Without doubt The Red Sea Project is one of the most ambitious projects currently underway in the region and quite possibly one of the most challenging in the world.
It is almost as if building a resort that covers an area the size of Belgium wasn’t impressive enough: This is a tourist destination so big it requires a town with a population of 12,000 to keep it running. It is also striving to achieve its own Net Zero targets while setting world-class benchmarks for safe, smart, sustainable journeys to, within and from the resort.
Backed by the almost limitless resources of the Saudi government’s Public Investment Fund, and with nothing off the table when it comes to achieving 100% renewable sources for vehicles and power – including hydrogen-powered aircraft, electric vehicles, decarbonised boats – you would think Red Sea Global’s (formally known as The Red Sea Development Company) operations team have their pick of collaborators for the mega-development.
But even as Saudi Arabia’s flagship tourist destination nears its phase one opening in 2023, Anton Bawab, Group Head of Operations and Operations Executive Director Andreas T Flourou tell T&FME that they have often been left frustrated by their dealings with the automotive sector. Early into the interview, Bawab, exhales his dismay at many OEMs failing to take the project seriously.
“I think one of the messages from our conversation has to be where are you?” He calls out.
It is not difficult to understand the Operations team’s frustration. The Gulf region has seen many pilot schemes and trials in the UAE, Qatar and Saudi Arabia itself of the many of solutions they need on the project, such as compressed natural gas buses that could be used to ferry staff or the electric luxury cars to carry guests from point A-to-B. CNG-fuelled luxury buses have even been planned in Doha for the FIFA World Cup for almost a decade. Why then have they struggled to get the vehicles they need?
For a start, it is certainly an intimidating project even for two veterans such as Flourou and Bawab.
“It hit me hard the first time I had to drive around myself,” says Bawab. “The distances between any two points or anywhere between 20 and 45 km. It is a massive site with a massive footprint, but our approach to the environment is unwavering and our aspiration is to get to a fleet fully powered by renewable energy, even if we realise that the transportation technology is not going to help us 100% – nobody has ever put something as multi-modal and comprehensive in one go. ”
He continues: “We are looking at marine, looking at land mass transit and individual transit, we’re looking at air – commercial helicopters and seaplanes. And on the marine side we’re looking at logistics and passenger and pleasure.”
Beyond the shopping list of vehicles, there is also the traffic infrastructure, the security
needs, the building of logistics hubs to keep the remote destination going.
“If you break our project down into small pieces, none of it has ever been done. You can find solar farms, you can find electric fleet but it’s the collection of the parts that makes it the challenge that it is, and it’s making it the ambition that it is…Nobody has ever built a fully integrated resort powered with renewable energy from A to Z. We are talking guest and staff mobility, staff housing, climate control in a harsh environment. And we are talking 24-hour operation, including a desalination plant.”
Flourou adds: “And don’t forget the logistics of all this as well.”
The first hotel guests are expected to arrive by the middle of 2023 (the first hotel will hand over at the end of Q1 2023), explains Bawab. This will be a major landmark for the operation with transport priorities being shared between the construction teams working on the next phases and the shuttle services for the guests and hospitality crews needed around the resort.
“I don’t want to use the term mock opening, but that’s when we will start stress-testing the system. We will have got staff transportation in place three months before, but then we will need guest transportation in place,” says Bawab. “We’ve also got to have marine and land logistics in place, we have got to have our supply chain figured out all the way from Jeddah and an interim supply chain and logistics warehousing,” he says, adding “We also need interim mobility workshops and repair shops on site because as we start gearing up to open up, we will also transition from being a construction site to being a resort with construction on-going on the site.”
Ideally, The Red Sea Project would have been prioritised by the automotive industry and partners in The Kingdom in the lead up to the opening, but it has not been able to avoid the disruption seen in the market over the past couple of years. While Mott McDonald was appointed at the end of 2019 to scope out the transport and fleet needs for the resort, the number of vehicles joining its fleet has been held back by the supply chain issues that have impacted the global market.
“We’ve been blessed by a couple of crises and we’re not unique in suffering from supply chain issues,” says Bawab mixing ruefullness with a touch of sarcasm. “We’re not unique in suffering the car shortage issues that plague the world. So, sadly, we’re not getting our vehicles as quickly as we wanted to have them, and we are not getting the models that we wanted.”
There is, however, good news when it comes to site access now that 100km-plus of roads have been completed across the resort: “As soon as we can satisfy our guests needs and employee needs we will start transitioning our construction teams to hybrids or EVs to go to work. We don’t need the V8 gas guzzlers as we are not roughing it up anymore – although if you are on one of the desert sites you will still need your traditional car.”
In total, 16 hotels, a marina, golf course and residential complexes are expected to be completed by the end of 2024. And all of them will need to be supported by a massive – and green – logistics operation.
“We are sizing our distribution centre and to serve our guests and the 8,000 hotel employees and the 4,000 support employees, and the landscapers, and the road sweepers, and airport staff in place, we’re building a 55,000 square metre logistics centre. That’s the size of a major retailer’s medium-sized warehouse.”
According to Flourou, most guests will arrive at the newly built airport, travelling overland and there are typically three options for them to get to their destination: “Guests will be able to use our electric vehicles, to get to and from the hotel; this will be a shuttle service/transfer service where they can pick up a car to them to their destination and these are electric. The island destinations require a second or third mode of operation. So, we have in the first instance, a fleet of amphibious aircraft that will take off from our airports and on the water and vice versa.
“Now, interestingly, there are seaplanes running on conventional jet fuel today, however, we are working with Zeroavia in the UK and signed an MoU exploring their electric hydrogen hybrid systems for aircraft engines. The third option is getting to the island by a boat. So again, we’ve gone out to market, we mandated a yacht designer to design a stunningly beautiful 18m commuter vessel – a baby super yacht.” A baby super yacht?
“Imagine a Mercedes EQS or a Lucid Air…let’s put it this way, it’s luxury water taxi!” Flourou enthuses. “We have various solutions available to us in terms of power such as biodiesel. This is an option as that is available to us via our logistics fleet, plus that can also power all our standby generators in case anything happens to our solar power. We also have an electric hybrid system – we plug in, charge up batteries and power vessels that way. Where we will end up (eventually) will be hydrogen hybrid or hydrogen electric power system.”
Expanding on the potential for hydrogen at the development, Flourou is clearly an advocate for the technology.
“You have a couple of different options. You can have a tank filled with hydrogen, which I think most people are aware of. But, there is also hydrogen combustion, which is similar to what you see today in ICE systems and will allow an engine to burn hydrogen, combust hydrogen, to power a motor. So all of these things we are we are working on.
“But there are challenges with absolutely everything, you know. Electric car manufacturers globally are facing supply chain issues. (We touched on this earlier) but this has been ongoing for a while, and now you have the terrible ongoing war in Ukraine impacting other elements such as the supply chain. You know with semiconductors, we are coming up to two years in and we still have a shortage. Someone said to me recently there is a shortage of a particular foam that manufacturers are using for car seats. You try to mitigate all of the risk but you can only mitigate so much.”
Does the delay, also mean higher costs to worry about, even for an organisation with such a wealthy backer? T&FME asks
“We are a commercial operation, we want to keep an eye on the bottom line. Ultimately, we want to mininise cost because, unfortunately, it will have to get passed onto the end-user. We want to be competitive in the tourism industry. And despite the fact that it is ultra-high net-worth clients and guests – and the service will be genuinely something that hasn’t been seen before – you want to be competitive.
“But all of these issues from a mobility standpoint, cause challenges for us. I think, it’s also very difficult to attract many of these manufacturers and OEMs into a region that they have no interest in today? I’m not going to name names, but, you know, take a few of the German players, why would they want to look at Saudi Arabia or the Middle East today when they can sell absolutely everything in the US and Europe?
Bawab adds: “Clearly we are way behind in legislating are transfer to Green. We are not as attractive, lucrative, or as big as a market as some of the more mature economies out there because they have got government legislation which encourages – by their use of tools like taxation – vehicle ownership. And of course, up until a couple of years ago, a litre of fuel was cheaper than a litre of drinking water.
“They are making commitments…we are in talks with Aramco for sustainable air fuel, for instance. So, there is now direction. Coupled with PiF’s massive investment in things like Lucid Air, you can see there is movement. It just won’t happen before we open.”
Looking further ahead, Flourou adds that the long term prospects are much more positive, with the Saudi Vision 2030 programme baking in diversification in the economy and the growth of sectors like tourism.
“Tourism is key but so is regeneration which Red Sea and (sister project) Amaala are working on. We’ve planted our flag into sustainability but now we need buy-in from all these OEMs and manufacturers to come into the market and be a part of it,” he comments, adding that mandating electric vehicles and other forms of mobility would be a positive step for the Kingdom to take.
“As a giga-project, we are testing these things for the whole country. It will be interesting to see how that works and how it can shift how the public think.”