We caught up with John Pagano, CEO of The Red Sea Development Company, to discuss progress made on the luxury regenerative tourism project being developed on the west coast of Saudi Arabia.
Tell us about your leadership style, values, experience and vision behind leading the team on this historic development from the ground up?
I have more than 35 years of extensive international experience in developing and managing visionary, transformative projects. I spent more than 23 years at Canary Wharf in London, 15 as Managing Director, and over four years as President of Baha Mar Development Company based in Nassau, The Bahamas. Both projects had a significant impact in their respective regions, elevating their status in the global arena. I feel privileged to have now the opportunity to lead an even larger, paradigmatic project.
When I first came to Saudi Arabia, I recognised that the nation was going through an incredible transformation that continues today.
I was taken by the project’s vision and ambition and, most importantly, by the opportunity to be part of something I knew would break new ground in the region and globally.
My first thoughts were about the destination’s natural beauty and the responsibility that comes with the opportunity to conserve and enhance it for future generations.
Working on a project that is redefining luxury travel on a greenfield sustainable development, is a once in a lifetime opportunity.
I want to ensure that everyone involved in the project, staff and partners, knows that they are part of something far bigger than building a tourism destination. They are part of the historical transformation of a country that will have a global impact. I feel proud to say that at The Red Sea Development Company we are united by shared values to lead the new global tourism industry. As we do so, we set new standards in sustainable and regenerative development both at home and abroad.
For anyone unfamiliar with The Red Sea Development Company, give us an introduction to the organisation and the project underway on the Red Sea coast of Saudi Arabia.
The Red Sea Development Company is the developer behind one of the most ambitious regenerative tourism projects in the world, The Red Sea Project, which spans 28,000 square kilometers on the west coast of Saudi Arabia today. The project features an archipelago of more than 90 untouched islands, dormant volcanoes, mountains and canyons, sweeping desert dunes, 200 kilometers of coastline, and natural treasures such as some of the world’s best coral reefs. The Red Sea Project will deliver a new level of service excellence by offering immersive transformative guest experiences underpinned by sustainability, luxury, regeneration, and above all, care.
To be completed by 2023, phase one of the project will include 16 hotels across five islands and two inland resorts, a marina, leisure and lifestyle amenities, and a dedicated international airport. Designed by world-renowned architects Foster + Partners, the airport will provide a next-generation smart experience through innovative design and cutting-edge technology, creating exquisite travel experiences and making the project easily accessible. The first elements of this phase will be complete by the end of 2022, at which point we will begin welcoming our first guests, and upon completion of the entire project in 2030, the destination will boast 50 hotels and 8,000 hotel keys and thousands of residential units.
The Red Sea Project is an instrumental giga-project to support HRH Crown Prince Mohammed bin Salman’s Vision 2030 – an effort to diversify the kingdom’s economy and transform its socio-economic landscape. The project will be a major contributor to the rapidly expanding tourism sector, considered a key pillar in the delivery of Vision 2030.
We expect to create more than 35,000 job opportunities directly and a further 35,000 as indirect and induced jobs through various growth opportunities for local businesses and entrepreneurs.
We are committed to impacting the economy long term, creating a national reservoir of knowledge and expertise. For us, knowledge transfer is essential for the socio-economic sustainability of the tourist industry in Saudi Arabia. We have developed several education and training programs and research projects with universities and schools to turn Saudi Arabia into a leader in the global tourist industry. We are driven by safety, sustainability and the will to protect and enhance cultural and natural heritage.
TRSDC is leading by example, creating new innovative standards beyond what is today called sustainability.
2020 has been a challenging year for businesses around the globe – what progress has been made on the project and is it still on track?
Despite the challenges of the Covid-19 pandemic, we have made substantial progress and remain on target. We plan to welcome our first guests by the end of 2022. To date, the company has signed over 380 contracts, a commitment of over SAR 7 billion towards the destination’s completion. We expect this figure to be circa SAR 15 billion by the end of the year including our PPP utilities package. Work has already begun across a range of central elements at the destination, including the construction of the marine infrastructure, required to transport people and materials around the site, and the development of 77km of roads, highways and junctions that will connect the destination.
We are about to complete the Construction Village, a temporary residential complex to host 10,000 of our construction workers. The remaining 18,000 workers will live at the Coastal Village, which will remain a permanent facility at our destination.
A key milestone this year was the award of our largest contract to date. The agreement covers the development of the airside infrastructure works (runway, taxiways, aprons etc) for the destination’s airport, and it was awarded to an all-Saudi joint venture between Nesma and Partners and AlMabani.
Sustainability is a key pillar of the project – what does it mean to TRSDC?
Sustainability is a powerful force for positive change in our world, driving transformation, innovation and improvement across all aspects of society. Sustainable approaches to tourist destination development are essential but are currently quite short-sighted. Having a low environmental impact, or even none at all, is a given for us.
Naturally, we have aligned our approach with the 17 United Nations Sustainable Development Goals (SDGs) to ensure that we meet and exceed international standards. Therefore, we are committed to 100% renewable energy, a ban on single-use plastics, circular waste management, sustainable food production, green mobility, carbon neutrality through advanced carbon sequestration strategies, and low-impact construction methods.
To guarantee a low impact on the destination, we are developing only 22 islands out of the total 90, designating nine of them as special conservation zones. Some of the islands we left untouched, like Al Waqqadi would have been the perfect site for a luxury resort. But we realised that, no matter how careful we developed, our impact on its ecosystem would have been irremediably degenerating. That same criteria explains why we are developing only a small percentage of the total 28,000 km2.
Our drive is not purely commercial. We are here to make a difference, to send a message to the world that “sustainable” is not good enough. We need to do better so we chose regeneration. For us who work at The Red Sea Development Company, nature is our most valuable asset and our greatest inspiration. We are reconciling with nature to embrace the transformative potential of tourism. Therefore, nature-based solutions and sustainability are our guidelines from construction through to destination management and guest experiences. Our goal is not only to be sustainable and conserve the ecosystem, but to enhance it.
For us, a regenerative approach is at the core of everything we do. World-leading environmental scientists have been working alongside our developers from the moment we started thinking about this project, influencing every detail – from the planning and construction, to the development and long-term destination management strategy. In order to know how to start, we completed a marine spatial planning exercise, groundbreaking in its scale. The outcome was the design of a destination that will not only protect local natural diversity but actively increase biodiversity. Our master plan predicts a 30 percent net conservation benefit by 2040.
To meet this ambitious goal, we’re repopulating and expanding green and blue habitats, growing new coral, mangrove, seagrasses and native land vegetation, while investigating new approaches to carbon sequestration. We’re also applying modern, innovative construction techniques to minimise the human footprint at the destination, like the off-site construction of lightweight, energy-efficient architectural structures. They sort of wash up on the shores of the island, just like natural driftwood, in a way that they could eventually wash away again if that was desired later.
At The Red Sea Development Company, our aim is to become a global reference for eco-tourism, sustainable development, conservation, and, more importantly, regeneration. We hope that other tourism projects globally will follow our lead. Even when tourism demand was higher than ever before the pandemic crisis, there was increasing awareness among travelers that their choices have environmental, social and economic consequences. We will offer our visitors the comfort of knowing that their visit to the destination will provide unparalleled immersive experiences while positively impacting the natural ecosystems. In doing so, we expect to lead the global tourist industry response to the coming market trends.
The future of tourism is not just sustainability but enhanced sustainability. This means putting back into the destination, not only maintaining the current status quo. And this is exactly what we aim to achieve.
What are the challenges of delivering a project of this staggering scale?
One of the main challenges is making our remote, untouched destination accessible while at the same time setting new standards in sustainable development. The project is in a pristine remote location with no infrastructure prior to our arrival.
When we first began construction work in February 2019, our first step was to provide the enabling infrastructure required to confront these challenges. Following the strictest sustainability and low-impact construction standards, we have made significant progress.
Today we have 4,000 workers on-site who have delivered over 6 million work hours and manage 1,000 pieces of construction equipment moving millions of cubic metres of earth. With our partner Al Falah we have poured our first batch of green concrete, which reduces up to 60% of carbon emissions compared to conventional concrete. Our first off-site manufactured residential units have been delivered in partnership with Saudi Amana, and we have completed our new airport road.
In parallel, we are designing and delivering cutting-edge research in collaboration with KAUST, NASA, and the Global Airborne Observatory to continue our detailed mapping of the ecosystem and deliver on our sustainability and regeneration commitments.
How important is worker welfare on the project?
The project is a force for positive transformation. We aim to project this positivity on everything related to the design, construction and management of our destination, including most certainly every person involved. After all, every organisation is made out of people, so people are our most important priority. The impression this project makes on every person involved will also be our legacy. We want to make sure we create the best possible working environment for everyone participating in our project.
A healthy, happy workforce is a vital factor for the timely delivery of The Red Sea Project.
The design of the Construction Village, home to 10,000 workers, focuses on creating a community feel, intended to enhance the welfare and quality of life of the workers who will live there. It features residential buildings positioned to form neighborhoods around a centralised area that will be equipped with a range of recreational facilities including cricket pitches, volleyball and basketball courts, football pitches, gyms and cinemas. The rest of our construction workers will live in the Coastal Village, a substantial part of the destination that will eventually host the resort workers.
To further enhance the quality of life, WIFI connectivity across the village will enable people to keep in touch with their families and friends. Also, a catering team will cook and serve several international cuisines for the diverse workforce on the project.
By requiring that all construction workers are housed in accommodation built and managed by TRSDC, we are making every effort to become the benchmark for construction worker accommodation and welfare in the region and the industry.
What’s next for the project and what can we expect over the coming months?
In the next couple of months, you’ll see us award some of our most important contracts, the most significant of which is a significant Public-Private Partnership (PPP) contract covering the development of the utilities infrastructure that will enable us to produce 100% renewable energy 24/7, desalinate water, treat wastewater and cool all facilities.
Under the first phase of the PPP, to be completed in 2022, power generation capacity will be required to meet a maximum demand of 200MW. We will generate power from a mix of solar photovoltaic (PV), wind energy and energy storage batteries, with a back-up biofuel power system to be used only in case of emergency. There will be no connection to the National Grid, cementing our commitment to using 100% renewable energy at the destination.
For water production, we will develop two seawater reverse osmosis (SWRO) plants with a capacity of 30,000 cubic meters per day.