Gulf Construction Online - Ports set to expand

Saudi Arabia

The RSGT ... poised for expansion.

Ports set to expand

01 May 2020

Two major ports on the west and east coasts of Saudi Arabia are poised for expansion under a multi-billion-dollar programme being spearheaded by the Saudi Ports Authority (Mawani).

The authority last month signed 30-year build, operate and transfer (BOT) agreement worth more than SR7 billion ($1.85 billion) with Saudi Global Ports (SGP) for the construction and operation of container terminals at the King Abdulaziz Port in Dammam.‏

The BOT agreement represents a major step by Mawani towards achieving its strategic objectives and development plan by conceding some of its services in partnership with the Ministry of Transport and with the support of the National Center for Privatization.

Upon assuming the responsibility of managing both container terminals, SGP will embark on a development and modernisation programme to transform King Abdulaziz Port into a mega container hub and increase the port’s capacity to an estimated 7.5 million 20-ft equivalent units (TEUs) annually when fully completed.

Under this agreement with SGP, Mawani will invest and develop key infrastructure such as berths and container handling equipment, and more than double the existing container handling capacity of King Abdulaziz Port. The investments will focus on environment-friendly and technologically sophisticated systems, including the adoption of automation.

Meanwhile, Mawani also signed deals at the end of 2019 with Red Sea Gate Terminal (RSGT) and DP World for the north and south container terminal at Jeddah Islamic Port.

As part of its agreement, RSGT last month announced plans to invest heavily on the expansion of Jeddah Islamic Port, mainly to help boost its operational capabilities and also for future renovation work.

This marked the official commencement of RSGT’s take-over of operations in the northern section of the port (previously known as North Container Terminal).

The 30-year concession agreement for the existing north port facility signed by RSGT with Mawani calls for $1.7 billion of investment in infrastructure, equipment and technology by 2050, as annual container throughput capacity surges to 8 million TEUs.

CEO Jens O Floe comments: “As RSGT begins operations at the northern part of Jeddah Islamic Port, we are very proud to commemorate this tremendous milestone of the RSGT growth strategy, demonstrating our ongoing and long-standing commitment to expansion, modernisation, and world-class terminal services.”

By 2023, the expanded RSGT, covering an area of 1.5 million sq m, will have increased annual container throughput capacity to 5.2 million TEUs, states Floe.

RSGT, which currently has the capability to accommodate ultra-large container carriers (ULCCs) of 20,000 TEU class and above, will be equipped with 24 Super Post-Panamax quay cranes, 67 rubber-tyred gantry cranes (RTGs), and will offer 4,900 Reefer plugs at the end of the first three-year phase of investment.

“This carefully planned programme of growth and investment will firmly establish RSGT as the largest logistics gateway, and the busiest container terminal, in Saudi Arabia, and on the Red Sea,” remarks Floe.

The flagship Saudi container docking terminal has already signed an Islamic financing agreement with Banque Saudi Fransi and Al Rajhi Bank for the project.

RSGT is an international terminal operator joint venture between Saudi Industrial Services group Sisco and the Malaysian Mining Company (MMC).

Late last year, DP World secured a 30-year BOT concession from Mawani for the management and development of the Jeddah South Container Terminal at the Jeddah Islamic Port. As per the deal, DP World will invest up to $500 million to improve and modernise the port, including major infrastructure development to enable the Saudi port to serve the ULCCs.