Saudi Arabia plans to solicit bids for contracts worth more than 17 billion riyals (Dh16.64bn) this year to modernise two airports and cater to the country's rising demand for air travel, a senior transport official says. The first contracts will be for a new airport at the holy city of Medina and a commercial centre near Jeddah's King Abdulaziz International Airport, said Alaa Samman, the director of business development at the General Authority of Civil Aviation (GACA).
"We plan to offer a 25-year build, operate and transfer contract for the development of a new airport in Medina," Mr Samman said. The new Medina airport, estimated to cost between 7bn and 8bn riyals, will increase traffic capacity to 8 million passengers a year from the present 3 million. The Medina project will be presented in May with bids accepted until October and contracts awarded by December.
The projects are part of a total of 55bn riyals in work to upgrade the nation's airport infrastructure. The country's 27 airports handled 30 million passengers last year, a level expected to double in the next decade. About 18 million people travelled through Jeddah's airport - a gateway for Muslim pilgrims to the holy cities of Mecca and Medina - last year. That is expected to increase to up to 30 million people by 2013, Mr Samman said.
Plans for the commercial centre there have already attracted interest from four companies, including Lend Lease of Australia, Saudi Oger, Saudi Real Estate and Hines, a US-based developer. All are expected to submit bids before the end of May. Another airport-focused industrial cluster is planned in Riyadh, to be launched on a smaller scale next year. A further development is planned later in Dammam, the eastern province that is the source of most of Saudi Arabia's oil.
Saj Ahmad, an analyst at FBE Aerospace in London, said the work was needed to enable Saudi Arabia to match airport investments by other Gulf states. "Saudi airport development has fallen behind that of GCC rivals Qatar and the UAE," he said. But he cautioned that the efforts could be stymied by the country's restrictive tourism regulations. "Much of the Saudi capacity will remain unused given the kingdom's restraints on tourism, which the rest of the GCC thrives on," he said. "It's a classic case of too little, too late."
* with agencies @Email:igale@thenational.ae