Interview: Suleiman Al Hamdan
What are the main objectives of the privatisation of the Kingdom’s airports?
SULEIMAN AL HAMDAN: We have several primary objectives in privatising the Kingdom’s airports. We aim to raise the level of services provided by the airports and other sectors for our clients. The airports will work according to a set of competitive criteria that will enable them to maintain financial and sustainable growth. It will also reduce overall expenses, especially in the areas of operations and maintenance. This in turn will help achieve the highest possible return on assets for the General Authority of Civil Aviation. Privatisation will increase productivity, shorten the completion times for projects and allow us to keep up with the rapid developments in air transport technology. This will come from cooperation with specialised international commercial operators. Overall, it will generate more investment opportunities for the private sector.
How is Saudi Arabia planning to leverage its unique geographic position to establish itself as a trans-shipment and logistics hub?
AL HAMDAN: The ministry is implementing a number of initiatives to better connect transport modes and enhance logistics services for greater integration with the global transport network. We are working to reduce institutional barriers and implementing a more efficient Customs system. We are also improving the capabilities of our ports and developing them as logistics gateways through the use of multi-modal and intermodal transport. Supporting this is the development of railway networks for long-distance overland transport, as well as port services and medium- to short-distance road transport.
The development of a multi-modal and intermodal logistics network, appropriately connected to Saudi Arabia’s Red Sea ports, will open up a new range of opportunities for container distribution, and may be able to service neighbouring countries in Africa, the Arabian Peninsula and perhaps even as far as Asia. On the Gulf side, the Port of Dammam will also become a logistics gateway for the region, particularly with the implementation of both the Landbridge project that will connect the eastern and western parts of the Arabian Peninsula, and the GCC railway line.
Building adequate logistics centres will increase access to intermodal transport. The development of dry ports for inland container handling will support national and international multi-modal transport and promote international transport services such as sea and air. The establishment of those centres and their services could be done by the private sector or in partnership with a private operator.
What role will the Kingdom’s expanding rail network play in supporting non-oil economic growth?
AL HAMDAN: Rail would allow us to link quickly and cost-effectively the eastern and western coastal ports, bypassing the lengthy and costly shipping trip around the Arabian Peninsula. This would allow for a greater advantage vis-à-vis shipping lines, which would be able to choose where to best offload their cargo, making us a logistics centre of choice. Rail would also allow us to move more passengers at a lower cost between the holy sites and other key tourist destinations. Road transport, or even air transport, cannot compete with rail on that front. Countries like France have long substituted air, or even road transport, with high-speed links to connect major centres.
Rail is the mode of choice to move thousands of tonnes of ore from mines to smelters and refiners located in coastal areas. Saudi Arabia is rich in important mineral resources in the northern heartland and refineries on coastal areas that are thousands of kilometres away. The expanding rail network is the backbone of three core sectors that are driving the Kingdom’s diversification away from oil. In that regard, we have started to work on many projects.
