MODON is the plural of the Arabic word "Madina", meaning cities. It is used here as a business name for
Saudi Industrial Property Authority

Saudi Industrial Property Authority

Saudi Industrial Property Authority was created by the Government of Saudi Arabia in 2001 through legislation by a Royal Decree. Its mission, as an independent public agency, is the regulation and promotion of Industrial Estates and Technology Zones in the Kingdom of Saudi Arabia on both public...

 (هيئة المدن الصناعية ومناطق التقنية), a government organization created by the Government of Saudi Arabia in 2001 through Ministerial Legislation No.235 dated 27/8/1422H and represents industrial cities. MODON is responsible for developing and supervising industrial lands in the Kingdom. Its mission is to undertake, as an independent public agency, the regulation and promotion of Industrial Estates and Technology Zones in the Kingdom of Saudi Arabia on both public and private industrial lands; and to encourage the private sector

Privately held company

A privately held company or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders or company members which does not offer or trade its company stock to the general public on the stock market exchanges, but rather the...

 to become involved in the development, operation and maintenance of Industrial Estates. MODON is also responsible to create ideal environment for developing and upgrading Technology Zones in the Kingdom of Saudi Arabia. MODON’s larger goal is to have a Saudi industry capable to compete locally and globally.

Existing Industrial Cities

MODON has set up 20 industrial cities and oversees the organization of these cities spread over various regions of the Kingdom on a total area of approximately 280 million square meters in Riyadh

Riyadh

Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to 5,254,560 people, and the urban center of a...

, Jeddah

Jeddah

Jeddah, Jiddah, Jidda, or Jedda is a city located on the coast of the Red Sea and is the major urban center of western Saudi Arabia. It is the largest city in Makkah Province, the largest sea port on the Red Sea, and the second largest city in Saudi Arabia after the capital city, Riyadh. The...

, Dammam

Dammam

Dammam is the capital of the Eastern Province of Saudi Arabia, the most oil-rich region in the world. The judicial and administrative bodies of the province and several government departments are located in the city. Dammam is the largest city in the Eastern Province and third largest in Saudi...

, Makkah, Qassim, Al-Ahsa, Madinah, Assir, Al Jouf, Tabuk, Hail and Najran. The investments in these cities exceed 250 billion riyals ($.66.7 billion). These industrial cities employs more than 300 thousand workers.

The following table shows the total area in Industrial Cities up to the end of 2010:

Sr. #	Industrial city	Total Area (M²)
1	Riyadh 1st.	451,000
2	Riyadh 2nd.	18,786,000
3	Jeddah 1st.	12,807,000
4	Dammam 1st.	2,704,000
5	Damamm 2nd.	24,800,000
6	Makkah	730,117
7	Al-Qassim	1,542,934
8	Al-Ahsa	1,543,000
9	Madinah	9,949,000
10	Assir	2,663,000
11	Al-Jouf	3,000,000
12	Tabuk	4,000,000
13	Hail	2,560,000
14	Najran	6,560,000
15	Al-Kharj	100,000,000
16	Jazan	39,500,000
17	Riyadh 3rd.	19,000,000
18	Al-Baha	3,000,000
19	Ar'ar	2,000,000
20	Al-Zulfi	19,000,000

Industrial Cities under development

MODON is developing new industrial cities in Sudair, Jazan, Ar’ar, Al-Kharj, Al-Gurayaat, Zulfi, Al-Baha and a second industrial estate is Jeddah. It is re-developing existing industrial cities, as well as building model factories.

MODON is also establishing industrial cities in the reformatories of Al-Ha'er and Jeddah

Jeddah

Jeddah, Jiddah, Jidda, or Jedda is a city located on the coast of the Red Sea and is the major urban center of western Saudi Arabia. It is the largest city in Makkah Province, the largest sea port on the Red Sea, and the second largest city in Saudi Arabia after the capital city, Riyadh. The...

 in cooperation with the Public Administration of Prisons.

Technology Zones

I. Introduction

Technology zones are known around the world as science parks, technology parks, research parks, Techno-polis, or Innovation

Innovation

Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society...

 Centers. The term technology zone usually denotes a focus on technology, innovation, and tenant companies’ involvement in knowledge-based activities.

The International Association of Science Parks defines a science park as:

• a property-based initiative, which has formal and operational links with universities or other higher educational institution, or major centers of research;

• designed to encourage the formation and growth of knowledge-based industries, or high value-added firms, normally resident on site; and
• has a steady management team actively engaged in fostering the transfer of technology and business skills to tenant organizations.

Technology zones are designed to facilitate the production and commercialization of advanced technologies by forging synergies among research centers, education institutions, and technology-based companies. Tenants of technology zones are mostly small companies pursuing an ambitious growth strategy based on the development and commercialization of new technology. Large and multinational companies are usually attracted to these zones as anchor tenants. To facilitate the successful commercialization of new technology in the market place, technology zone provide:

• networking and coordination with scientific research institutes and laboratories;
• financial support, consulting, and assistance in obtaining venture capital;
• professional, technical, administrative and legal assistance;
• information and telecommunications services; and
• supportive business infrastructure.

By aiding the growth of tenant companies, technology zones play a significant role in the development of local economies. They help create high-tech industries, jobs, attract foreign capital, and increase local and national competitiveness. This developmental role is particularly important in transition economies, which must absorb a great deal of structural unemployment and "catch-up" with rapid technological developments in the global economy.

Saudi Industrial Property Authority (MODON)

In 2001, a legislation was passed to set up the Saudi Industrial Property Authority – MODON (formerly Saudi Organization for Industrial Estates and Technology Zones - SOIETZ). Its objective is to undertake, as an independent public agency, developing the regulation and promotion of industrial estates and technology zones in the Kingdom of Saudi Arabia (KSA) on both public and private industrial lands, and to encourage the private sector to become involved in the development, operation, and maintenance of industrial estates and technology zones.

a. Role and Functions of MODON
The overall role of MODON is as the new planning and regulatory authority for specified industrial estates and technology zones in KSA, as outlived in the MODON bylaws:
“The main purpose of MODON is planning of specified Industrial Estates in the Kingdom and encourages establishment, management, maintenance, operation and supervision of these estates.”
“Specified Industrial Estates” refer to the existing stock of government-owned industrial estates and technology zones), together with private land, which were hitherto under the Ministry of Commerce & Industry has been entrusted MODON.

b. Key Functions of MODON
* Acquisition of land for development into industrial estates;
* Maintenance of new and existing industrial estates;
* Issuing of licenses to developers for the development of specified industrial estates on public and privately owned land;
* Issuing of licenses to operators of specified industrial estates on public and privately owned land;
* Development of a strategy to finance new projects through disposal of existing assets or other means;
* Actively engage the private sector in investigating and developing MODON lands into Industrial Estates;
* Creation of new technology zones.

II. Describing Technology Zones In The Kingdom Of Saudi Arabia

MODON bylaw defines technology zones as:
Lands and locations designated for the scientific technology clusters that provide infrastructure and additional services required to form a scientific technology environment encouraging invention, innovation and creativity in various fields to foster the development of vital knowledge intensive services and industries, business, and technology incubators and so forth.
MODON direct and indirect roles in establishing technology zones in the Kingdom of Saudi Arabia:

• Encouraging establishment of technology zones in the Kingdom of Saudi Arabia.
• Setting up required environment for establishing technology zones.
• Facilitating licensing procedures to develop and operate technology zones.
• Facilitating the setup of tenants residing the technology zones.
• Integrating technology zones and its tenants with MODON’ goals and objectives, national science and technology policy, national industrial strategy, and national development plans in the Kingdom.
• Coordination with the concerned agencies.

1- Form and Function of Technology Zones in KSA
Technology zones in KSA will take the form of high technology industrial parks, which shall cluster together production-research-development-commerce-consultation-education-training to create a cohesive knowledge based environment.

a. Functions of Technology Zones
The following functions will be carried out in the Technology Zones:
* Manufacturing and assembling high-technology products in targeted technological fields.
* Scientific research, research & development (R&D), laboratories and prototypes development.
* Commerce and businesses that deal with high-technology products and services in patent outputs.
* Consultancy services: Technical, business, and legal.
* Education and training: Technical, professional, and administrative.
* Technology Incubators.
* Supporting commercial services such as, restaurants, banks, post offices, internet cafes, hotels, etc.
Note: Mass production factories, warehouses, or temporary buildings will not be allowed in technology zones.
For a graphical description of what constitutes a technology zone, it is possible to describe it by the components that comprise it.
b. Tenants’/Lessees’ Performance Criteria in Technology Zones
Thefollowing criterion determines tenants’/lessees’ acceptance of MODON policies within the technology zones:
1. Tenants/lessee should provide high-technology and high value added products and services linked with research, development, and innovation.
2. Tenants/lessee should be engaged in activities related to the technological specialization of the zone (except those that provide consultation and commercial services).
3. Industrial and business tenants/lessees should fulfill at least the minimum R&D activity (funding or conducting) from its total operations.
c. Specialization of Technology Zones
Technology zones are classified by their technological/industrial specialization. Emphases are given to the specialization field of the tenants so that it matches the overall specialization of the technology zone. This specialization promotes the clustering of related enterprises in one area. Furthermore, specialization helps reduce the cost of construction, infrastructure, and services that are needed by the tenants. Clustering affect is proven to enhance technology transfer, cooperation, and integration between tenants in the technology zone. Examples of specialization fields of technology zones around the world include: Biotechnology, New Materials, Information and Communications technologies, Energy and Environment.

d. Infrastructure Specifications of Technology Zones
Each technology zone shall have its own infrastructure specifications (according to its specialization). Nevertheless, there are general specifications set by MODON such as nearness of the land to a city, development guidelines, building codes, environmental impact, and services needed.

e. Success Factors for a Technology Zone
* Human Factor: Availability of entrepreneurs, inventors, and consultants close to the Technology Zone.
* Organizational Factor: Presence of a capable management team in the Technology Zone, sound strategic plan, and proper technological/ industrial specialization for the Zone.
* Legislative Factor: 1) presence of incentives to develop and transfer technology, 2) easy and quick governmental procedures that motivate the formation of local knowledge-based enterprises, and helps in attracting local and international leading companies and individuals.
* Financial Factor: Accessibility of venture capital, seed capital, investment funds, lending funds, and R&D funds to entrepreneurs and inventors residing in the technology zone. Also, financing and incentives for investors to invest in the development of technology zones.

III. MODON Plans For Technology Zones

MODON is working on the development of regulations and standards necessary for the development and management of the technology zones by utilizing available resources, MODON is also seeking cooperation with the King Abdul Aziz City for Science and Technology (KACST) and Saudi universities to establish a strategic partnership to ensure the technology zones to achieve its objectives of national policy for science and technology in the following specialization areas which are strategic to Saudi's economy and national security:

• Energy
• Environment
• Water desalination
• Life Sciences and Biotechnology
• Information, Communications, and electronics
• Advanced Petrochemicals
• New Materials
• Knowledge intensive products and services for pilgrimage
• Knowledge intensive agriculture and production of dates

1- MODON Program for Technology Zones in KSA
MODON's program is to establish technology zones and incubators in different cities in the Kingdom of Saudi Arabia to serve the aforementioned strategic fields besides other fields that may be determined in future. Theoretically, it is preferred to construct technology zone for each targeted strategic field but it will be possible to consolidate some of the complementing fields in one zone. Thereof, seven projects are currently formed for MODON as part of its program for technology zones:
Project-1. Energy and Environment Technology Zone.
Project-2. Water Desalination Technology Zone.
Project-3. Life Sciences and Biotechnology Zone.
Project-4. Information and Communication Technology Zone.
Project-5. Advanced Petrochemicals and New Material Technology Zone.
Project-6. Pilgrimage (Hajj) and Omrah Technology Zone (for knowledge intensive products and services relating to Hajj and Omrah).
Project-7. Dates Technology Zone (for knowledge intensive agriculture and production of dates).

2- Mechanisms for Implementation of Technology Zone Projects in KSA

a. Phased Development of Technology Zones
The technology zone area normally varies between 100,000 to 10,000,000 square meters (sqm). As an industrial estate, any technology zone can be constructed in phases. To start construction of a technology zone in KSA in an economical way, the first phase should be developed and promoted. The feasibility study of the whole project must also be studied through the implementation of this phase. For example, when the construction of a 500,000 m² area technology zone is initiated, an area of 200,000 m² can be developed as the first phase consisting of Central Services Building, Small/Medium size Enterprises Building, and leased/rented to prospective tenants/lessee. In addition attention should be paid to the development of infrastructure such as roads, civil work, electricity, telecommunication network, landscaping, etc. When the first phase is fully occupied by tenants/lessee then the second phase shall be implemented.

The Central Services Building (Building-1) to consist of three floors as follows:
First floor: Auditorium, reception lounge (wide enough to hold exhibitions), training rooms, dining hall and information center.
Second floor: Offices and incubator facilities
Third floor: Offices for Technology Zone Management and Central Services.
The Small/Medium size Enterprises Building (Building-2) consists of offices with flexible areas, and an open laboratory (or a prototype development center). The laboratory (or center) serves all the tenants in this building for free.
The master plan of the technology zone must consist of five integrated sections (sub-zones) as follows:

1. One section designated for R&D facilities and laboratories in which lands are rented for relatively low prices by developer/operator.
2. One section designated for high-technology industries in which lands are rented for relatively low prices by developer/operator.
3. One section designated for business and commerce in which lands or offices are rented at market prices by developer/operator.
4. One section designated for higher education in which lands are rented for relatively medium prices by developer/operator.
5. One section designated for central services (Central Services Building, and the SME Building) to be under MODON management. Offices located in these buildings are rented with relatively low prices by MODON.

b. Development Steps of Technology Zones
In accordance with the set rules by MODON, the private sector can participate in the development and operation of a technology zone. Toward this direction, the following steps are adhered:
Step 1: MODON shall study and identify a suitable land to be a prospective technology zone and shall acquire its legal status (either from the government or private lands).
Step 2: MODON shall officially invite competitors to bid for the development of a technology zone through a BOT request for proposal. In case of an official agreement between the owner of the land and a developer, MODON role will be limited to providing the investor with the required technical information including location and size of land, development guidelines, building codes, and terms and conditions of license.
Step 3: The competing developing entities shall submit technical proposal including development of plan, detailed engineering drawing for lands, buildings and infrastructure in the technology zone. An approved engineering office shall review the technical proposal. In addition, development entities shall submit a proposal reflecting financial aspects to meet the development costs, yields and revenue of different sites in the zone.
Step 4: Based on the soundness of the proposal (both technical and financial), MODON shall grant the prospective developer/operator a license to develop/operate a technology zone. The licensed developer/operator must commence construction work within two years of receiving the license. MODON, in case of its lands, shall sign a development contract with the developer/operator and collect 20% from the total revenue from the developer/operator. A supervision contract shall be entered into between MODON and the owner if the land belongs to a private entity. Under this contract, MODON shall supervise the licensed developer/operator the management of the technology zone and collect annual fee from the owner.
Step 5: During the two-years period, the licensed developer/operator shall make his efforts to market sites in the first phase of the master plan to potential customers so as to solicit early commitments to rent /lease specific sites.
Step 6: After successfully marketing the first phase of development and obtaining commitments from tenants/lessees, the licensed developer/operator shall commence the construction of the first phase of the technology zone.
Step 7: In accordance with the bylaws, MODON shall supervise the performance of the developer/operator and tenants/lessees of technology zone to ensure the compliance with the stipulated terms and conditions of license.
When the first phase is fully occupied by tenants/lessees, the approved developer/operator shall commence the second phase of development of the technology zone.

c. Financing the Development of Technology Zones
In Saudi Arabia, financing technology zones could come from various sources:

1. Saudi Industrial Development Fund offers 50% loan for the developer of a technology zones who is licensed by MODON.
2. Local Banks
3. Foreign Investors interested in technology zone development projects (MODON has a list of international entities which expressed their interest in developing a technology zone in Saudi Arabia).

MODON will work diligently with all the parties involved and provide all the information needed for successful development and operation of technology zones to make them successful economic endeavors.

Recommended allocation of land in the first phase

• Building 1: Central Services Building including an incubator (3000 m²)
• Building 2: SME building (3000 m²)
• Higher Education (18% of land)
• R&D centers and Laboratories (12% of land)
• High-Tech Manufacturing (50% of land)
• Business and commercial (20% of land)

Director General of MODON

Dr. Tawfig Alrabiah is occupying the position of Director General Saudi Industrial Property Authority (MODON) since April, 2007. In the month of April 2010, he was entrusted to work as Deputy Minister for the Ministry of Commerce & Industry and Supervisor for the National Industrial Strategy. Since he undertook this post at MODON, a lot of achievements have been realized namely: launching of new industrial cities development, expansion of some existing cities and re-establishing some cities. These developments and expansions resulted in 80% growth in the industrial area in comparison with what had been developed for the last 40 year. In addition, he led the privatization of water services, central cooling services and residential accommodations. Furthermore, he led the development of telecommunications. He adopted the idea of building smart cities within the industrial cities by providing high-speed communication networks with smart services. Public services, commercial and governmental services in the industrial cities have also been improved. During his tenure, MODON has achieved a qualitative improvement in the services provided and in the amount of industrial lands allocation.

Dr. Tawfig Alrabiah has contributed in the establishment and development of a group of manufacturing

Manufacturing

Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...

 companies and businesses in the Kingdom. Dr. Alrabiah worked as Director General of the Information and Communications Technology sector at the Saudi Arabian General Investment Authority (SAGIA) where he played a distinguished role in attracting huge international investments in this field. He has also worked on the development of the national IT plan, and co-authored the Saudi National IT Plan vision document which formed the basis for developing the Saudi National IT plan. He also worked as a board member of the Saudi National IT Plan Council, faculty member at King Saud University, board member of the Saudi Computer Society and a teaching fellow at the University of Pittsburgh.

Dr. Alrabiah holds a Ph.D. in Computer Science from the University of Pittsburgh, M.S. in Computer Science and another M.S. degree in Information Science, a bachelor's degree in Financial Management and Mathematics from the College of Business Administration, King Saud University. He has published more than 16 papers in refereed international journals and conferences, and co-authored a book on high speed networks. He has written many articles in different local newspapers related to e-government, e-commerce, telecom

Telecommunication

Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...

 and has participated in different discussion panels. Dr. Alrabiah worked as consultant for a number of government

Government

Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

 and private

Private sector

In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

organizations.

Dr. Tawfiq Alrabiah works as a member of the Board of Directors in the following organizations:

• Saudi Industrial Property Authority (Vice-Chairman of the Board and Chairman of the Executive Committee)
• Royal Commission for Jubail and Yanbu
• Saudi Arabian General Investment Authority (SAGIA)
• Saudi Railways Organization
• Human Resources Development Fund
• Saudi Industrial Development Fund
• Industrial clusters program
• Gulf Organization for Industrial Consulting
• Badir Information and Communication Technology.