Saudi Arabia’s transport sector enjoys a geographical competitive advantage with its accessibility to major emerging markets and important marine passages. This sector is about to experience unprecedented improvements that will take transport services to the next level. Key 5 new airports in the pipeline, as well as key extensions to Jeddah and Riyadh and 17 other airports that are already underway. Ground networks are also considerable, spanning hundreds of thousands of kilometers of roads and thousands of kilometers of railways that are subject to major refurbishment and expansion. Exciting opportunities await investors who are keen to contribute to the new transportation model or to benefit from the additional access that it manifests.
Government commitment to grow the sector including an urban transportation system such as metros and buses, freight, and high-speed railways as well as several expansion opportunities in all various transport verticals. The importance of the private sector role is highly considered by the government and several initiatives started to encourage the collaboration of the private sector in all rail, roads, and Saudi ports.
Saudi Arabia’s strategic location puts it at arms distance from a vast array of global consumers. Most European markets are under 7 hours flight time away and Asian markets are generally just a 4-hour plane journey from KSA. Half the world’s population lives within a 5-hour flight from the Kingdom, connecting it to a regional market consisting of more than 3.5 billion potential customers over three continents. KSA’s central location also provides it with a cost advantage in the Arabian Peninsula, North Africa and East Africa. Cost distribution advantages of more than 10% exist for Greater Arab Free Trade countries (GAFTA) and to nations within the Arabian Peninsula, enabling favorable conditions for the movement of goods between the regions.
Saudi Arabia’s maritime network is unrivaled in the Middle East, handling a capacity of approximately 8 million twenty-foot equivalent containers (TEUs) per year and receiving 11,000 ships annually. The network consists of 10 primary harbors for non-oil trade, 200 piers, 216 berths and 6 leading container ports located along a critical intersection of the East-West shipping routes.
Saudi Arabia’s aviation infrastructure is extensive, efficient, and robust, comprising of 6 international, 9 regional and 12 domestic airports. Three of its airports are amongst the busiest in the GCC, transporting the bulk of the 80 million passengers who pass through the Kingdom on a yearly basis.
The Kingdom has one of the largest road networks in the world covering more than 200,000 KM of roads, including 66,000 km of roadways connecting major cities and providing access to railways, ports and airports. This vast and growing ground network benefits from 5,000 km of highways and 6,000 km of bridges, providing extensive means to transport passengers and goods in and around the Kingdom.
The government is highly committed to develop its well-equipped logistics infrastructure that is in the process of modernization and adaptation through regulatory reform and massive investments in logistics infrastructure.
Plans have been announced to invest SAR 112.5 billion (USD $ 30 billion) in upgrading facilities that will enable the Kingdom’s ports to compete at a global level. SAR 159 billion (USD $ 42.4 billion) has been set aside to develop KSA’s first private port; ‘King Abdullah port’, which is expected to handle 20 million TEUs by 2020. The Kingdom is also investing SAR 337.5 billion (USD $ 90 billion) developing its vast road and railway infrastructure.
Furthermore, Saudi Arabia is developing 6 economic and industrial cities that are designated to move cargo freely between one another. KSA’s industrial output already constitutes a share of 90% in non-oil exports, which means the logistics industry is about to receive a major boost when it settles into its new streamlined industrial city super-hubs.
[source: “Saudi General investment Authority” data]