Saudi Arabia’s high-tech Neom mega-project plans to expand a tiny local port into a trade and manufacturing hub near the Suez Canal.
The proposal is the latest eye-catching announcement by Neom, with progress on the ground so far limited to earthworks. About 12 per cent of global trade flows through the Suez Canal.
The port will anchor an industrial city that Neom announced last week called Oxagon, Vishal Wanchoo, Oxagon’s chief executive, said. An existing port near the Red Sea town of Dhiba will be transformed to handle a container capacity of 3.5 to 4-million-tonne equivalent units by 2030, he said.
The project could eventually serve Neom’s commercial tenants as well as the broader Gulf region, Jordan and Iraq, he said. Capacity might extend up to nine million TEU depending on Oxagon’s growth, he added. Dubai’s Jebel Ali port, the region’s largest, has capacity of more than 19 million TEU.
“We will develop a state-of-the-art port and supply chain system and we have a real advantage because we’re starting as a greenfield,” said Wanchoo, a former GE executive who joined Neom this year.
Announced in 2017, Neom is the crown jewel of Prince Mohammed bin Salman’s programme to overhaul the economy of the world’s largest oil exporter. His plan to turn the remote region on the kingdom’s northwest coast into a robot-driven tech hub encapsulates the major elements of his Vision 2030 initiative to diversify away from crude and boost investment.
Oxagon will eventually include a complex that “floats” on the sea, officials said.
The 50-square-kilometre area is expected to house 80,000 to 90,000 residents and 40 to 50 companies by 2030, Wanchoo said. He did not disclose planned spending on the project, which combines government and private-sector investment.
The first phase of construction, until 2025, will focus on the segment to be built on land, he said, with the floating area still in the “early phases of design".
“We wanted to look ahead and say with all of the climate change that’s occurring and the rising of the sea levels, could we build a modern day Venice,” he said – “a floating city that doesn’t have to deal with rising sea levels, or deals with it because of the way it’s designed.”
Neom is looking at connecting Oxagon’s port with north eastern Saudi Arabia and the broader region first by road transport and later by rail, he said. Port operations with container capability will start in mid-2022 and expand from there, he said.