"Mawani" signs BOT Agreements for the Container Terminal in Jeddah Islamic Port
Saudi Ports Authority, “Mawani” held a ceremony for signing two concession contracts for the development of container terminals at Jeddah Islamic Port according to the BOT scheme (Build, Operate and Transfer) with the prominent global ports operator and developer, DP World and the leading local and regional ports operation and development firm, Red Sea Gateway Terminal.
The high-profile event was hosted under the patronage of HRH Prince Badr Bin Sultan Bin Abdulaziz Al Saud, Acting Governor of Makkah Province in the presence of HRH Prince Mishaal Bin Majid Bin Abdulaziz Al Saud, Governor of Jeddah, HE Minister of Transport and Mawani Chairman Eng. Saleh Bin Nasser Al-Jasser, HE Minister of Industry and Mineral Resources Bandar Bin Ibrahim AlKhorayef and other excellencies, dignitaries and executives from the private sector.
Commenting on the occasion, HE Eng. Saleh Bin Nasser Al-Jasser said the contracts are indicators of the great attention that the Custodian of the Two Holy Mosques’ leadership has shown for the development of the Kingdom’s transportation network. He added that the contracts also fulfill HRH the Crown Prince’s vision in utilizing the Kingdom’s geographical location as a midpoint connecting the three continents and a global trade hub through which nearly one third of international trade travels.
HE Al-Jasser also signified the importance of developing and increasing the capacity of Saudi ports by strengthening partnerships with the local and global private sector, providing the latest operating systems aligned with global standards, and accelerating the import and export ecosystem.
“The continuous development endeavors in Saudi ports are a result of the nationwide efforts to achieve the goals of the National Industrial Development and Logistics Program — one of the major Saudi Vision 2030 programs that aims to increase the competitiveness of the economy and position the Kingdom as an attractive global logistics hub,” Al-Jasser said. He added that signing the concession contracts marks the onset of a new phase of developing and upgrading Jeddah Islamic Port’s operational performance, emphasizing the port’s prominence as a key element in international maritime trade due to its strategic location overlooking the Red Sea coast that accounts for over 13 percent of global maritime trade.
The port also creates a link between the East and West and directly contributes to enhancing the Kingdom’s role as a leading hub for logistics services, and facilitating global supply chains. Jeddah Islamic Port stands out among other Red Sea ports as the most connected to different regions of the world and thus is expected to be one of the pathways of the anticipated Silk Road, which will make the port a global platform for Saudi exports and a passageway and hub for international maritime trade.
On his part, Mawani President Eng. Saad Bin Abdulaziz Al-Khalb said the concession contracts, the largest in the history of Saudi ports, are currently considered one of the biggest privatization deals with a long duration of 30 years and investments amounting to 9 billion SAR. He added that the project was designed in collaboration with the Ministry of Transport and the National Center for Privatization to activate the MoUs that Mawani had signed in the presence of HRH The Crown Prince during the launching of the National Industrial Development and Logistics program last February.
Al-Khalb added that these contracts will contribute to modernizing the infrastructure of the northern and southern container terminals at Jeddah Islamic Port. He noted that works will include the development of pavements which will amplify the port’s pivotal position on the Red Sea Coast, thus enhancing Jeddah Islamic Port’s leading role in some of the giga-projects of Saudi Vision 2030- which include Neom, Red Sea Development and Amaala. The pavements development will also support domestic trade and logistics services for the supply chain within the Kingdom.
Al-Khalb pointed out that Mawani targets strengthening Public-Private Partnership (PPP), in line with Saudi Vision 2030, and aims to increase private sector investment in long-term contracts in order to advance operational efficiency of infrastructure and optimize the benefit from investments. It also plans to increase the share of the private sector in Saudi ports to 70 percent by 2020.
Chairman of DP World, Sultan Ahmed Bin Sulayem valued this partnership as an initiative that reinforces the brotherly relations between the Kingdom and the United Arab Emirates. He added that this step confirms the Kingdom’s huge potential that will ensure its success in the strategic transformation towards revenue diversification, which is depicted through its trade development initiatives in ports and logistics services.
Sulayem emphasized Jeddah Islamic Port’s strategic location and its world-class standing, indicating that the agreement will support the port’s position by underpinning trade and logistics networks in the Red Sea and the Middle East, and transform container terminal operations through innovations based on the latest technological advancements. This will make the port a logistical platform that provides services to more than 500 million consumers in the region, he added.
On his part, CEO of Saudi Industrial Services Co. (SISCO) and member of the Board of Directors of RSGT, Mohammed Al-Mudaris, said this new contract represents an extension of a journey that started a decade ago when RSGT became the Kingdom’s first national container terminal to be built by the private sector. “During that project, the company invested more than 2.5 billion SAR on infrastructure and Saudi workforce that contributed to achieving the highest global productivity rates.”
Al-Mudaris added that RSGT’s new commitment to inject some 6.6 billion SAR over the contract term confirms the company’s confidence in the Kingdom’s reliable business environment that attracts private investments in the relevant fields. He indicated that such investments will enhance Jeddah Islamic Port’s position as a basic pillar and a global logistics hub for maritime trade.
The signing of the new concession and operation contracts for Jeddah Islamic Port represents a major step towards achieving Mawani’s developmental strategy which aims to increase the container terminals’ capacity by more than 60 percent (to over 12 million containers annually, compared to the current 7.6 million containers), in addition to providing around 4000 new job opportunities in the sector, and increasing demand for local content and investments flow. This will reflect positively on achieving the objectives set for the ports sector and enhancing its performance, both in terms of quality and quantity.
Jeddah Islamic Port is considered one of the busiest maritime navigation sites where more than 65 percent of goods imported through Saudi ports are handled. Located across the trade lifeline connecting the Far East with Europe, Jeddah Islamic Port ranks first among Red Sea ports. It stretches over an area of 12.5 sq km, and comprises 63 pavements with a capacity of up to 130 million tonnes annually.