Saudi Ports Authority (Mawani) signed a 7 billion Saudi riyal (Dh6.85bn) deal with a company backed by the kingdom's sovereign wealth fund to develop new container terminals at the King Abdulaziz Port in Dammam.
The new 30-year build, operate and transfer (BOT) concession agreement with the Public Investment Fund-backed Saudi Global Ports is the largest of its kind in the country, Mawani said in a statement on Monday. It represents a major step forward in achieving the authority’s strategic objectives and development plan for the country’s ports and logistics infrastructure, the authority said.
“The continuous development in Saudi ports come in line with the national efforts to achieve [the] goals and pillars of our country’s ambitious vision to promote sustainable economic development and raise competitiveness,” Saleh Al Jasser, Saudi minister of transport and chairman of Mawani, said.
The deal is part of initial agreements signed during the launch of the country's National Industrial Development and Logistics Programme (NIDLP) last year. Saudi Arabia aims to spend 100bn riyals through NIDLP on expanding the country’s industrial base to attract 1.6 trillion riyals in investment by 2030.
Saudi Arabia, the biggest Arab economy, is undertaking a slew of measures to help boost the contribution of the non-oil sector to the economy under Vision 2030, its overarching road map for the kingdom’s economic overhaul. Riyadh plans to boost the country’s private sector’s contribution to the economy to 65 per cent of gross domestic product by 2030, from about 40 per cent.
The new BOT deal at King Abdulaziz Port follows on from a previous agreement Mawani signed in December with Dubai's DP World to develop container terminals at Jeddah Islamic Port, which will see 9bn riyals invested, Saad Al Khalb, president of Mawani, said.
Under the new agreement, SGP – a joint venture between the PIF and international ports operator PSA international – will develop and modernise facilities at King Abdulaziz Port to transform it into a container terminal hub. The work will increase the port’s capacity, allowing it to handle 7.5 million twenty-foot equivalent units once complete, a statement said, without giving a timeline for the project.
New berths and container handling equipment will be added, more than doubling existing capacity. The project is set to provide more than 4,000 jobs in the ports and logistics sector in the kingdom, Mawani said.
The deal will also strengthen logistics operations, raise the reliability of supply chains and support local and international trade. It will also attract new investment into the kingdom's economy, support local content and national industries and will increase the kingdom’s exports, Mr Al Jasser said.