Keys to the Kingdom

zoom

PORT OPERATIONS: Congestion has emerged as a concern for Saudi Seaports Authority.

Whilst industry reports have forecast a bright future for Saudi Arabia's maritime industry, does the Kingdom have a suitable transportation infrastructure to handle unprecedented growth in cargo volumes?

The growth of Saudi Arabia's maritime sector has continued at full pace in 2008, primarily fuelled by the Kingdom's numerous port developments and a sustained boom in the local consumer market.

As a result, the volume of cargo being handled at Saudi Arabian ports is hitting record highs, rising by 13.5% during the first six months of the year, from a combined tonnage of 11.4 million in January 2008 to 13.4 million in July 2008.

With such robust growth, it's hardly surprising that the Kingdom has established itself as an attractive proposition for both regional and international investors, all scrambling over themselves to capitalise on this continued economic boom.

In particular, Jeddah Islamic Port has emerged as Saudi Arabia's principal seaport, handling approximately 60% of the Kingdom's sea freight imports.

Although this success should be celebrated, the facility has almost become a victim of its own success, with traffic build-up becoming such a concern that shipping lines were reportedly skipping Jeddah Islamic Port and unloading their cargo at alternative, less congested facilities.

Taking action before the situation reached a detrimental and potentially critical stage, Saudi Seaports Authority (SSA) recently announced a US$140 million development programme, involving the construction of three additional wharfs in the northern container terminal, together with a series of infrastructure enhancements to speed the cargo handling process.

"Jeddah Islamic Port has experienced a record period of growth in 2007, with around four million containers being handled. This is a sizeable increase over 2006 and we want to reach six million containers in the near future," says Dr Khaled bin Ahmed Bubshait, SSA's president.

"Studies are currently underway for an expansion, which will increase the capacity to handle larger ships and containers. This includes the ongoing construction of the third container station in the north west of the port, which will cost approximately half a billion dollars, with a capacity to handle up to 1.5 million containers."

Investments have also been earmarked for the Kingdom's other leading ports, including King Abdulaziz Port in Dammam, which ranks second among the commercial ports in volume, and Jubail Commercial Port in the Eastern Province of Saudi Arabia.

Although smaller in size compared to a number of its counterparts, Jubail Commercial Port has received a significant amount of attention in recent years, helping to alleviate the burden on King Abdulaziz Port, which is 80 kilometres to its north, for both import and export shipments.

"Saudi Arabia has envisaged an investment of $8 billion on modernising its ports, which will be done with the participation of the private sector. The development of seaports is essential to future growth," admits Bubshait.

The development programmes have been heralded by traders affected by the congestion, many of whom have openly spoken about their concerns.

In particular, a proposed strategy to divert ships bound for Jeddah Islamic Port earlier this year received a lukewarm response from the local business community.

Print | Email | Discuss this article |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM