Cablegate: Jordan's Unused Industrial Capacity

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS AMMAN 006288

SIPDIS

DEPT PASS USTR FOR NED SAUMS

E.O. 12958: N/A
TAGS: ECON EINV EAID IS JO
SUBJECT: JORDAN'S UNUSED INDUSTRIAL CAPACITY

REF: A. TEL AVIV 5395

B. WERTHEIMER - D LETTER OF 21 OCTOBER 2002
C. WERTHEIMER - NSA RICE LETTER OF 20 OCTOBER 2002

1. (u) Summary: We have been following with interest
attempts by Israeli industrialist Stef Wertheimer to secure
support for a new industrial park (or parks) in Jordan.
While there does not seem to be a need for new industrial
parks in Jordan given a current glut of unused industrial
infrastructure, there are aspects of the ideas that might fit
in well with growth plans in existing industrial parks in
Jordan, including in Aqaba. We would welcome the opportunity
to discuss these plans with Mr. Wertheimer. End summary.

2. (u) We have heard for several months about Israeli
industrialist Stef Wertheimer's interest in new industrial
development schemes for Jordan in support of building
economic ties between Israel and Jordan. While Ref A
expanded on some of these plans, we have not yet seen the
details of the plans or talked directly with Mr. Wertheimer,
so it is difficult to gauge the suitability of his plans to
Jordan's current investment environment. However, we thought
it would be useful to outline the lay of the land regarding
Jordan's industrial infrastructure.

3. (u) Land already allocated or earmarked for industrial
use in Jordan is massively underutilized. The USAID-funded
AMIR project undertook a study in April 2002 to detail market
demand in government-owned industrial estates in Irbid, Amman
and Aqaba. Among the report's findings was a projection that
existing and planned infrastructure was sufficient to meet
all new demand for space from potential investors through at
least 2007. The study, undertaken at the behest of the GOJ,
recommended that no further industrial estates be developed.

4. (u) A similar study undertaken by a private-sector QIZ
developer discovered that, in the ten currently approved QIZ
sites, 5.5% of aggregate available space is occupied, leaving
94.5% (or roughly 4,000 acres) available for development.
Most of this land is in parks for which industrial
infrastructure is already in place, including Al Hassan in
Irbid, Al Dulayl in Zarqa, Al Tajammouat in Amman, Hussein
bin Abdullah City in Kerak, the Gateway QIZ in the Jordan
Valley, and the Aqaba International Industrial Estate. This
study was undertaken at the developer's own initiative, to
argue against the GOJ approving additional QIZ designations
for undeveloped land, and thus should not be viewed
uncritically. That said, the numbers track closely with
anecdotal evidence - for instance, there are only two
factories operating in the massive Kerak QIZ and in the even
larger Cybercity project in Irbid, and Al Dulayl estimates
84% of its own land is still available for investment.

5. (u) The land that has been allocated/occupied is already
well developed from an industrial infrastructure standpoint.
Government-owned parks in Sahab and Kerak are fully served
with roads, electricity, water, sewage, communications,
firefighting/civil defense, banks, etc. Private sector-owned
parks in Al Dulayl and Al Tajammouat are similarly fully
developed, and private-sector parks at the Gateway site, in
Aqaba, and in Irbid's Cybercity development are further
outfitted for ITC-type businesses. The Aqaba site in
particular benefits from the services of a development
management team from Parsons-Brinkerhoff, and is supplemented
by support in the Aqaba Special Economic Zone from master
developer Bechtel.

6. (u) Viewed in this context, proposals for building new
industrial parks in Jordan would not seem useful from the
Jordanian perspective. However, developers would probably
welcome additional investment in existing parks. Part of the
Wertheimer proposal as outlined refs a and b included
training centers for hi-tech jobs and continuing education
for local workers. These sorts of schemes would probably be
very well received by existing industrial parks, particularly
those like Gateway and Cybercity that hope to focus on
innovative, creative business development like that promoted
by Wertheimer. In addition, Wertheimer's stated ability to
bring major multinationals into the picture would be welcomed
by all current industrial park managers. Thus JV
partnerships, fee-for-training schemes, or similar
arrangements seem more appropriate investments of capital and
expertise than building new parks out of whole cloth, given
the current glut of unused industrial infrastructure in
Jordan. The Mission would welcome the opportunity to discuss
such options, including in the Aqaba International Industrial
Estate, with Mr. Wertheimer or his representatives at
his/their convenience.
GNEHM

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