A subsidiary of PSA International has signed a $2.6 billion deal to become the sole container terminal operator of the King Abdulaziz Port in Dammam.
Saudi Global Ports (SGP) said it has inked a new build, operate and transfer agreement with the Saudi Ports Authority (Mawani) for two container terminals at the port.
The company will develop and modernise the port into a mega container hub with a higher annual handling capacity of about 7.5 million twenty-foot equivalent units.
SGP estimates a total outlay of more than 7 billion Saudi riyal (S$2.6 billion) in the project, which will make it the largest seaport investment by a single operator under a public-private partnership.
The agreement was signed at a virtual ceremony on Monday amid the coronavirus pandemic, witnessed by Singapore's Transport Minister Khaw Boon Wan, SGP said in a statement.
Mawani president Saad Abdul Aziz Al-Khalb said: "Under this agreement, SGP will invest and develop key infrastructure such as berths and container handling equipment, and will more than double the existing container handling capacity of King Abdulaziz Port in Dammam."
Under the patronage of Prince Saud bin Nayef bin Abdulaziz, governor of the Eastern Province, the agreement was signed between the Mawani president and SGP chairman Abdulla Al Zamil.
The virtual ceremony was also witnessed by Saudi Arabia's Minister of Transport Saleh Al Jasser and Singapore's Senior Minister of State for Trade and Industry, Dr Koh Poh Koon.
Key officials from the Singapore Embassy to Saudi Arabia, the Public Investment Fund, which is the majority shareholder in SGP, and PSA International also witnessed the ceremony.
The Public Investment Fund is Saudi Arabia's sovereign wealth fund.
Referring to the deal, Mr Khaw said in a Facebook post: "Doing so in the midst of the Covid-19 pandemic is to reflect our joint commitment to keep the global supply chain intact, so that cargoes can move from exporters to importers without disruption."
He noted that if ports and shipping networks are frozen, how can masks and medicine reach the patients?
"Global solidarity will defeat the virus. Divided, many unnecessary lives will perish," he said.
Mr Tan Chong Meng, group CEO of PSA International, thanked Mawani and Saudi Arabia for trusting PSA to deliver another significant investment.
SGP now operates a container terminal located along the eastern coastline of King Abdulaziz Port, which is an important deep-water hinterland port in the Arabian Gulf serving the major provincial cities in the eastern and central provinces of the kingdom.
SGP chairman Mr Zamil said: "SGP's development of large-scale, efficient and modern container terminal operations in Dammam Port is an important element of the kingdom's objective of developing the necessary logistics infrastructure to facilitate and promote the diversification of the kingdom's economy into a leading industrial powerhouse."
