JEDDAH, April 23 Saudi Arabia's second city will push ahead with plans for a $170 billion riyal ($45 billion) overhaul intended to turn Jeddah into a trade and tourist centre to rival other Gulf Arab cities, officials said.
The sprawling Red Sea port city of more than 3 million people has been struggling with inadequate infrastructure, pollution, densely populated slum areas, a water supply shortage and the lack of a city-wide sewage system, said Ibrahim Kutubkhanah, Deputy Mayor for Constuction and Projects.
Once the diplomatic capital of the world's biggest oil exporter, the city has fallen into neglect and marginalisation over the past two decades.
Now it's notorious for potholed streets with drains that occasionally brim over with rancid sewage.
The "Bride of the Red Sea", as locals dub it, has seen its population triple in 20 years -- partly because of the large numbers of pilgrims who head to nearby Mecca and then stay on, often illegally -- while services have failed to keep pace.
"In order to rectify all these problems you cannot just come up with a fire-fighting method ... There must be a plan and a detailed strategy. That's what we are doing," Kutubkhanah said.
"Most cities grow about 2 to 3 percent a year but Jeddah's growth rate went up about 10 percent a year."
Twenty-five percent of the city's population live in slum areas that account for five percent of Jeddah's land size, Kutubkhana said, outlining plans to end slums within 20 years.
Real estate projects aimed at transforming the city's slum areas into high-rise buildings have started to take shape with developer Dar Al-Arkan's 4300.SE work in downtown Jeddah.
The project, which includes 15 million square metres (3,700 acres) of residential units, luxury hotels and shopping malls, will be completed over the next five years and is estimated to cost up to 50 billion riyals.
Kingdom Holding 4280.SE, Prince Alwaleed bin Talal's company, launched plans to develop 7.1 sq km last year, including what could be the world's tallest tower. Kingdom's projects are expected to cost 100 billion riyals.
"Lately there has been an increase in financial backing for Jeddah's budget, with sufficient funding to start many initiatives," Jeddah's Mayor Adel Al-Faqih said.
He said the recent spike in oil prices has enabled the country to provide the city with the funding for projects.The financial downturn has not held the plans back.
Jeddah's budget for 2009 reached 1.4 billion riyals, more than double what it was five years ago, Jeddah City Council Chairman Tarek Fadaak said.
The municipality is also implementing a 20 billion riyal transportation plan including a light rail system, buses and sea transport over the next 15 years. (Editing by Paul Casciato) ($1=3.75 riyals)