Saudi Arabia to invest $133 billion in transport to become global logistics centre

Kingdom plans 300 projects, including new flagship airline, to expand the sector by 2030

Riyadh. Saudi Arabia is planning an ambitious national transport strategy to become a global logistics centre. Reuters
Powered by automated translation

Saudi Arabia plans to invest more than 500 billion riyals ($133bn) by 2030 to expand its transport sector as part of a strategy to make the kingdom a global logistics centre.

The Arab world's biggest economy has plans for more than 300 projects in transport and logistics through partnerships with the local and international private sector, Saudi government officials said on Monday.

They include launching a new flagship airline, expanding airports, enlarging its railway network, increasing ports' capacity and investing in futuristic public transport technology such as the Hyperloop, officials said.

The kingdom is aiming to more than triple the number of annual passengers through its airports in the next nine years, said Abdulaziz Al Duailej, president of the General Authority of Civil Aviation (GACA).

It will increase airports' capacity to 330 million passengers a year by 2030, up from 103 million in 2019, Mr Al Duailej said. Annual capacity at King Khalid International Airport in Riyadh and King Abdulaziz International Airport in Jeddah would each expand to 100 million passengers, he said, without providing a timeframe. The kingdom has 28 airports, four of which handle international flights, according to the GACA's web site.

Mr Al Duailej was speaking at an event detailing Saudi Arabia's National Strategy for Transport and Logistics that was announced last week. The strategy aims to boost the contribution of the transport and logistics sectors to gross domestic product to 10 per cent by 2030, up from 6 per cent. The move is part of the kingdom's broader vision to diversify its economy, develop its non-oil sector, create jobs, attract foreign investment and draw high-skilled talent.

The new strategy will help Saudi Arabia meet its targets of hosting 100 million tourists and 30 million Hajj and Umrah pilgrims, Mansour Al Turki, Saudi's deputy minister of planning and information, said.

The strategy calls for increasing the kingdom's international air links to 250 destinations, up from 99 routes currently, Mr Al Duailej said. Saudi Arabia is also seeking to become a global air cargo hub, increasing its air freight capacity to more than 4.5 million tonnes per year, up from 900,000 tonnes in 2019.

Saudi Arabia last week announced plans to establish a second national airline as part of the new transport strategy, which seeks to position the country in the fifth rank in terms of global air passenger traffic.

Saudi Arabian Airlines, or Saudia, is the national carrier and the biggest operator in the kingdom. Others include budget airline Flyadeal, owned by Saudia, and Flynas, which is owned by Prince Alwaleed bin Talal’s Kingdom Holding.

The private sector will play an increasingly important role in the aviation sector, particularly in building, operating and managing airports in the kingdom, Mr Al Duailej said.

The GACA will continue to push for the privatisation of airport companies to make the assets work on a commercial basis while it focuses on its role as an aviation regulator, he said.

With railways, the strategy aims to boost capacity to 25 million passengers, up from 3 million currently, and 36 million tonnes of freight, up from 18 millon tonnes currently, by 2025, Bashar Al Malik, chief executive of Saudi Railway, said.

It will increase the network to 8,080 kilometres, from 5,330km currently, Mr Al Malik said.

"We invite the private sector to contribute to this ambitious plan," he said.

For sea ports, the strategy calls for boosting annual shipping containers handled by the kingdom to 40 million by 2030, up from 9.5 million currently, Omar Hariri, president of Saudi Ports Authority (Mawani), said during the event. This will be done through more private sector contracts for sea port operations.

Saudi Arabia's economy is expected to grow 2.1 per cent this year and 4.8 per cent in 2022, the International Monetary Fund said in May.

Non-oil growth is projected at 3.9 per cent in 2021 and 3.6 per cent in 2022 compared to a contraction of 2.3 per cent in 2020, according to the Washington-based lender.

Updated: July 06, 2021, 8:35 AM