Connecting continents and enabling growth: Saudi Arabia’s role as an emerging hub for transport and logistics

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Connecting continents and enabling growth: Saudi Arabia’s role as an emerging hub for transport and logistics

 

Transport and logistics play a key role in unlocking the Kingdom’s economic potential and achieving the goals laid out in its Saudi Vision 2030 economic blueprint. Highlighted as one of the plan’s three essential pillars, Saudi Arabia is committed to transforming its unique geographic position into a strategic global hub.

 

Set at the crossroads of Africa, Asia and Europe, the Kingdom’s central location between important trading routes across East and West, and North and South, makes the Kingdom of Saudi Arabia an epicenter for trade and a gateway to the world. 50 percent of the world’s population is within a five-hour flight from Saudi Arabia, and some 13 percent of all global trade flows through the Red Sea.

 

Leveraging this natural competitive advantage, the government of Saudi Arabia is entering into a new series of international partnerships and working with the private sector to enhance, develop and connect its transport and logistics infrastructure across the Kingdom and beyond its borders.  Saudi Arabia’s budget for the 2018 fiscal year included an 86 percent increase in planned government expenditure on infrastructure and transportation –  from $US$ 7.7 billion to US$ 14.4 billion.  

 

Under the Vision 2030 plan, Saudi Arabia is also making progress towards meeting the burgeoning demand for public transit services. By 2030, the government plans on completing an additional 10,000 kilometers of rail and metro projects. Five key projects have already received a greenlight, including the Riyadh metro project which has an allocated investment of more than US$24 billion and is scheduled to commence operations later this year.

 

To ensure that the completion of these projects, the government is seeking to expand the role of the private sector. By next year, the target is for private sector companies to handle the development, operation and maintenance of 5% of roads, 50% of rail networks and 70% of Saudi Arabia’s seaports.

 

The government is pushing ahead with multiple public-private partnerships, joint-ventures and build-operate-transfer schemes, while a number of the Kingdom’s publicly operated transportation facilities are set readied for full privatization by 2030. Furthermore, in 2018 plans were approved to develop a unique regional logistical hub in the country, which will facilitate the assembly, processing and movement of goods.