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Mon 20 Jun 2011 05:48 PM

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Saudi Arabia to spend $613m to expand ports

Kingdom's second-largest port in Dammam to double capacity over next three years to hold 3m containers

Saudi Arabia to spend $613m to expand ports
(Image for illustrative purposes only)

Saudi Arabia plans to raise the capacity of its
second-largest port in Dammam and may spend more than $613m on port expansions
to rival other regional ports, its transport minister said on Monday.

"All ports are subject now to expansion. We are
investing now SR2.3bn ($613m) for projects in all the ports and we always
continue increasing, particularly the industrial ports in Yanbu and
Jubail," Jobarah Al Suraisry said.

"The next budget will be coming in five or six months
and we will see more projects," he said, without giving more details.

The world's largest oil exporter, which is trying to
diversify its economy away from oil, currently has nine ports, with around 200
docks, Suraisry told reporters in Jeddah.

The largest Saudi port is Jeddah Islamic Port (JIP) on the
Red Sea, which has increased its capacity to around 5 million TEU (twenty-foot
equivalent units), after it opened the new Red Sea Gateway (RSG) terminal at
the end of 2009.

Suraisry said he believed that despite the downturn in the
global economy, the JIP will see at least a 5 percent increase in traffic this
year.

JIP handled 3.9 million TEU in 2010, according to data from
the Saudi Ports Authority.

The kingdom's second-largest port in Dammam will also double
its capacity over the next three years to hold 3 million containers, Suraisry
said.

He did not give an estimate for the cost but said the
expansion is to be carried out jointly by the Saudi Public Investment Fund and
Singapore port operator PSA.

Saudi Arabia is currently undergoing multi-billion infrastructure
projects including $400bn to be spent in the five years to 2013, and over $130bn
to be spent on social and infrastructure projects.

A port catering to grains imports is to be built by the
private sector over the next two to three years, Suraisry said.

"The intention is for the government to provide the
land and the private sector to construct the project," he said, adding
that Saudi investors had shown interest in the project.

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