Saudi Industrial Services (Sisco) has inked an memorandum of understanding (MoU) with Saudi Ports Authority to further develop Jeddah Islamic Port (JIP) on a long-term basis, a bourse filing has revealed.
Under the deal, Red Sea Gateway Terminal Company (RSGT) will consolidate the container facilities in the northern part of JIP.
The Sisco subsidiary will also “execute a comprehensive development plan – upgrading and adding berth capacity while modernising yard and all support facilities, including RSGT’s existing terminal”.
According to Sisco’s filing on Tadawul, the move will create a “world-class facility capable of servicing the important local market, while also catering for the growing regional transhipment trade”. The latter is a key tenet of Saudi Arabia’s plan to position itself as a key logistics player in the region, as per its Vision 2030 strategy.
RSGT is the first container terminal in the kingdom built by the private sector under a build, operate, and transfer (BOT) agreement. It cost more than $544.5m (SAR2bn) to build and has a capacity of 2.5 million TEUs.
Moreover, it is the only terminal at JIP capable of fully accommodating ultra-large container ships of 14,000+ TEU capacity. Sisco said it is “consistently rated as one of the best performing terminals globally”, noting that RSGT volumes in 2018 grew by more than 16% as compared to 2017.
Notable developments are under way by key players in the region’s shipping market, including the Nasdaq Dubai-listed DP World.
In January 2019, the state-owned port operator entered an agreement to buy a majority stake in Chilean port operator Puertos y Logistica for $502m, taking control of two key port terminals in the South American state. Not long after, DP World announced it had increased its stake in its Australian unit from Gateway Infrastructure Investments, as well as other investors.