 2: MODON shall officially invite competitors to bid for the development of a technology zone through a BOT request for proposal. In case of an official agreement between the owner of the land and a developer, MODON role will be limited to providing the investor with the required technical information including location and size of land, development guidelines, building codes, and terms and conditions of license. Step 3: The competing developing entities shall submit technical proposal including development of plan, detailed engineering drawing for lands, buildings and infrastructure in the technology zone. An approved engineering office shall review the technical proposal. In addition, development entities shall submit a proposal reflecting financial aspects to meet the development costs, yields and revenue of different sites in the zone. Step 4: Based on the soundness of the proposal (both technical and financial), MODON shall grant the prospective developer/operator a license to develop/operate a technology zone. The licensed developer/operator must commence construction work within two years of receiving the license. MODON, in case of its lands, shall sign a development contract with the developer/operator and collect 20% from the total revenue from the developer/operator. A supervision contract shall be entered into between MODON and the owner if the land belongs to a private entity. Under this contract, MODON shall supervise the licensed developer/operator the management of the technology zone and collect annual fee from the owner. Step 5: During the two-years period, the licensed developer/operator shall make his efforts to market sites in the first phase of the master plan to potential customers so as to solicit early commitments to rent /lease specific sites. Step 6: After successfully marketing the first phase of development and obtaining commitments from tenants/lessees, the licensed developer/operator shall commence the construction of the first phase of the technology zone. Step 7: In accordance with the bylaws, MODON shall supervise the performance of the developer/operator and tenants/lessees of technology zone to ensure the compliance with the stipulated terms and conditions of license. When the first phase is fully occupied by tenants/lessees, the approved developer/operator shall commence the second phase of development of the technology zone.

c. Financing the Development of Technology Zones In Saudi Arabia, financing technology zones could come from various sources:

  1. Saudi Industrial Development Fund offers 50% loan for the developer of a technology zones who is licensed by MODON.
  2. Local Banks
  3. Foreign Investors interested in technology zone development projects (MODON has a list of international entities which expressed their interest in developing a technology zone in Saudi Arabia).

MODON will work diligently with all the parties involved and provide all the information needed for successful development and operation of technology zones to make them successful economic endeavors.

Recommended allocation of land in the first phase

MODON achievements

Enterprise Business Solutions contract with the Saudi Telecom Company to provide the industrial cities with the latest technical services and an integrated security system for the protection of those cities through 24-hour surveillance using advanced technical methods, and the work is in progress. The existing industrial cities will become smart industrial cities upon completion of this project.

Build-Operate-Transfer (BOT) contracts for the provision of water in the industrial cities of Jeddah, Riyadh, Al-Qassim, Dammam and Al-Ahsa. The specialty of this product is to provide vital water to the industrial cities at very competitive prices.

Transmission of electricity to the industrial cities.

"District Cooling" project, in Jeddah 2nd industrial city, as the first project of its kind in the industrial cities, characterized with less energy consumption, lower cost and less pollution of the environment.

Project Management System (PMS), a sophisticated electronic system to manage MODON’s property and facilitate the allocation of industrial lands.

Security Services project to provide security services in the industrial cities round the clock. Approximately 240 employees are working on the project.

Director Generals of MODON

Tawfiq Al Rabiah was director general of MODON from April 2007 to January 2012.[2]

Eng. Saleh Al-Rasheed has been the Acting Director General since December 2011.[3]

During his tenure in MODON, Eng. Al-Rasheed has led many initiatives and projects; including the expansion of the current industrial cities as well as the completion of the infrastructure services. Eng. Al-Rasheed established new industrial cities and the number of industrial cities has reached 29 industrial cities with nearly 150 million square meters developed industrial lands. Furthermore, he played a key role in attracting local and international factories for investment inside the industrial cities such as Isuzu Auto Factory, Siemens Factory for Gas Generators, GE Factory for Oil and Gas, Schlumberger Factory etc. The number of factories has now reached 4700 factories, which include local and international factories.

One of his main achievements is the launch of 200 ready-built factories as a first experiment of its kind in the Kingdom, with model specifications, therein establishing the entire factory building outfitted with complete services, in all parts of the Kingdom. He attracted the private sector to invest in service, residential and logistics projects.

Eng. Al-Rasheed oversaw the operation and development of numerous projects inside the industrial cities including water projects on BOT system; processing the surplus water at the water treatment plants; expanding green areas; rehabilitating the infrastructure of the current industrial cities; improving the procedures of allocating lands and factories follow-up; and security and safety management, as well as the preservation of the environment in the industrial cities.

Eng. Al-Rasheed is a member of the Board of Directors of the following entities:

Eng. Al-Rasheed previously served as Director of Communication and Information Technology at MODON from June 2007; likewise, he was a key member in several corporates of the Saudi private sector.

Eng. Al-Rasheed holds a Bachelor's degree in Computer Science and Information Technology from King Saud University and is certified in Advanced Business Management from IMD Business School. He has also received leadership training and certification from world-class institutes and organizations such as MIT and GE.

References

  1. ↑ MODON official website
  2. ↑ "H.E. Dr. Tawfiq Al-Rabiah". Jeddah Economic Forum. 2012. Retrieved 30 August 2012.
  3. ↑ "Director General (Acting)". MODON. Retrieved 30 August 2012.

External links