Saudi Arabia has launched a new logistics zone in the Red Sea port city of Jeddah that will be open to private investors, Minister of Transport Nabeel al-Amudi said on Sunday. The move is being carried out as part of a broader initiative aimed at diversifying the economy and moving away from heavy reliance on oil.
The al Khumra area will reportedly extend over 2.3 million square metres and will be the largest logistics zone in Saudi Arabia, supporting shipping, transportation, and distribution of goods. The authorities hope that the initiative will turn Saudi Arabia into a global logistics hub, create thousands of additional jobs in the country, and generate opportunities for investors on a lease basis.
"Investment in the logistics zone in al Khumra and other ports will total 7 billion Saudi riyals", said Saad al-Khalb, president of the Saudi Ports Authority, as quoted by Reuters.
The launch of a logistics zone comes amid the broader National Industrial Development and Logistics Programme (NIDLP), which has set a target to create 1.6 million jobs in the country and attract investments worth 1.6 trillion riyals ($427 billion) over the next 10 years. Out of this, $36 billion is intended to be used for investments in the logistics sector.
The government also aims to reform transportation in the country by trying to push the private sector to operate Saudi airports and sea ports, with the authorities acting as a regulator.
10 years ago, Riyadh had already spent $30 billion on building six economic cities across the kingdom in a bid to make the Saudi economy more diversified, attract foreign investments, and create new jobs for the population; however, many of its projects have failed to achieve significant results.