| In a landmark development for the kingdom’s transportation sector, the Saudi Global Ports Company (SGP), assumed management of King Abdulaziz Port Dammam’s two container terminals in September.
The handover of the First Container Terminal from Saudi Ports Authority, or Mawani, to SGP was done following the signing of the 30-year build, operate and transfer (BOT) agreement between the two companies in April.
“The smooth transition within a short timeline under the pandemic situation is phenomenal. The positive relationship will be the catalyst to accelerate the developments to elevate the seaport and logistics capabilities of Dammam to support the industrial growth initiatives under Saudi Vision 2030,” said Abdulla Zamil, chairman of SGP.
SGP is a joint venture between Saudi Arabia’s Public Investment Fund (PIF) and Singapore-based PSA International (PSA), one of the world’s largest port operators.
The SGP terminal will be equipped with the latest equipment and technology to serve the fast growing economy of the kingdom and the regional economies of the Arabian Peninsula, and transform Dammam into a preferred port of call. The port is located close to the kingdom’s capital city and financial centre Riyadh, and boasts strong road, rail and air connections to the rest of the country.
Since the handover, SGP and Mawani have been collaborating on ensuring workforce retention, transfer of assets, and working in tandem with Tabadul and Customs Authority. In addition to the transfer of equipment from Mawani, SGP has advanced the purchase and commissioning of more than 200 new handling equipment to facilitate smooth operations at both terminals.
“SGP’s development and modernisation plans will integrate both container terminals into a mega container hub, capable of competing globally and well positioned for the future. When the planned expansion works are fully completed, KAPD’s annual container handling capacity will increase to an estimated 7.5 million twenty-foot equivalent units,” SGP said.
BUILDING A LOGISTICS HUB
The company plans to invest SAR 7 billion (USD 1.8 billion) on the facility, which is expected to be the largest seaport investment by a single operator under a public private partnership in the kingdom.
“As both a shareholder and technical partner, PSA is committed to providing its expertise and leveraging its resources towards the transformation of King Abdulaziz Port into a global mega hub, with modern and robust infrastructure, and through the cultivation of a strong Saudi workforce,” said Wan Chee Foong, regional CEO of Middle East South Asia, PSA International.
The move is part of an overall effort to accelerate the National Industrial Development and Logistics programme, part of the overarching Saudi Vision 2030 initiative that aims to transform the kingdom into a major industrial power and an international logistics platform.
The multi-billion project will focus on upgrading, developing and expanding industries, mining, energy and logistics sector. Part of that agenda is to privatise seaports, airports and railway operations as well, and attract private sector and world-class international companies into the sector.
EXPORTS REBOUND The pandemic has clearly hurt global trade this year and the figures coming out of Saudi Arabia were no exception, with its merchandise exports down 53.6% during the second quarter compared to the same period last year, according to the General Authority for Statistics.
However, July trade data suggests green shoots of recovery are sprouting again.
The kingdom’s oil exports reached SAR 33.714 billion in July – its best performance since February, according to GStats. The exports were 25% higher than June’s data, but 46.4% lower than in June 2019.
Non-oil exports also enjoyed their best run since February, and ended up SAR 17.4 billion for the month, up 5% from June; the figures were down just over 8% compared to the same period last year.
China, Japan, South Korea, India and the UAE were the kingdom’s top five export destinations, and virtually all of them (with the exception of South Korea) registered higher growth compared to June.
The monthly increase in exports point to strong economic growth and an overall improvement in trade flows, not only in the oil sector, but also in the non-oil exports segment.
Imports also fell 30.5% in July to reach SAR 37.6 billion, compared to the same period last year.
The kingdom’s trade surplus in July stood at SAR 13.4 billion, after falling in deficit in June.
The World Trade Organization forecasts a 9.2% decline in the volume of world merchandise trade for 2020, which will be followed by a 7.2% rise in 2021.
As is evident in Saudi export data, global trade has also seen higher flows.
“The performance of trade for the year to date exceeded expectations due to a surge in June and July as lockdowns were eased and economic activity accelerated,” the WTO said in a statement. “The pace of expansion could slow sharply once pent-up demand is exhausted and business inventories have been replenished. More negative outcomes are possible if there is a resurgence of COVID 19 in the fourth quarter.” |
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