The Striking success of the world-scale Sabic manufacturing affiliates in Jubail and Yanbu is a result of prudent corporate planning on the part of the Corporation and the foresight of the Saudi government.

When the Royal Commission for Jubail and Yanbu was formed in 1975 with the aim of providing the necessary industrial infrastructure to the fledgling sites, even the most optimistic of planners would have been hard pushed to predict what Jubail and Yanbu would become.

Early feasibility studies had identified large tracts of undeveloped land near the historic communities of Jubail and Yanbu Al Bahr for industrial development. Both sites had good access to shipping lanes and could accommodate deepwater port complexes.

Providing early industrial infrastructure to the sites, the Royal Commission then sought to develop a system to gather and process associated gas, and deliver it, with crude oil, to Jubail and Yanbu to fuel existing industry and stimulate new ventures.

Today, this same Master Gas System is a prime factor influencing the expansion of Sabic manufacturing plants, and the construction of new facilities for both Sabic and private investors.

The decision to form Sabic in 1976, also an early goal of the Royal Commission, sought to reap the economic benefits of petroleum-based industries to produce fuels, petrochemicals and other feedstocks which would add value to crude oil and gas and expand Saudi manufacturing and export opportunities.

The plan was to, in turn, reduce the country's dependence on crude oil exports and help diversify the economy.

The formation of Sabic was also seen as an opportunity to increase national revenues and lead to import substitution and self-sufficiency in certain manufacturing areas.

Today, the Sabic affiliates depend on the Royal Commission for infrastructure provision, from utilities to the planning of residential communities.

And as Sabic manufacturing affiliates expand, so the provision of services will also rise.

An estimated $20 billion has already been spent on infrastructure and services in Jubail and Yanbu since they were established as industrial centres. Additional investment will be required, particularly for the country's utilities and transport systems.

Demand for electricity in the Kingdom is growing at an estimated 5.5 per cent per year, and to meet this experts predict that the Saudi government will have to spend around $117 million on trebling its installed power generating capacity to 69,000 MW by 2020, in addition to necessary transmission and distribution facilities.

Increased industrial water use - for cooling purposes for instance - will require an estimated two million cu m per day of desalination capacity to be added over the next decade to the present 5.4 million cu m per day capacity.

The Royal Commission has set up a new $666 million public utility company, a joint venture between the Royal Commission, Sabic, the Public Investment Fund and state oil company Saudi Aramco (24.77 per cent share each), with the remaining share held by other investors in Jubail and Yanbu.

This company was formed primarily to reduce the Royal Commission's dependence on government support in the provision of infrastructure.