The sleeping giant that is Saudi Arabia
Red Sea Gateway Terminal is the only Saudi terminal that can currently handle new generation 13,000 teu containerships
Regional giant Saudi Arabia lacks modern port capacity for a country of its size, location and wealth.
Saudi Ports Authority (Seapa) says the country’s ports achieved an 8% increase in volume last year, handling 154m tonnes. Imports increased more than 15%.
Now, JIP is fast approaching capacity and there are limits to expanding its site. Last year, Red Sea Gateway Terminal (RSGT) brought 1.8m teu of new capacity to Jeddah. The $510m terminal is Saudi Arabia’s first build, operate, transfer (BOT) port development project.
RSGT is the only Saudi terminal that can handle new generation 13,000 teu containerships. Last year, the terminal handled 500,000 teu. “This year, we expect throughput between 900,000-1m teu,” says RSGT chief executive, Aamer Alireza.
“In 2010, Jeddah’s container throughput increased 24% overall. Most growth came from transhipment. Local volume has grown less rapidly, but this year, we also expect growth in local volume of between 8.5%-9%.”
Saudi Arabia needs new Red Sea capacity. In 2008, DP World signed a Memorandum of Understanding to develop and manage a $6bn megaport at Rabigh. The 13m sq metre port was to handle more than 20m teu, built in phases, to support new urban development at King Abdullah Economic City. But now the plans have scaled down.
“We understand that it is developing but not on the size or scale originally discussed,” says one observer. “KAEC’s port will open in 2013 with initial capacity of 1.5m teu and a further 1.5m teu to come in the second phase... What happens after, and when, is not clear.”
DP World would not comment on its involvement with KAEC, and the project does not appear on the company’s website list of New Developments.
“There is a lot of confusion about who will operate KAEC’s new port,” says Drewry Shipping consultant, Abhishek Tandon. “But the market may not be able to take a lot of transhipment volume, initially. Red Sea demand is less hub-and-spoke transhipment than interline transhipment... but this could be an opportunity for KAEC.”
Saudi Arabia is pressing ahead with new Gulf coast capacity, however. In July, Singapore’s PSA Corp signed a deal to develop, operate and manage a new 1.8m teu terminal at the Port of Dammam, in a joint venture with the Public Investment Fund. Dammam’s existing container terminal, a Hutchison Ports partnership, handled 1.33m teu in 2010.
Oil-rich Dammam is a gateway to the growing construction and consumer market of Riyadh, linked via railway managed by Saudi Railways Organisation. An estimated 15% of Dammam’s throughput travels by rail. Sources close to the project value terminal two at $613m, and say Saudi Global Ports phase one will open in 2014.
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