The Saudi Ports Authority (Mawani) and Dubai’s DP World have announced the signing of a contract for the construction of a logistics park at the Jeddah Islamic Port.
The 30-year deal seeks to build a logistics park that extends over 415,000 square meters, with an in-land container depot capacity of roughly 250,000 TEU and a warehousing storage area of 100,000 square meters. The investment value of the agreement is more than SAR500m ($133.33m).
Potential future expansions could increase the storage space to 200,000 square meters, a statement said. The purpose-built facility will bolster DP World’s footprint in the region and will bring pioneering multi-modal logistics solutions to the kingdom. The port-centric logistics park will boost Jeddah Islamic Port’s re-export activities, reducing the time and cost of logistics for both importers and exporters.
It will provide an integrated platform of services that link port operations with last-mile activities, providing temperature-controlled storage for cargo, in addition to its processing, labeling, fulfillment, consolidation, and de-consolidation.
Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, commented: “We are proud and honored to contribute effectively towards the achievement of Vision 2030, which includes the development of a prosperous and sustainable maritime transportation ecosystem that supports the kingdom’s socio-economic ambitions and consolidate its status as a global logistics hub. On this occasion, we reiterate our commitment to investing in the modernization of this facility by providing the highest standards of logistics services and technology-enabled trade solutions.
“We are committed to enhancing the role and the status of Jeddah’s Islamic port, which is strategically located on the Red Sea and has historically played a pivotal role in facilitating the movement of trade between the East and the West. A key part of our strategy as an end-to-end supply chain solutions provider is to package logistical services for our customers and bridge any existing gaps in the market. Facilities like these will enable us to make deeper inroads into the kingdom, by extending our collaboration with leading logistics service providers,” Bin Sulayem added.
Omar Hariri, president of Saudi Ports Authority, said: “The park will provide advanced and eco-friendly e-services by integrating the operations of the south container terminal with the new logistics park, in a move from the Authority to offer holistic logistics parks which will enhance the competitiveness of Jeddah Islamic Port. It will also contribute to raising the quantities of trans-shipped goods, in line with the national strategy for transport and logistics services.”
“This partnership will connect the port’s operations to the new logistics park to offer end-to-end logistics services with high efficiency. It will also help us expand our joint collaboration further with major logistics service providers, enhance the re-export operations and cut costs of the logistics services in order to provide the best-in-class services to stakeholders and investors.”
DP World signed a new concession agreement with Mawani in April 2020 to continue operating and managing the South Container Terminal at the Jeddah Islamic Port for the next 30 years, committing to invest a total of more than SAR3bn ($800m) to expand and modernise the terminal.
The overhaul project, which will take place over four phases and is set to be completed by 2024, will see infrastructural upgrades, including the broadening of draft depth and quay, and the installation of advanced equipment and technologies, automation and digitalisation programmes, in addition to decarbonisation initiatives. When complete, the revamped terminal will double Jeddah Islamic Port’s container handling capacity from 2.5 million TEUs currently to 4 million TEUs and solidify Jeddah Islamic Port standing as a major trade and logistics centre on the Red Sea coast.
Last month, Caisse de Depot et Placement du Quebec agreed to invest $5bn in DP World’s Dubai assets as the port operator looks at ways to reduce its debt.
