Jul 10 2010 |
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Saudi Arabia is set to become World's Leading Transport and Logistics Hubs: SAGIA
10 July 2010Riyadh -- Saudi Arabia's strategic location and large-scale infrastructure development will position the Kingdom as one of the world's leading transport and logistics hubs, according to a report of Saudi Arabian General Investment Authority (SAGIA) .
With its unique strategic location straddling the markets of east and west, KSA is recognizing its potential as a leading global transport and logistics hub.
The nation already boasts numerous land and sea routes to Eastern Europe, the Indian subcontinent, the Middle East and North Africa plus East Asia. However, SAGIA, in collaboration with domestic and international partners, is now making substantial investments in a sophisticated transportation network that will leverage KSA's competitive advantages.
Saudi Arabia's rapid domestic development spearheaded by the planned Economic Cities means there's strong demand for sector growth. The cities alone could contribute an additional 86-129 million tons per annum (or approximately 30% of the expected growth in cargo flow through KSA).
Saudi Arabian domestic cargo demand is expected to grow by a 4-5% compound annual rate through 2020, while international flows are expected to grow at 5% and 7-8% for air and sea cargo, respectively.
The development of a world-class, multi-modal transportation system in Saudi Arabia will improve operating efficiencies and speed to market for businesses looking for strategically located transportation systems for distribution and/or supply chains.
Naturally, the availability of low-cost fuel is a key factor making it an ideal site to centralize energy intensive logistical activities, such as refueling.
Saudi Arabia's investment initiative offers large-scale project opportunities for contractors, builders, and operators of transport facilities. Not only that, lucrative opportunities for constructing and operating advanced transportation and logistics infrastructure will continue to open up.
Current infrastructure projects include airport renovations and a number of massive rail developments, such as the Madinah-Makkah monorail, the Land Bridge and the north-south Mineral Line, the report disclosed.
It highlighted the following good reasons for investment in the Kingdom:
Unparalleled land and sea lane access, with close links to Europe, Africa, South and East Asia
Substantial cost advantages due to the low domestic cost of energy
Large-scale, mutually reinforcing investments in road, rail, sea, and aerial transportation
Strong domestic growth, supported by massive capital spending and rising personal wealth
A highly stable, competitive and increasingly liberal business environment
Investment areas.
Ports: 5
Air: 3
Rail: 3
Road: 3
Logistics centers: 5
Sea: Studies indicate several opportunities for capacity expansions and operational enhancements with attractive opportunities for qualified port operators. Jeddah Islamic Port alone could increase capacity by 30-50%.
Air: Air operators are sought to drive expansions to KSA’s air transport infrastructure. For example, significant upgrades are currently underway at Jeddah Airport and a new cargo village has been planned.
Road: SAGIA seeks to invest in roads to accommodate basic demand growth in addition to traffic resulting from the establishment and evolution of the Economic Cities.
Logistics: Rising demand and deliberate public investment will drive development of world-class capabilities in supply chain management.© Saudi Press Agency 2010
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