Chief executive says Siemens is getting prepared to help the kingdom achieve its economic diversification goals
Exclusive: Siemens eyes role in development of Saudi Arabia's $500bn Neom mega city
Siemens, Germany’s industrial giant, is in talks with Saudi Arabia for a role in the development of Neom, the $500bn special economic zone announced by the kingdom last month, its chief executive said.
“Of course I have been talking to people there [in the kingdom],” Joe Kaeser told The National in an interview in Abu Dhabi. “Are we interested: absolutely and so are thousands of others. Are we capable of delivering a major part of the solution [for Neom]? Absolutely.”
Mr Kaeser, who is visiting the UAE capital for an internal company conference, said Siemens has a long established relation with Saudi Arabia and it is getting prepared to help Opec’s biggest oil producer achieve its economic diversification goals.
“I would not be too surprised if anytime soon, there would be a major announcement about the cooperation between the kingdom and Siemens on how to assist and help the kingdom in achieving the Vision 2030 goals, which Neom is part of,” he said.
Saudi Arabia, which is heavily dependent on sale of hydrocarbons for revenues, is pursuing a fiscal and economic reform agenda under the overarching Vision 2030 programme and aims to open up the biggest Arab economy to foreign investment. Crown Prince Mohammed Bin Salman, senior ministers and government officials hosted the who’s who of the global financial and business elite for three days in Riyadh last month and launched Neom, on day one of the Future Investment Initiative.
The metropolis overlooking the the Red Sea to the south and the Gulf of Aqaba to the west, will be backed by more than $500bn from the kingdom’s coffers, investments by its sovereign wealth fund Public Investment Fund (PIF), and local as well as international investors. Saudi Arabia is set to bring a major global fund with access to a worldwide network of investors and major companies on board to drive the success of Neom.
Spanning 26,500 square kilometres, Neom’s land mass will extend into Egypt and Jordan, making it the first private zone to cover three countries. It will focus on nine specialised investment sectors including energy and water, mobility, biotechnology, food, technological and digital sciences, advanced manufacturing, media and entertainment.
Prince Mohammed dubbed Neom a “place for dreamers”, a project that will be built with the newest technologies.
Siemens has the ability to provide Neom with solutions for affordable, reliable and sustainable power; efficient network of transportation; security and safety; water and waste water management and sustainable efficient buildings, Mr Kaeser said.
“These are the five major elements of a city and we have them all together. There is no other company in the world, not a single one, which can do all five in a meaningful way, except Siemens,” he said. “People in the kingdom know what Siemens is all about.”
Neom is being led by Klaus Kleinfeld, the former chief executive of Arconic, who Mr Kaeser said, is a “good friend, partner and former colleague. This feels really good because he knows exactly what Siemens is capable of.”
The vision of the crown prince is “well understood on what needs to be done to open up the kingdom to the world in both tourist as well as economic development [fronts],” he added.
Virgin Hyperloop One, the futuristic transportation concept inspired by Elon Musk that promises to connect cities at speeds of 700 miles per hour and expects to see the first rollout of its technology by 2019, is also eyeing potential collaboration in the Neom project, given the alignment between Saudi Arabia’s vision for Neom and hyperloop’s technology.
“What we see in the Middle East today, the Vision 2030 [in Saudi Arabia] and Vision 2050 in the UAE. Decades ago the UAE already understood that there’s got to be time after the hydrocarbons and they have been remarkably developing their options,” Mr Kaeser said. “In Egypt, President Abdel Fattah El Sisi…knew that there’s no economic development if there is no energy, so he has started to build three biggest gas turbine power plant, ever built on the planet all of them together, providing 14,400 megawatts of power – 50 per cent of the power supply of Egypt.
In Egypt, Siemens won in 2015 the biggest single order in its history – an €8 billion order for gas and wind power generation.
“What I think I see is that the UAE, Egypt and Saudi Arabia now are really coming together and lead by purpose in this region, which I believe is a blessing for the whole world. That’s a big benefit. On the global scale if there’s a shaky Middle East, there’s a shaky world,” the chief executive said.