The entertainment industry in Madinah has lost SR200 million after a group of investors decided not to invest any money in the sector because of the stringent laws and the absence of any incentives for investors, Al-Madina newspaper reported.
Economic experts expect the state treasury to lose 35 percent of revenue from investment in the entertainment sector because of poor management by the Madinah Municipality and its inability to provide investors with lucrative opportunities.
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Abdulghani Al-Ansari, an economic expert, called upon the municipality to offer investors more facilities in order to attract them back to the sector.
“Decision-makers should entice investors to implement entertainment projects different from the ones available right now. They should consult experts in the field to come up with projects that fit the cultural identity of Madinah, as such projects can bolster the economy and performance of the sector,” he said, noting that the investment in the entertainment and tourism sector is estimated at a billion riyals yearly and generates 05-10 percent of the profits.
A source who used to be a member of the Municipal Council in Madinah, who preferred anonymity, said the reason why several investors decided to leave the sector was because Madinah Municipality tried to convince the investors to help in the maintenance of public parks. The municipality signed long-term contracts with the investors in order to generate cash liquidity for the state treasury.
However, the implementation of the contracts was suspended. As a result, the municipality faced legal problems as the investors demanded that the municipality pay the penalty stated in the contracts for violating the conditions of investment contracts.
The source said the municipality allowed the investors to come back to the sector after eight years have passed since one of the large investor-run public parks was closed. The municipality also withdrew five major investor-run parks from investors in order to rehabilitate the parks but it did not. All five parks remained closed for eight years.
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According to the municipality’s current plan for improving the quality of services, it will put up parks again for private-public partnership in early 2018.
Majd Al-Mahmadi, chairman of the tourism committee, Madinah Chamber of Commerce and Industry, estimated the losses of the entertainment sector at SR200 million annually because of the public parks remained closed for years and because the investors no longer want to invest in the sector. Because the municipality’s decision, thousands of job opportunities were lost and could have been created. He called upon the municipality to entice investors with more facilities as the sector can help create job opportunities.
Madinah Mayor Muhammad Al-Omari said the municipality launched 30 PPP investment projects in the entertainment sector in the city this year and that the projects are in the process of being awarded to investors.
“These projects will create 100 investment opportunities in the sector. We have designed plans to improve the quality of services offered to the public,” he said.
