TAV and Al Rajhi land two Saudi airport deals

Joint venture partners pick up their third and fourth airport deals from the General Authority of Civil Aviation.

A partnership between Turkey’s TAV Group and Saudi Arabia’s Al Rajhi Holding Group has been granted deals to expand and operate two airports in Saudi Arabia.

The partnership will build new terminals in the cities of Qassim and Hail – both of which are north-west of the capital, Riyadh – and then operate them for 30 years.

The deals were awarded by the Kingdom’s General Authority for Civil Aviation (Gaca).

Both Qassim and Hail have existing airports, which each have a current capacity of 2.5 million passengers per year. Following the redevelopment, they will both have the capacity to handle 6.5 million passengers per year.

The appointments are part of a broader privatisation push by the kingdom as a method of funding the redevelopment of its airports.

TAV and Al Rajhi Group built the first privately-financed airport in the kingdom, Prince Mohammad bin Abdulaziz Airport, in Medina. The pair built the airport alongside contractor Saudi Oger over a four-year period from 2011-15 and have a licence to operate it for 25 years. Last month, they agreed a deal to expand Yanbu airport from 1.2 million passengers per year to 3 million per year, with a 30-year operating period.

TAV, which has both a contracting and an airport operations arm, said that the latest deal would eventually bring the number of airports it operates to 17 worldwide.

Sani Sener, the company’s president and CEO, said: “TAV’s success in the Medina Airport project, which was the first airport privatisation project in Saudi Arabia, opened new doors in this country.

“In the last two months, TAV has been selected by the Civil Aviation Authority of Saudi Arabia for the development and operation of three more airports.”

He added that the firm had “its signature in the capital city airports of six countries” in the wider region, as it is also working on the expansion of airports in Abu Dhabi and Bahrain, and will operate a new private passenger lounge at Muscat airport.

The Gaca also awarded a separate deal last week to a consortium to develop a new international airport in the city of Taif, near Mecca.

The winning consortium, comprising Jeddah-based investment company Asyad Holding, Consolidated Contractors Company and the operator of Munich Airport, Flughafen Munchen, will build an airport with an initial capacity of 5 million passengers per year, but with the potential to expand to 8 million. It is due to be opened in 2020.

A recent paper published by consultancy Oliver Wyman said that privatisation of airports can bring benefits to governments and the wider economy, as well as providing better facilities for passengers.

“However, privatisation takes time, and many arduous steps are required to achieve a robust outcome,” it said.

mfahy@thenational.ae

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