KFUPM Science Park (PASP):

A Special Presentation for H.E. The Rector

Dr. Khalid Saleh Al-Sultan

ByPASP Project Committee

14 June 2003

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Members of the PASP ProjectMembers of the PASP ProjectCommittee & Their Committee & Their

ResponsibilitiesResponsibilitiesDr. Mohammad Abul-HamayelLegal Issues and Governmental RegulationsLegal Issues and Governmental Regulations

Dr. Mohammad Al-OhaliConceptual Planning, International Science Park PracticesConceptual Planning, International Science Park Practices

Dr. Aymen KayyalTechnology Transfer, Incubator/Spin-off Program, and IP Technology Transfer, Incubator/Spin-off Program, and IP ManagementManagement

Dr. Sadiq M. SaitConceptual/Detailed Planning, International Science Park Conceptual/Detailed Planning, International Science Park Practices, and IT Related ActivitiesPractices, and IT Related Activities

Dr. Halim Hamid RedhwiChairman PASP Project Committee Chairman PASP Project Committee Overall Coordination, Planning, & Petroleum/Petrochemicals Overall Coordination, Planning, & Petroleum/Petrochemicals Related ActivitiesRelated Activities

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Presentation OutlinePresentation Outline

Part I: A Brief Overview about Science Parks

Part II: Plan of PASP

Part III: Progress and Status

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What Are Science Parks?What Are Science Parks? A property based initiative which:

– Has operational links with universities and maybe research centers

– Is designed to encourage knowledge based industries – Has an element of technology transfer and business skills

Science parks in other parts of the world: Australia, Dubai, Finland, Hong-Kong, Morocco, Brazil, UK, USA, and others

IASP (International Association of Science Parks, 500+ membership)

How Different from Research Institutes (RI)?

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University’s Motives & Benefits University’s Motives & Benefits from the Parkfrom the Park

Economic development of the country University to become skilled at industry

collaboration Tenants forming useful associations with the

University Commercialization of University research,

including via incubation facilities for start-ups Development of the region and creation of

wealth and employment opportunities To earn income from ground rental to support

University research

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What is an Incubator?What is an Incubator? An incubator generates and sustains the

dynamic process of business enterprise development for individuals eager to start companies to build commercially viable products.

It provides support of infrastructure, logistics, finance, training, and advice, until the businesses find their own place.

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Chronology of EventsChronology of Events• KFUPM Science Park Committee formed: xx/xx/xxxx• International Companies Contacted: xx/xx/xxxx• Letters of Intent Received: xx/xx/xxxx• Conceptual Plan (prepared by PASP Project Committee):

xx/xx/xxxx• Inauguration (by HRH Prince Abdullah Bin Abdulaziz):

xx/xx/xxxx• Prince Abdullah Bin Abdulaziz Science Park (PASP) Active:

xx/xx/xxxx• UNESCO Experts Visit KFUPM: 22-25/02/2003• PASP Plan Finalized: xx/xx/xxxx• Schlumberger Contract Signed: xxxx• Project awarded for layout/infrastructure planning: xx/xx/xxxx• Marketing Campaign Launched: xx/xx/xxxx• Semi Final report on layout/infrastructure arrives: xx/xx/xxxx

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Plan of PASPPlan of PASP

The Vision The Mission Other issues

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The VisionThe Vision

To make a significant contribution to the wealth & welfare of the Kingdom of Saudi Arabia through the development of knowledge based companies that will also strengthen the achievement of the mission of KFUPM to be a leading institution in the creation and dissemination of knowledge in its chosen fields of study

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The MissionThe Mission

• To develop financially self-sustaining physical and operational entity designed to create wealth through the commercialisation of scientific and technological knowledge from KFUPM;

• Fostering technology development and commercialisation from the laboratory to the marketplace;

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The Mission (contd)The Mission (contd)• development of an entrepreneurial culture

amongst faculty, researchers, students, of KFUPM;

• Providing technical, business, managerial, and financial advice to clients;

• Providing space in incubator and science park with flexible leases, and access to university facilities;

• Creation of a self sustaining and self supporting community of knowledge based companies,

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OBJECTIVESOBJECTIVESCommercialization of research and to act

as a spawning ground for technology entrepreneurs

Providing a strong point of presence for major international companies and enterprises.

Providing incubator programs to promote emerging small-businesses and enterprises

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OBJECTIVES (Contd.)OBJECTIVES (Contd.) Utilizing the Kingdom’s industrial strength for

the benefit of making KFUPM a focal point for attracting International R&D Personnel.

Generating employment opportunities for students during their course of study and upon graduation in these business houses.

To perform relevant and high quality R&D for transfer to industry, and provide a focal point of industry-university relationship

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Proposal for Funding & Proposal for Funding & FinanceFinance

Given its ideal location and the explicit returns for the Industry, it is proposed that PASP-KFUPM Company be formed that is financed by:

KFUPM Private Investments (VC) Saudi Aramco, SABIC, and other mega companies

The university would be a decision member responsible for laying down standards and leasing tenants, while operation maintenance and construction would be the responsibility of the company

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Governance & ManagementGovernance & Management The effective management and governance

of the PASP-KFUPM Company is based on the collaboration between three major parties:

– university, knowledge and resources (and partial funding)– industry: financing– government: regulations and incentives

Park managed as a commercial enterprise by a Park Manager, who heads the management team, and is overseen by a board of directors

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Part IIIPart IIIProgress and StatusProgress and Status

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UNESCO Experts VisitUNESCO Experts Visit

Date of Visit: 22-25 February 2003

UNESCO Expert Group on Science Park:

1) Dr. Harry Nicholls, Managing Partner, ADCAL, UK2) Dr. Marco Baccanti, President of International

Association of Science Park (IASP), Spain3) Mr. Nur Youslan, UNESCO, France

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UNESCO Experts VisitUNESCO Experts Visit

To discuss the status and the prepared/submitted conceptual plan of establishing Science Park at KFUPM with PASP Project committee members, and KFUPM officials

To discuss the PASP plan for layout, and infrastructure and land development

To provide set of recommendations

Major Outcomes: – Experts were impressed by the conceptual plan prepared

by the committee, – expressed satisfaction that the direction and thinking

invested thus far will lead to the success of the park, and– provided some additional recommendations

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UNESCO Experts UNESCO Experts RecommendationsRecommendations

• PASP Vision, Mission, Objectives, and Goals should be clear and flexible with determined success criteria;

• Supreme aim is the development of a community that will create wealth and welfare in the Kingdom, the creation of an entrepreneurial culture, that maximises the commercialisation of ideas from KFUPM;

• A combination of patience compatible with the achievement of PASP’s Vision in the long-term (30 years); and a sense of urgency compatible with producing early visible performance

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UNESCO Experts VisitUNESCO Experts Visit((Recommendations, Contd.)Recommendations, Contd.)

• An arms-length company separate from the University and Research Institute should manage the Park (PASP).

• Its function would be to be responsible for establishment and operation of the PASP on behalf stakeholders KFUPM, the Saudi Government, Chamber of Commerce, Saudi Aramco, etc.

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First Tenant in PASP-First Tenant in PASP-SchlumbergerSchlumberger

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Interest of International Companies in Interest of International Companies in KFUPM-JCCP, JAPANKFUPM-JCCP, JAPAN

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Interest of International Companies in Interest of International Companies in KFUPM-CIBA, SwitzerlandKFUPM-CIBA, Switzerland

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Interest of International Companies in Interest of International Companies in KFUPM-Letters of IntentKFUPM-Letters of Intent

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Saudi Offset CommitteeSaudi Offset Committee

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PASP xxxx PlanPASP xxxx Plan

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Saudi Aramco and Sabic RoleSaudi Aramco and Sabic Role

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Finally …Finally …The PAASP is a strong statement of

KFUPM’s determination to maintain its high standards in research, technological development and academic excellence.

It is an initiative to couple the university’s resources and talent with the technological capabilities of the industrial sector, thereby creating a highly collaborative environment with vast potential for joint technological research and development.

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And..And.. With the establishment of this science

park, KFUPM moves forward into its fiftieth year with a far-reaching initiative that will be a dynamic catalyst for technological development and collaboration between the university and the industry.

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Look Ahead PlanLook Ahead Plan xxxx

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Vision 2004Vision 2004 xxxx

THANK YOUTHANK YOU

Engineering Conference Engineering Conference Presentation follows….Presentation follows….

KFUPM Science Park (PAASP):

A New Era for SustainableTechnology Based

Development

Sadiq M. Sait(0n behalf of PAASP Project

Committee)

16 December 2002

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Members of the PAASP ProjectMembers of the PAASP Project& Their Responsibilities& Their Responsibilities

Dr. Halim Hamid RedhwiChairman PAASP Project Committee, Responsible for Chairman PAASP Project Committee, Responsible for

Overall Coordination, & Petroleum/Petrochemicals Related Overall Coordination, & Petroleum/Petrochemicals Related ActivitiesActivities

Dr. Mohammad Abul-HamayelLegal Issues and Governmental Regulations, and othersLegal Issues and Governmental Regulations, and others

Dr. Mohammad Al-OhaliConceptual/Detailed Planning, International Science Park Practices, Conceptual/Detailed Planning, International Science Park Practices, and others and others

Dr. Aymen KayyalTechnology Transfer, Incubator/Spin-off Program, IP Management, Technology Transfer, Incubator/Spin-off Program, IP Management, etc.etc.

Dr. Sadiq M. SaitConceptual/Detailed Planning and IT Related Activities, etc.Conceptual/Detailed Planning and IT Related Activities, etc.

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Three Part OutlineThree Part OutlinePart I: About Science Parks

– Concept, Trends, Stakeholders, Motives, Benefits, etc

Part II: Conceptual Plan of PAASP– Conceptual Plan, Proposed Site, Potential Tenants,

Financing, Consultants, Look-Ahead Plan, etc

Part III: General Discussions & Conclusion

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Part IPart IAbout Science ParksAbout Science Parks

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About Science ParksAbout Science Parks What are they? History and Trends Stakeholders Motives Relevant Joint Activities The Incubator

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What Are they?What Are they? Definitions and forms: A wide range A generally accepted definition includes: A property

based initiative which:– Has operational links with universities, research centers, and/or

other higher education institutions– Is designed to encourage the formation and growth of

knowledge based industries on high-added-value firms– Has a steady management team actively engaged in the transfer

of technology and business skills Science parks in other parts of the world: Australia,

Dubai, Finland, Hong-Kong, Morocco, Brazil, UK, USA, everywhere, hundreds

IASP (International Association of Science Parks)

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Different from an RIDifferent from an RI External Research projects at KFUPM

departments and RI differ from Science Park concept

At the Science-Park, companies conduct research independently for their own motives, by their own researchers, utilizing their own facilities, and may involve University researchers & facilities, without intervention of University

It differs from funded project awarded to University faculty

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History and TrendHistory and Trend Earlier, most (if not all) universities were

reluctant to embrace collaboration with industry, and industry similarly was shy of academia

Around 1980s, Universities began trying to contact industry (a little earlier in some industrialized countries such as the UK)

The science park concept was an unfamiliar one and companies were mainly attracted to it by a desire to be near to the University's scientific research

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History and TrendHistory and Trend Around 1994, Universities would contact

companies through Science Parks (Research Parks)

Now, there are networks of universities and networks of Science Parks

With time, science from laboratories (with work on proof of concept, prototyping), via liaison offices, incubators, nurseries, science parks is making to industry

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StakeholdersStakeholders The primary stakeholders in the development

and sustenance of a Science Park are: – The University– Tenant firms and enterprises (industry component)– Investors and Private Start-up Companies

Each of these stakeholders will play a vital role in the development and growth of the Science Park (PAASP)

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University’s MotivesUniversity’s Motives Economic development through industry

linked projects University to become skilled at industry

collaboration Tenants forming useful associations with the

University in the pursuit of any aspect of the our University’s mission

Opportunities for commercialization of University research, including via incubation facilities for start-ups

To earn income from ground rental in support of University research

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Joint ActivitiesJoint Activities Joint research projects, especially for graduate

and doctoral students Work experience programs for undergrads (part-

and full-time jobs for university students) Sharing of university equipment and laboratories Custom-designed education programs for tenants Many staff in tenant companies can enroll in our

graduate programs Advice from tenants (companies) on the design

of courses Adjunct appointments of industry experts to

teach and research in the university

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Joint ActivitiesJoint Activities Larger companies can have their research work

contracted to the university. (The proximity with the academic departments producing hundreds of graduates in an area of expertise is a plus)

Companies can donate equipment and tools, share expertise, etc., in return for using university labs, faculty, and students

Tenants can also lend University valuable scientific equipment

Senior staff of tenant companies can serve on University advisory boards

Tenants can offer scholarships to postgraduate students

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TypesTypes There are several models, depending on the

objectives It could be a park or a network or parks (a

park can be a network of companies) For a Science Park linked to a University,

collaboration is the key May or may not have an Incubator

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What is an Incubator?What is an Incubator? An incubator is a welcoming and

supporting partner that generates and sustains the dynamic process of business enterprise development for individuals eager to start companies to build commercially viable products and services over innovative technologies; it provides support in terms of infrastructure, logistics, finance, training, advice, and offices, until the businesses find their own place.

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Part IIPart IIConceptual Plan of PAASPConceptual Plan of PAASP

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Conceptual Plan of PAASPConceptual Plan of PAASP The Vision The Mission Goals/Objectives Benefits Funding & Finance Governance & Management Some Critical Success Factors

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The VisionThe Vision

To create an environment within the university that will forge closer ties and enduring links between academia and the industry spanning a spectrum of research and development issues for technological and economic growth.

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The Mission StatementThe Mission Statement

To institute a financially self-sustaining physical entity that would foster technological innovation and accelerate its commercial deployment through sustained collaboration with established companies as well as promote start-up enterprises through business incubator programs.

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Goals/ObjectivesGoals/Objectives The primary purpose of instituting a science

park within KFUPM can be listed as follows:– To forge a strong collaboration between the university and

industry in R&D– To promote small tech-specific businesses and start-ups

through an incubator program– To direct significant technology-driven foreign investment and

presence into the Kingdom– Commercialization of research– Providing a strong point of presence for major international

companies and enterprises– Technology Transfer: Channeling new global technologies and

practices into the Kingdom

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Benefits to KFUPMBenefits to KFUPM Close links and collaborative efforts between the

science park’s businesses and tenants and the university’s faculty, researchers and students

Attraction and retention from amongst the best faculty and researchers

Industrial presence for the benefit of students The presence of International major companies will

help keep the university abreast of the latest technological trends and developments

Employment opportunities for students (during study and upon graduation)

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Benefits to Tenant FirmsBenefits to Tenant Firms Tenant companies can have a significant point of

presence in the region especially from an R&D perspective

Availability of a highly skilled work-force pool from graduate and undergraduate student body

Assistance in identifying university programs and resources that best relate to the tenant’s research

Adjunct faculty participation from tenants Opportunity for commercial deployment of

university’s proprietary patents and innovations Access to the university’s advanced educational and

training programs

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Benefits to InvestorsBenefits to Investors Venture Capital Companies can get involved in

developing infrastructure for PAASP and can go beyond it by managing the park as a commercially profitable enterprise

Private start-up companies would have access to the incubator program at PAASP, which would provide a stable growth catalyst. This is in addition to other research and development facilities as available to other tenants

Developing companies would benefit from the mentoring, investment and marketing support which established larger companies could provide

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Funding & FinanceFunding & Finance Given its ideal location and the explicit returns

for the Industry, it is proposed that the park should be financed entirely by private investment rather than through government funding

This would not only give the university independence from this huge task, but also would be a measure of the Industry’s interest and initiative in the project

Under this model, the university would be a privileged decision member responsible for laying down standards and leasing tenants while maintenance and construction would be the responsibility of a private sector enterprise

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Funding & FinanceFunding & Finance Under the proposed financial system, the University

will provide the land-area for the science park, entering into a lease agreement with a private enterprise for construction and development

This enterprise may receive its returns from a percentage of the land and building rentals

The PAASP Committee has been in contact with a private company which with its experience in funding and managing such projects has expressed interest to partner with the university and secure funding for the SOLP:– Development of the Concept as a Commercial Venture– Investment through SOLP in the Commercial Venture– Advisory role in the Project implementation

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Governance & ManagementGovernance & Management The effective management and governance

of the science park is based on the collaboration between three major parties:

– university, knowledge and resources – industry: financing from the industry – government: regulations and incentives come from them

Park managed as a commercial enterprise by a Park Manager, who heads the management team, and is overseen by a board of directors

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Critical Success FactorsCritical Success Factors Consensus on the factors that

contribute to the success or failure of university-related science parks can be placed in two categories:

1. Factors associated with the site, (its size and location), the university’s inclination, and its research base to contribute and gain from such a relationship

2. Factors associated with the university’s administration and sponsoring of the project

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Critical Success FactorsCritical Success Factors Factors that can greatly impact the

development and growth are:1. Planning, leadership, commitment and involvement of all

concerned parties for effective implementation of the plan2. The detailed plan should be based on clear objectives, well

integrated with the long-term mission and goal of the university (UNESCO Team coming to assist and consult, and also British Council is involved)

3. Close interaction between the tenant firms and the university (openness)

4. A clear management structure with a Park Manager appointed at an early stage

5. Preference to companies in the general strengths of the university

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Part IIIPart IIIGeneral Discussions & General Discussions &

ConclusionConclusion

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FactFact

Despite the considerable potential benefits, world-wide experience shows that genuine collaboration between universities and industry within science parks has been difficult to achieve. Companies in science parks are commercially oriented and need to be persuaded that the University offers attractions.

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A Comment & The ChallengeA Comment & The Challenge Studies have concluded that many science

parks are mainly a form of prestigious real estate development, physically isolated from the surrounding society and thus quite unlikely to generate productive synergies of any kind. (Phillimore et al, XV IASP World Conference Proceedings)

KFUPM needs to accept this challenge and work hard to demonstrate its enthusiasm and ability to offer value to tenant companies

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Broader goals: CautionBroader goals: Caution All future tenants must be capable of

and willing to work with the University Provisions must be worked out to

ensure that the Park achieves the University's aims and does not degenerate into just another business park

University must attract organizations capable of 'forming any useful association with the University’

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What to Expect?What to Expect? The university will be surrounded by some of

the world’s leading technology companies Industry participation in academia The university will build on its current

strengths due to proximity with industry. Proximity will assist greatly in fostering relationship with tenants

The research/teaching programs will concentrate on modern high technology, and university’s research will win recognition through grants and sponsorships

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How to Encourage CollaborationHow to Encourage Collaboration Involving faculty in planning & tenant selection RI and University Research Office can be tenants Appointing a Park Manager early The university having a stake in the parks ongoing

development Offering tenants privileged access to university

facilities Holding regular seminars and briefings, where

university and tenant staff can mingle and make informal contacts

Special scholarships for students to conduct their research projects in the Park

Inviting senior staff of tenant companies to join university advisory boards

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Current StatusCurrent Status Master plan is being created & approvals are

being sought Legal issues are being looked into Offset program (SOLP) is being contacted both

directly and via a private enterprise, and alternate modes of financing are investigated.

Tenants are sending to the university their letters-of-intent (Idemitsu, Japan; Cytec, Italy; IFP, France, Membrana of Germany)

Few have already moved in physically/virtually. Some will construct their own building with our specs (Schlumberger, France; CIBA, Switzerland; JCCP, Japan)

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Finally …Finally … The PAASP is a strong statement of KFUPM’s

determination to maintain its high standards in research, technological development and academic excellence.

It is an initiative to couple the university’s resources and talent with the technological capabilities of the industrial sector, thereby creating a highly collaborative environment with vast potential for joint technological research and development.

With the establishment of this science park, KFUPM moves forward into its fiftieth year with a far-reaching initiative that will be a dynamic catalyst for technological development and collaboration between the university and the industry.

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AcknowledgmentsAcknowledgmentsOn behalf of the PAASP Project Committee I would like to extend thanks to all who contributed to making this presentation in terms of supplying material, editing text, preparing the layout, organization, etc. In particular Faheemuddin, Sanaullah, etc, (all in alphabetical order).