1997 News Story

Ports Authority to privatize certain services

Custodian of the Two Holy Mosques King Fahd Bin Abdul Aziz yesterday approved a new system whereby the private sector would take over on a commercial basis the operation, maintenance and management of all docks and equipment affiliated to the Ports Authority.

In the statement he issued last night, Minister of Finance and National Economy Dr. Ibrahim Al-Assaf said the objectives of this arrangement are to provide greater efficiency and flexibility for importers and exporters, and to enhance foreign trade.  Privately-managed services would permit a more effective utilization of the strategic location of Saudi ports in the context of a rapidly-changing marine trade.  At present, he went on, the Kigndom has the most extensive port facilities in the Middle East, accounting for more than 65 percent of all GCC consignments by sea.  The Kingdom’s seaports are well-equipped and sophisticated, and handle 95 percent of the country’s exprots and imports.

The services to be contracted out include the maintenance and operation of berths, containers and storage facilities.  Approval for the arrangement, which provides guidelines for tenders for these operations, is based on a thorough and intensive study conducted by the Ministry of Finance and National Economy, the Ports Authority, and related agencies, which came to the conclusion that contracting-out these services would lead to greater efficiency and higher revenues, would provide more employment opportunities for Saudis, and would further enhance the competitiveness of Saudi ports.  The Ports Authority itself will continue to be state-owned, and will perform supervisory and regulatory functions.  There will be no change in port charges.