x Abu Dhabi, UAEMonday 22 January 2018

Jeddah floods a real drain on its economy

Devastating floods in recent years have heightened the need for infrastructure upgrades in Saudi Arabia's second city.

The damage during January's flood in Jeddah is estimated at 6 billion Saudi riyals.
The damage during January's flood in Jeddah is estimated at 6 billion Saudi riyals.

As shopkeepers and housewives cleared up the mess left by the latest severe flooding in Jeddah just over two months ago, a dark joke began to circulate in shisha cafes and offices.

While Tunisians demonstrated for democracy and Egyptians brought down the presidency of Hosni Mubarak, residents of Saudi Arabia's second city were venting their anger over an altogether more mundane issue - inadequate drains.

Floods in the past two years are believed to have killed more than 500 people. Aside from the devastating human cost, they have also taken a heavy toll on business, swamping warehouses and shops, and leaving roads submerged under metres of water.

The chaos prompted many Saudi Arabians to question how such a disaster could happen in the commercial centre of one of the world's wealthiest nations.

Talk to many businessmen in the Red Sea city, and it is not long before the topic of poor drainage arises.

"I'm afraid what may happen to my business if it rains again next year," says Talal Kassim, who was forced to shut his small convenience shop for five days after the store was engulfed with dirty water.

January's floods are estimated to have cost 6 billion Saudi riyals (Dh5.87bn).

While that figure is small change for the world's biggest oil-producing economy, it has proved a crippling burden for many businesses. Mr Kassim says he lost several thousand riyals worth of stock when the flooding hit.

As well as being Saudi Arabia's second city, Jeddah is also a major port and the gateway for religious tourists visiting Mecca and Medina, so the stakes are high.

Canals established across the city as flood defences were unable to carry the large volume of water that fell in unusually heavy rains in November 2009 and January this year, and there is no sewerage system. Waste water is stored in tanks before being collected.

The neglect reflects a broader malaise in public services in the country, where much of the infrastructure dates back to the 1970s oil boom. As oil prices weakened during the following two decades, spending also waned.

With oil prices once again soaring, the government has promised a renewed push to finish projects. During the global financial crisis, it rolled out a US$400bn (Dh1.46 trillion) five-year infrastructure spending plan.

Jeddah is still largely waiting for that cash to trickle down.

"Infrastructure should be the government's focus," says Abdullah Murad, a commercial lawyer.

He is pursuing claims against the government and insurers on behalf of clients whose homes and businesses were waterlogged during the last floods.

"What we have seen in Jeddah is solid proof that public services have to improve," he says.

For one, that means improving public transport. In a city of four million people plagued by frequent traffic jams, public buses are a rare sight. Other forms of public transport are non-existent.

But a sewerage system is viewed by many as the most pressing need.

Signs are emerging that policymakers are finally starting to listen.

"The infrastructure has been neglected," Prince Khalid Al Faisal, the governor of Makkah province, said last month at the Jeddah Economic Forum in a rare admission of government culpability.

Work was under way on a sewerage system to serve most parts of Jeddah and was expected to be finished by the end of next year, he said.

Last month officials revealed a host of international consultancy firms were competing to lead the management of a flood and rainwater drainage system.

Plans involve extending an existing floodwater canal in the city's north to link with a canal in the east of Jeddah. Buildings constructed in floodplains would also be removed, officials said.

But there are worries that the unrest sweeping the rest of the Arab world may intervene. Distracted by the demands of growing youth unemployment and housing shortages, policymakers might re-route resources from infrastructure to job creation. Against a backdrop of regional instability, King Abdullah has recently unveiled expenditure increases totalling $129bn, targeting social benefits.

"There is a legitimate concern that some of the focus of upgrading infrastructure may be affected by other pressures," says Jarmo Kotilaine, the chief economist of NCB, the kingdom's biggest bank.