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Infrastructure projects support Riyadh’s logistics ambitions

12 September 2023

This package on Saudi Arabia’s transport sector also includes: 

> Contractors bid to build Ceer car plant
> Spark logistics zone to start operations in 2024
> Neom awards mountain tunnel package for The Line
> Neom tenders The Line railway track works
> Neom invites revised bids for Oxagon project
> Gaca awards Riyadh airport cargo package

 

Saudi Arabia reiterated its ambition to become a global logistics hub in late August when Prince Mohammed bin Salman bin Abdulaziz al-Saud, Crown Prince, Prime Minister and Chairman of the Supreme Committee for Transport and Logistics, launched the Master Plan for Logistics Centres.

The logistics centres plan, which involves developing 59 hubs across the kingdom, is part of a package of ongoing initiatives to overhaul the transport and logistics sectors first outlined by Prince Mohammed when he launched the National Transport and Logistics Strategy (NTLS) in mid-2021.

The strategy’s ultimate goal is to raise the transport sector’s GDP contribution to 10 per cent from 6 per cent in 2021.

Airport ambitions 

Developing infrastructure will be crucial for the success of the strategy. According to regional projects tracker MEED Projects, there are $195bn-worth of active transport projects in Saudi Arabia.

The most significant subsector is airports, for which $85bn of projects are planned or under way. This is about 43 per cent of the transport total. 

The largest upcoming airport project is the development of King Salman International airport (KSIA), which will ultimately expand and replace the existing King Khaled International airport (KKIA). 

Launched in November 2022, the Foster + Partners-designed masterplan for KSIA involves building the largest airport in the world for passenger capacity. It aims to accommodate up to 120 million passengers by 2030 and 185 million by 2050. For cargo, the goal is to process 3.5 million tonnes a year by 2050.

While design work proceeds on KSIA, the KKIA continues to be upgraded. In June, a joint venture of Turkey’s IC Ictas and the local Al-Rashid Trading & Contracting was awarded the contract to complete the renovation of Terminal 1 and Terminal 2.

The joint venture recently completed the renovation of Terminal 3 and Terminal 4 at the airport.

In August, local contractor First Fix secured a contract to construct a taxiway and apron for cargo, as well as civil and infrastructure works.

There are two other major airport projects planned in the kingdom. A design competition is expected to start later this year for a new Terminal 2 at Jeddah’s King Abdulaziz International airport (KAIA). It will be part of an estimated SR115bn ($31bn) expansion plan to make KAIA one of the world’s largest airports by increasing its capacity to 114 million passengers a year.

Jeddah plans $31bn airport expansion

The other major airport is planned for Neom. US firm Aecom confirmed in March that it had been awarded a contract to provide project management consultancy (PMC) services for the new airport project, which will be built close to Tabuk.

Although not confirmed, it is understood that the first phase of the airport will have the capacity to handle 25 million passengers a year. A second phase could take the capacity up to 50 million. There is an aspiration for the airport to become the largest in the world, with a capacity of 100 million passengers annually. 

Smaller domestic airports are also being developed. In March this year, France’s Egis Group was appointed to provide technical support and project management services for 26 smaller regional airports across Saudi Arabia.

These airport projects will support Saudi Arabia’s new airlines. Riyadh Air, which will fly out of the Saudi capital, was launched earlier this year, and there are also plans to launch Neom Airlines. 

Port projects

There are $16bn of port projects planned or under way in the kingdom.

The largest is the expansion of Duba Port at Neom’s industrial city development, Oxagon. That project, which is already under construction, involves turning a small regional port into a major international port that will initially support construction activity at Neom.

Other port schemes in Saudi Arabia that are planned or under way include the expansion and upgrade of Jeddah Islamic Port, Ras al-Khair Port, King Abdulaziz Port and King Fahd Port.

Mawani implements $950m of Saudi port projects

Rail renaissance 

The ports will connect to Saudi Arabia’s growing rail network. Rail accounts for about 20 per cent of the transport projects total, with almost $40bn of active projects. 

The port at Oxagon will be connected to Neom’s rail network, which will link developments including The Line and the airport. 

Nationally, the largest upcoming rail scheme is the long-awaited Saudi Landbridge project, which involves building railways to connect ports and industrial areas on the Red Sea coast in the west with Riyadh in the centre of the kingdom and the Gulf coast in the east.

Other rail projects planned include high-speed connections between Riyadh and other GCC capitals, including Doha and Kuwait City, urban rail projects in Riyadh and the Saudi sections of the GCC railway network.  

Completing the transport infrastructure roll-out is expanding the Saudi road network. There are $54bn of road projects under development in the kingdom, which accounts for about 28 per cent of the transport total. These highways will provide vital links between the new and expanded airport and ports and the other projects under development in the kingdom.

More related reads:

> National champion Saudi Logistics Services is helping the kingdom meet its ambitious targets
> Neom seeks firms for Oxagon light rail
> Neom concludes air taxi tests
> Gigaproject seeks firms for Riyadh rail link
> Riyadh Air signs Boeing engines deal

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Colin Foreman

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