Tales from the Blue City

By Ben Thompson, Senior Editor

Richard Russell, CEO of Blue City Company 1 – the firm behind Phase One of the Al Madina A’Zarqa development – explains how Oman’s flagship city planning project is back on schedule after a challenging 12 months.

“Our vision is to endorse the culture and heritage of Oman and couple it with contemporary facilities”
-Richard Russell

Ask someone to name a Gulf-based megaproject development and the chances are high that their first instinct will be to namecheck one of the high-profile projects in the United Arab Emirates or Saudi Arabia – King Abdullah Economic City, for example, the sprawling Dubailand or even Abu Dhabi’s Masdar. Yet while these developments are undoubtedly grabbing most of the headlines, something equally staggering in scale is taking place in Oman, on a natural peninsula about an hour up the coast from Muscat.

Al Madina A’Zarqa (literally, the Blue City) is a waterfront city being built along 16km of shoreline adjacent to the Gulf of Oman. When completed, the 32 square kilometre city – which represents a total investment of between US$15-20 billion – will be home to 200,000 people, with some envisaging it as the country’s future commercial capital. Only Dubai’s Waterfront development is bigger.

It’s all part of His Majesty Sultan Qaboos bin Said’s Vision 2020 project – a mission to diversify Oman from its dependency on revenue from fossil fuels – and at its heart is the expansion of the country’s tourism industry. However, Al Madina A’Zarqa is ultimately intended to be much more than a tourist resort. It will serve as a growth engine for the Omani economy and generate large-scale employment opportunities for Omani nationals, promote property ownership for nationals and expatriates alike and serve as a hub for leisure activities in the sultanate. Freehold ownership laws are already in place and the Oman government was the first of the Gulf countries to bring clarity and transparency to property ownership legislation. The city will have civic and education clusters, as well as a utilities belt on the south of the city, and seeks to grow on the back of six economic drivers: tourism, entertainment, education, medicine and healthcare, sports and wellness, and trade.

The man charged with delivering the project is Blue City Chief Executive Officer Richard Russell. An 18-year veteran of Gulf real estate, Russell has previously been involved in several of the more dramatic property developments in the region, among them Saadiyat Island in Abu Dhabi, the Palm Jumeirah in Dubai, and Qatar’s Pearl Development. In this exclusive interview with MENA Infrastructure, he explains how the first phase is on track for completion by December 2012.

INFRA. The travel and tourism industry in Oman is expected to witness spectacular growth over the next few years. Why is the country such an attractive destination, and what factors are behind the expected rise in tourist numbers?
Richard Russell. Oman is often called the ‘true Arabia’ and exudes rich heritage and culture dating back to 4000 BC. It has beautiful natural and unspoiled beaches, and a stunning contrast between its mountains, wadis and beaches. Added to this is the fact that tourism infrastructure is being developed fast, with Oman Air dramatically expanding their destinations to different places around the world, and numerous 5-star hotels being constructed throughout the country. The Ministry of Tourism actively promotes the country abroad through international exhibitions and other promotions, and in addition Oman welcomes a lot of foreign investment due to its stable political and financial climate. This makes it a very attractive destination.

INFRA. How does Al Madina A’Zarqa hope to help meet the needs of – and indeed drive – this increase in tourism?
RR. The primary goal of the development of Al Madina A’Zarqa is to help in the diversification of the Sultanate’s economy away from fossil fuel. Tourism is an integrated part of the development. This fully integrated city will have 20 hotels, golf courses, a university, entertainment facilities and hospitals, among many other things. The city is expected to have more than 200,000 residents and this will include 10,000 university students.

The development has a number of elements that make it an attractive destination for tourists of all types. Al Madina A’Zarqa has 100 percent freehold ownership laws and inheritance laws based on the country of origin of the buyer. It includes facilities such as education and healthcare that position the city as an international education and medical tourism destination to complement the other tourism elements of the city (such as theme parks, an aquarium, a culture center, museums, etc.). Finally, it will also include vocational training facilities, such as a hospitality academy, that will help it to achieve high quality and customer service standards that will be maintained throughout the city’s facilities.  

INFRA. I understand that the city will be much more than just a tourism centre. What is your vision for the city, and what other types of investment do you hope to attract? Can it become an economic hub in its own right?
RR. Our vision is to endorse the culture and heritage of Oman and couple it with contemporary facilities. The plan is to provide a completely sustainable new city focused on the six economic drivers of tourism, trade, entertainment, medicine and healthcare, sports and wellness, and education. Each one of these elements will create an economy of its own and will position the city as an international hub.

INFRA. Can you please update us on progress to date? What stage is the development at? What recent milestones have you achieved on the project? And when do you expect to complete?
RR. Construction is moving fast and is on schedule. We are already building the first hotel (Anantara Resorts and Spa), and the first 400 apartments and first 200 villas will be completed by the end of 2010. Recently, Blue City Company 1, the company tasked to deliver the first phase of Al Madina A’Zarqa, awarded AECO for achieving four million man-hours without Lost Time Injury (LTI).

We recently appointed Thomson, Perett and Lobb as the designer for the first 18-hole golf course in Phase 1, and are almost ready to announce the second hotel operator in Phase 1, which will be an internationally renowned five-star brand. We are also currently in negotiations for the operator of the shopping mall in Phase 1.

INFRA. The masterplan recently underwent a redesign by Foster + Partners. What were the business reasons behind this decision, and what impact has the redesign had on project costs and schedules? Why is the new design a better proposition?
RR. In reality, the Master Plan re-design was completed over a year ago and is inspired by traditional Omani architecture but expressed in a contemporary way. Although the re-design effort delayed the start of the project, the planned completion remains unchanged. The new plan provides for a more efficient land use and reduces associated infrastructure construction costs dramatically.

INFRA. And what impact has the global economic downturn had on the development?
RR. While it is true that there is a global economic downturn, for Oman, the risks to the economy and financial system appear to be manageable. Current indicators suggest that the Omani national economy will be able to weather this downturn and that there will not be a significant impact on the performance of the sultanate’s overall economy. According to a recent Moody’s report, the sultanate’s economy is stable and it is expected to remain so in the future. The current statistics indicate an overall GDP growth of 13 percent at fixed rate and 44 percent at current rate compared to 2007. Furthermore, the Ministry of the National Economy is reporting that the growth of liquidity and credit rates remained highly positive in the latter half of 2008 and the first quarter of 2009. The positive forecast for Oman is due to the fact that it maintains prudent fiscal policies, has a steady political environment and an excellent relationship with other countries.

We’re confident that Al Madina A’Zarqa will continue to witness high demand, both in Oman and across the region. The project’s proposition is very different to that of other developments, in terms of scale, scope and product offering. These factors continue to attract discerning investors. Put simply, what we are talking about here is much more than just another real estate development: Al Madina A’Zarqa offers a unique investment opportunity, distinct from other projects.

INFRA. What was the inspiration behind the city? Did you look at other developments and incorporate certain elements and best practices from elsewhere when putting the masterplan together?
RR. We aimed to develop a city that is inspired by its Omani past and interpreted in a contemporary way – a city for the future that will take Oman into the international arena. Al Madina A’Zarqa will incorporate existing best practices and include innovative propositions that will make it a truly sustainable development.

INFRA. How are you building sustainability and greener thinking into the design of the city, and how important is this for your development?
RR. Al Madina A’Zarqa is committed to ensuring the environment is protected and nurtured throughout the construction phases and beyond. The 16-kilometre coastline of the project will not be altered in any way that affects the natural environment. Environmental impact surveys have already been conducted by a number of international consultants in conjunction with local authorities, and Al Madina A’Zarqa is using the findings to guide how the city is being built and how it interacts with – and even enhances – the local environment.

A guiding principle for the city and its agents is to ensure that any activity creates as small an environmental impact as is viably possible. This principle will continue as the city expands and more people begin to live, work and visit the city and its amenities, carrying on the harmonious relationship Omanis have always had with their natural environment. In addition, where viable, Al Madina A’Zarqa will commission contractors that employ sustainable building practices and materials.

It is the rich cultural heritage that makes Oman such a unique and enchanting place, therefore it is imperative that this be maintained.

Blue City in numbers
Area: 32 km2
Coastline: 16km
Population: Estimated 200000
Employment: Estimated 120000 jobs
Total investment: Estimated $15-20 billion
Phases: 12
Completion: Estimated 12-15 years
Owner: Al Sawadi Investment & Tourism (ASIT)
Masterplan: Foster + Partners
Hotels: Estimated 20
University: Estimated 10000

The masterplan
The masterplan comprises a series of clustered communities with private courtyards and narrow, winding streets that fuse seamlessly with an efficient transport and road network extending across the site. A contained city, there will be schools, a university, stadia, golf facilities, a concert hall, marina, hotels, health facilities, souks, as well as further retail and amenities serving the individual communities.

The beaches will be improved to the highest resort standards and the creek (or Al Khor) extended, with hotels, restaurants and a pedestrian route concentrated along the waterfront. A further network of shaded, pleasant pedestrian routes continues throughout the site, while the wider roads are characterised by a careful balance between pedestrians, cars and public transport.

Each residential community will have its own identity. The apartment buildings will offer residents their own private courtyard and discreet car parking. The material palette will comprise locally sourced stone and timber. Borrowing from the indigenous architectural heritage, the design is small scale, compact and organic. It is inherently sustainable through passive means, such as natural ventilation, careful orientation – to minimise direct sunlight and maximise ventilation – and the manipulation of the thermal mass of the buildings.

The communities have a layered concentric structure, with each layer becoming more private and intimate as it retreats to the heart of the residences – respecting Omani traditions of privacy and an internalised architecture as seen on the Omani heritage settlements of Bahla and Manah. Designed to appeal to a diverse social mix, the residences will combine a variety of different scales and types.

Phase One
The first phase of the project is primarily a residential and tourism development with leisure and retail components targeted at the high-end market segment. It represents a substantial standalone project in its own right but it is also intended to fit as a component of the overall development. It will be built over an area totalling 5.5 square kilometres.

Phase one of the project comprises of residences designed by Foster and Partners, one of the world's leading architectural design and consulting firms; luxury hotels; an 18-hole golf course; marina; natural parkland and extensive tourism and recreational facilities. With phase one due for completion in 2012, Al Madina A'Zarqa has attracted huge interest. The successful initial sales launch of 400 residential homes saw the project’s owners recently reach out to Qatar and the UAE with sales launches in Doha and Abu Dhabi.