| FRESH CAPITAL BOOST FOR SAUDI’S LOGISTICS SECTOR |
In April, Saudi Ports Authority (Mawani) and Saudi Global Ports (SGP) signed a build-operate-and-transfer (BOT) agreement for container terminals at the King Abdulaziz Port in Dammam.
Under the 30-year BOT agreement, said to be the largest in the country, SGP will invest more than SAR 7 billion to develop and operate container terminals at King Abdulaziz Port.
SGP is a public-private joint venture between the Public Investment Fund (PIF) and PSA international, a Singapore-based port operator. The deal supports the kingdom’s National Center for Privatization programme.
SGP plans to upgrade and modernise the container hub and raise its annual handling capacity of 7.5 million twenty-foot equivalent units (TEU), and create 4,000 jobs through its investment.
“The continuous developments in Saudi ports come in line with the national efforts to achieve goals and pillars of our country’s ambitious vision to promote sustainable economic development and raise competitiveness,” said Eng. Saleh Al-Jasser, minister of transport and chairman of the Saudi Ports Authority.
The project will go a long way in boosting the National Industrial Development and Logistics Program (NIDLP), a key plank of the Saudi Vision 2030, and upgrade the country’s logistics infrastructure. The kingdom hopes to emerge as among the 25 top countries in terms of logistics by 2030.
The agreement also attracts new investments to the national economy, support local content and national industries and increase exports and imports and contribute to creating promising investment opportunities, the companies said.
The King Abdulaziz Port is the country’s largest Saudi port on the Gulf coast and a key trade gateway, spanning 19 square kilometres, with links to the Riyadh Dry Port by railway, connecting the country’s eastern and central regions.
PRIVATISATION DRIVE
The deal comes as part of a major privatisation drive, which saw Mawani issue a BOT agreement with the UAE’s DP World last December to develop container terminals at Jeddah Islamic Port with investments exceeding SAR 9 billion.
“These new agreements will contribute mainly to developing berths, increasing the capacity of container terminals in King Abdulaziz Port by more than 120%, and providing integrated solutions to operate container terminals,” according to Eng. Saad bin Alkhalb, president of Saudi Ports Authority.
“They achieve technological and information integration and automation of operating systems and set environmentally friendly operating practices, which contribute to strengthening their leading role in the global maritime traffic and supporting the import and export operations.”
Mawani also launched a new shipping line connecting the country to the promising markets of East Africa.
CMA CGM, the French container transportation and shipping company, has been tasked with running the first container shipping line to reach King Fahd Industrial Port in Yanbu, to boost exports and imports from the area.
“The new shipping line will contribute to linking the kingdom's ports, Jeddah Islamic Port and King Fahd Industrial Port in Yanbu with East African ports, and will lead to opening direct lines for shipping and exporting national products, increasing the quantities of handling in Saudi ports, in addition to contributing to direct import from East Africa and increasing trade,” according to the Saudi Press Agency.
TRADE DATA
Non-oil merchandise exports in the first month of the year fell 15% to SAR 16.34 billion, compared to January 2019, mainly due to declines in chemical and related products, plastics and rubber. Merchandise imports during the month also decreased 12.5%, to SAR 39.7 billion in January 2020 compared to the same period last year. The declines were led by vegetable products and prepared foodstuffs.
In 2019, Saudi oil exports reached SAR 758.9 billion, a 12.6% decline over the previous year. Non-oil exports stood at SAR 221.8 billion, a 6% drop from 2018. In addition, oil imports rose 6.75% to SAR 541.25 billion compared to the previous year, according to General Authority for Statistics.
Saudi Arabia is also taking a leadership role globally, chairing the G20 Trade Ministers in late March, as the president of the organisation.
Dr. Majid Al-Qasabi, the Saudi trade minister, opened the virtual meeting focused on the coronavirus crisis. He stated that G20 members have “the tools to change the course of this crisis” and stressed the need for further “co-ordination and co-operation, at the highest level, coupled with the right measures to mitigate the impact of the pandemic on health, the global economy, and trade and investment.”
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