CEO of Red Sea Development talks latest updates on Saudi’s mega tourism project

Saudi Arabia’s ambitious luxury tourism destination, The Red Sea project, is poised to contribute nearly SAR 22 billion to the country’s economy, as well as capture a significant share of the SAR 62 billion spent in outbound tourism from Saudi Arabia. Works on the project are currently underway, as construction of permanent project components are set to start in the second half of 2019.

In an exclusive interview with Argaam, John Pagano, CEO of The Red Sea Development Company, discusses investor interest for the project and highlights ongoing construction updates.

Q: What makes the Red Sea project so attractive for investors?

A: The Red Sea Project is the most ambitious tourism development in the world. As part of the project, we are creating diverse range of luxury hospitality options, from single island luxury properties to design-driven beachfront resorts, holistic wellness retreats and innovative inland experiences in the mountains and desert dunes. Supporting the offer will be a comprehensive array of hospitality experiences including food and beverage, luxury retail, entertainment, cultural and recreational activities.

The Red Sea Project is ideally positioned to respond to international global tourism trends and is poised to contribute SAR 22 billion in economy as well as capturing a share of the SAR 62 billion in outbound tourism spend from Saudi Arabia.

We are pursuing partnerships with organizations who are interested in working with us to realize the objectives of the project and who share our commitment to enhance the natural ecosystems that make the destination so unique.

Read: Red Sea project draws strong investor interest: Official

Q: Have you started signing contracts for the hospitality offerings in the first phase?

A: Phase one of the masterplan includes 14 hotels across five islands and two inland resorts. We are currently in active negotiations with the brands that will manage those assets and over the next few months will begin to complete contracts. We received a very positive response from the brands that we invited to participate in the tender.

Q: What steps are being taken to support the construction and maintain high quality standards?

A: Ever since the project was unveiled, we have been taking a pioneering approach in order to meet or surpass international construction and sustainability standards. We have employed project management and construction professionals experienced in large infrastructure projects, marine works, and smart city design and luxury tourism destinations. We have also engaged environmental consultants to provide site-specific data and conduct strategic impact assessments with detailed environmental management plans that will guide construction works and minimize impact on critical habitat areas.

Q: When is construction expected to begin? When can we expect the construction tenders to be out?

A: Construction is currently underway at the destination. We have opened a Project Base Camp that currently houses 60 project and construction managers, health safety and environmental professionals, government affairs specialists and other key staff. The Base Camp is overseeing construction of essential supporting infrastructure including a Construction Village that will house up to 10,000 people and a Management Village, including offices and accommodation, to support a wider range of project management and corporate functions.

We are also building temporary roads and jetties and a bridge connecting the hub island to the shore in order to transport materials and equipment onto the site.  Construction of permanent project components is due to start in the second half of the year.

Procurement for the enabling works has already commenced and will continue throughout the second quarter of 2019. Tenders will be issued on an ongoing basis as the development progresses.

Read: Red Sea Development opens staff accommodation base camp

Q: What steps will be taken to ensure that the project is sustainable and has a lower carbon footprint?

A: Our master plan is informed by the largest marine spatial planning simulation ever undertaken, modeling the environmental impact of developing and operating the destination. As a result of that simulation, our masterplan will now deliver a net positive conservation benefit of up to 30 percent within the next two decades, which would be equivalent to designating the entire destination as a Marine Protected Area.

As part of our efforts to achieve this, we plan to leave 75 percent of the islands untouched and, in fact, will designate nine of them as special conservation zones to protect the species that live and thrive there. The destination will rely 100 percent on renewable energy and will be completely carbon-neutral once operations commence.

We plan to implement a range of policies including zero waste-to-landfill, zero discharge-to-sea and a total ban on single use plastics. In addition, landscaping projects will emphasize natural flora adapted to the climate and local environment, such as mangroves which grow in sea water, as well as methods to enhance water reuse while minimizing desalination and brine discharge.

Q: How will the project contribute towards employment levels in line with Vision 2030?

A: The Red Sea Project was conceived as a job creator, a cultivator of entrepreneurial activity and a driver of economic development in line with the objectives of Vision 2030. We estimate that the project will contribute up to SAR 22 billion per year to the Kingdom’s gross domestic product (GDP) and support up to 70,000 jobs.

By completion, the project will directly employ around 35,000 people and will support an equivalent number of jobs in the broader economy by creating opportunities for local businesses, entrepreneurs and supporting industries. As an employer, our primary mandate is to create opportunities for Saudis and we will be investing significantly in training and development programs to foster the skills and capabilities that we need.

Write to Paromita Dey at paromita.d@argaamplus.com