Interview: Nabeel Al Amudi
To what extent has privatisation played a role in the development of port operations ?
NABEEL AL AMUDI: Since the creation of the SPA almost 40 years ago, the privatisation of port operations has taken different shapes. The last two privatisation projects were carried out on a build-operate-transfer basis, one in Jeddah and one in Dammam. This model has been implemented by the SPA as part of its recent privatisation efforts. Overall, the privatisation efforts have been a success, although more needs to be done. For the next phase of concession projects, to be concluded in 2019 and 2020, we plan to ramp up privatisation structures in terms of expansions and renewals. The next level of privatisation will be advanced public-private partnership models featuring revenue-sharing structures, and more concessions driven by key performance indicators (KPIs) focused on increasing the efficiency of operations at the ports. However, the model will still be based on 20-30-year concession agreements. The more difficult part will be centred on how to better spend on basic infrastructure, which is a low-return area, currently undertaken by the SPA. We will look for private sector involvement for these types of projects.
What incentives are offered to international shipping lines looking to set up port calls in the region?
AL AMUDI: The Kingdom is blessed with the largest economy in the region, and thus is a natural call for international shipping lines. To attract more cargo, we need to improve the efficiency of processes at our ports in clearing cargoes and the related paperwork. As I stated earlier, the biggest benefit of our ports is the direct access to the domestic economy, which is robust and expanding. Our trans-shipment volumes could be larger but will, by and large, remain a by-product of origin-destination cargo. Shipping lines will look at how much time their ships stay in port, and the efficiency of operations run by the concessionaires. Many of our concessionaires have demonstrated the highest global standards, and others will need to make new investments to compete. On the process side, our focus is increasing transparency, automating the workflow and implementing a port community system. This will establish a one-stop shop for all public and private entities that are seeking to manage their complete document work-flow. We are also implementing an aggressive KPI on reducing the 10-11 days it takes for cargo to come into the country and to decrease it by 50%, with more aggressive plans soon thereafter.
How can the SPA ensure new private players entering the sector drive overall sector growth?
AL AMUDI: The National Transformation Programme is bringing all players together to advance toward one structured vision for the future of Saudi Arabia. The plan will make efforts to turn the Kingdom into a logistics centre and, within this mandate, there is a KPI to reduce dwell time. The key will be transparency in the first instance and, thereafter, measuring real performance. In terms of projected business for new ports, such as King Abdullah Port, there is plenty of capacity on the Red Sea for all stakeholders. There will be increased competition between ports, but this will boost our efforts to improve efficiency.
What efforts are under way to transform the Kingdom’s Red Sea coast into a logistics hub?
AL AMUDI: As we revise concessions, we will implement upgrades of existing facilities to allow for deeper-draught ships, newer cranes and more efficient operations. With no major bottlenecks on the sea side of things, our aim is to address land bottlenecks. Also, master planning for the Jeddah area, including Jeddah Islamic Port, Yanbu Commercial Port and the King Fahad Industrial Port, will balance the flow of goods from one port to another to maximise efficiency.
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