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Saudi-Chinese Talks to Discuss Linking Arabian Gulf with Red Sea

Saudi-Chinese Talks to Discuss Linking Arabian Gulf with Red Sea

Friday, 13 December, 2019 - 11:15

The Saudi Ministry of Transport has revealed that talks are underway with a company owned by the Chinese government to discuss linking the Arabian Gulf and the Red Sea through Saudi lands.


It is part of a giant project the Kingdom seeks implementing as part of its strategic plans in transport and logistics.


Saudi Arabia plans to launch public-private partnership (PPP) transport projects worth tens of billions of dollars in 2020, under an ambitious strategy to diversify the economy and create jobs, the newly appointed transport minister told Reuters.


To reduce dependence on oil revenues, Riyadh aims to have the private sector operate much of its transport infrastructure, including airports and sea ports, with the government keeping a role as regulator.


The government expects real economic growth of 2.3 percent next year, supported by non-oil sectors.


“Saudi Arabia has an impressive transportation and logistics infrastructure, where about SAR400 billion ($106.7 billion) have been invested in the last 10 years only,” Minister Saleh bin Nasser al-Jasser noted.


He explained that the plan is to continue investing while increasing private sector participation.


The ministry is also planning a railway project linking Dammam in the Eastern Province to the Red Sea city of Jeddah through the capital, he was quoted as saying.


“The funding will come through the private sector, either through PPP or government-to-government...these are big projects worth tens of billions of riyals.”


Riyadh has set a goal of generating SAR35 billion to 40 billion ($9.3 billion to $10.0 billion) of non-oil state revenues from its privatization program by 2020.


Some of that money would come from asset sales, while the rest would come from public-private partnerships.


The transportation sector is one of the National Industrial Development and Logistics Vision Realization Program’s (NIDLP) pillars.


This program aims to transform the Kingdom into a leading industrial hub and an international logistic platform in a number of promising areas.


This would contribute to generating ample job opportunities for Saudi cadres, enhancing the trade balance and maximizing local content.


It focuses on four main sectors, namely industry, mining, energy and logistics.


In March, a Saudi official told Reuters that six public-private partnership deals worth around $3.5 billion were sealed in Q1 2019 and at least 23 more are expected by 2022.


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