Saudis to Give Fuel Subsidy for Jazan Power Plant
Posted on: Monday, 12 May 2008, 00:00 CDT
SAUDI Arabia will subsidise the cost of fuel for a power plant that will supply Jazan Economic City (JEC), a US$30 billion (RM96 billion) project that is being developed by MMC Corp Bhd and the Saudi Binladin Group.
This means that the power plant could offer cheap electricity rates for factories that operate in the new city that is to be built over 25 years.
An immediate beneficiary is an aluminium smelter to be built by MMC, the Binladin Group and Aluminum Corp of China Ltd (Chalco).
"The competitive tariffs at JEC will drastically reduce the smelter's production costs and give it an important competitive advantage to serve the growing world market for aluminium in a period of rising energy costs," said Feizal Ali, chief of MMC International, the overseas arm of MMC Corp.
The commitment to subsidise fuel for the power plant was formalised under a pact.
The deal was signed by the Saudi Arabian General Investment Authority (SAGIA) governor Amr Al-Dabbagh, Luo Jianchuan, president of Chalco, Feizal and Mohamad Saleh Binladin.
MMC will hold half of the power plant for JEC, which will initially generate 2,460 megawatts of electricity.
MMC will also have 50 per cent of the port that will serve JEC. Construction of the smelter, power plant and port are due to start in the fourth quarter of this year.
Launched in 2006, JEC has attracted about US$18 billion (RM57.6 billion) in investments. It will have two aluminium smelters, an alumina refinery, a steel mill and iron ore hub.
JEC will also develop an automotive cluster to capitalise on the aluminium smelter and to develop downstream aluminium industries.
The master plan also provides for an oil refinery, a marine industrial complex, a primary metal processing facility, a copper processing plant, a zinc processing plant, a metal fabrication facility, as well as an agro-based industry.
It will also have secondary industries such as silicon processing and the production of pharmaceuticals and plastics.
(c) 2008 New Straits Times. Provided by ProQuest Information and Learning. All rights Reserved.
Source: New Straits Times
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