Once a provincial backwater, the Jordanian port town of Aqaba is in the midst of a vast regeneration programme that will reposition it as the ‘gateway to the Levant’

Saraya CEO Shadi Majali (photo: Jason Larkin)

Desert dream

PUBLISHED IN |  Aug 25, 09

Aqaba might have only a handful of traffic lights, but $18bn of investment is tearing up its streets. This massive cash injection (for a town of just under 100,000 people) is set to transform a sleepy Jordanian port on the top tip of the Red Sea into a regional hub with world-class tourism and trade facilities. It’s one of the most ambitious overhaul projects in the recent history of the Middle East.

The signs of change are everywhere. Bulldozers are flattening a huge plot of land next to the border with Israel, preparing it for yet another property project. Drive through town and you’ll see dozens of construction sites in different stages of completion. And at night, blue lights from the newly opened Hotel Kempinski, reflected in the Red Sea, can be seen all over the bay.

Conceived eight years ago by King Abdullah II as a way to strengthen Jordan’s only access point to the sea, the Aqaba Special Economic Zone Authority (ASEZA) was granted near-autonomous status in order to cut the red tape and clear the way for foreign investors. ASEZA offers impressive incentives, such as a flat 5 per cent tax rate and no duties, 100 per cent foreign ownership and the right of companies to employ up to 70 per cent foreign labour. ASEZA functions as a one-stop-shop, so there’s no need to go through the capital Amman or wander through the long corridors of bureaucracy.

“It’s no secret that ASEZA is the King’s pet,” says Bilal Al Bashir, deputy chief commissioner of ASEZA. And how important Aqaba’s development is to Jordan is highlighted by the fact that the previous chief commissioner, Nader Al Dahabi, is now the kingdom’s prime minister.

An initial trickle of foreign currency has turned into a torrent in the past two years, especially with the announcement this February of the Marsa Zayed project. This $10bn investment by a joint venture of Abu Dhabi’s five leading property developers, launched in the midst of the economic crisis, will create a tourist and residential complex.

There are also two new industrial estates, two new hospitals, two new universities going up, and roads and the sewage system are being overhauled – all of which, says Al Bashir, are part of Aqaba’s master plan to become a regional focal point, or in his words, “the gateway to the Levant”, by 2020.

A new port

Aqaba current port (photo: Jason Larkin)

Aqaba's current port (photo: Jason Larkin)

The most ambitious part of the revamp is the relocation of the port of Aqaba from its current position in the heart of the town to an open industrialised area 15km south of the city where it can receive more ships and provide more facilities. The new port is to be completed by 2015. “Aqaba’s port has always been a very important gateway to Iraq”, says Al Bashir, “and now, we are building upon the gradual stabilisation of the situation in Iraq and especially upon the re-emergence of the Iraqi market and its trade with the Far East. Doing business here therefore will open up a corridor for the reconstruction efforts in Iraq.”

Indeed, the American withdrawal from Iraq might hold a great opportunity for Aqaba, as thousands of vehicles, trucks and machinery are shipped back from the Middle East to the US. There is only one other potential port for this huge income generating process – the port of Kuwait.

The backbone of Aqaba’s master plan is four property projects, sprawling from the northern tip of the bay bordering with Israel to the southernmost point, close to the Saudi border. The 6,000 new hotel rooms planned in the four projects – a five-fold increase on the current number of hotel rooms – will enable Aqaba to compete with neighbouring Eilat in Israel and Sharm el-Sheikh in Egypt. “We’re not aiming at the all-inclusive market,” says Walter Plangenauer, general manager of Tala Bay resort, the southernmost and first development to open. “We go for elite tourism, because the masses bring you only a short-term benefit.” Austrian-born Plangenauer, who previously ran resorts in Egypt and Thailand, arrived in Aqaba last October. Now he runs this 2.7m sq m project, which boasts over 1,000 hotel beds, 1,500 residential units, a 30,000 sq-metre marina and a golf course.

Meanwhile, on the opposite side of town, next to King Abdullah’s villa, Shadi Majali, CEO of Saraya Aqaba, is inspecting his new project. When MONOCLE visits, he drives through the 634,000 sq m plot of land, packed with grey concrete buildings, trying to decide which exact hue of yellow or brown would blend best with the biblical backdrop of the Edomite Mountains.

Unlike many recently developed Middle Eastern cities, there won’t be a sudden sprouting of skyscrapers and extravagant glass buildings in Aqaba. According to the master plan, all buildings will be limited to seven floors, and their colours must be in tone with the blue of the sea or the earth’s browns.

Saraya Aqaba, set to commence operations by 2011, is a subsidiary company of Saraya Holdings, controlled by the Lebanese mogul Saad Rafik Hariri. “Sixty five per cent of the complex is already sold,” says Majali, adding that around 80 per cent of the buyers are Jordanians and the rest are other Arabs and Europeans. Relatively unaffected by the crisis, a dunam (equivalent to 1,000 sq m) of land here costs on average $85,000, compared to $5,000 five years ago.

Boost to tourism

The newly opened Kempinski hotel (photo: Jason Larkin)

The newly opened Kempinski hotel (photo: Jason Larkin)

Twenty foreign companies have opened offices on the Aqaba International Industrial Estate and 20 to 25 more are on their way, according to its American CEO, Sheldon Fink. There’s a Chinese shoe-maker who moved his business from the UAE and a German company that assembles and markets lasers. There are also a few Arab-Israeli businesses venturing here from neighbouring Israel, although they tend not to mention their nationality to their Arab clients.

The changes have already affected Aqaba’s population. After years of being considered a place to escape from, official figures show that it now attracts more internal immigrants than any other place in the kingdom. The population has risen from 65,000 in 2001 to 95,000 in 2009. Construction sites are attracting mainly immigrant workers from Egypt, Bangladesh and India, while young, middle class Jordanians are coming here to work in the tourism industry or to open new businesses.

Ashraf Haddadin, aged 30, just opened his Venice jewellery shop on Zahran Street, parallel to Aqaba’s seafront. He came from Amman, he says, because it’s so easy now to open a shop in Aqaba. For now he sells mainly silver objects but hopes to “make this place fancier when more tourists come.”