Explore the transportation industry in Saudi Arabia

21 November 2019, Dubai, UAE: We caught up with Yasser Abdulaziz Al Misfer, Head of Marketing and Corporate Communications
at the Ministry of Transport and Advisor to the Minister, 
 to explore the development of transportation industry in Saudi Arabia and developments in accordance with the Kingdom's Vision 2030.

Gulf Traffic: What is the growth in the transportation sector in the Kingdom of Saudi Arabia?

Yasser Abdulaziz: More than SR400 billion has been invested in transport infrastructure over the last 10 years, resulting in a robust transport network covering all parts of the Kingdom in various modes of transport. Significant additional investments have been made in the railway sector.

The performance of the transport sector is very good in several operational dimensions, but the sector still faces a few challenges.To achieve the aspirations of the Kingdom's Vision 2030, investments are required in the transport network and improvements are needed to raise efficiency. The revenues of some of these investments will be strategic rather than financial, especially with regards to railways.

In line with these visionary aspirations, preparations are being made to develop the national transport and logistics strategy (such as the national tourism strategy, megaprojects strategies, tourism seasons, etc.). The national transport and logistics strategy should be flexible with these variables and should be given the priority to implement important infrastructure projects.The strategy should take into account innovative technologies, trends, and digital transformation when planning the future of the sector.

 

Gulf Traffic: What are the most important decisions that have been taken to develop the local transport system in accordance with the Kingdom’s Vision 2030, and how does the global sector benefit from it?

Yasser Abdulaziz: Non-oil government revenue is expected to increase manifold as financial sustainability will be enhanced through efficient provisions and preservation of assets as well as by increasing the private sector participation in asset development and operation.

  • In the field of asset development and utilization, the Ministry aims at improving the total cost of ownership of transport assets to 20% in 2030 by comparing the percentage of projects with the cost overruns and the percentage of delayed projects.
  • In the area of partnership with the private sector, the Ministry aims at increasing the private sector participation to 16% in 2030 from the original plan of 3% in 2016 in the delivery and operation of transport assets through development and employment.
  • In the KPIs (Key Performance Indicators) of the road transport sector, the percentage of completed projects within the time and budget set for the year 2030 is 30%. In reducing the backlog maintenance, the goal is to eliminate accumulated work by 2020.
  • In the KPIs (Key Performance Indicators) of the railway sector, the target percentage of non-freight income from total revenues in 2030 is 15%.
  • In the KPIs (Key Performance Indicators) of the Maritime Transport Sector, the revenue growth target is 5% per annum.
  • In the KPIs (Key Performance Indicators) of the air transport sector, the division between contract types for project delivery (D-B vs. D-B-B)2 is 50% for each type by the year 2030. 
  • Revenue growth is considered as one of the main initiatives, as it aims to increase revenue from the Saudi Railway Organization and to achieve revenue from the Saudi Ports Authority (Mawani).
  • Cost-effectiveness is regarded as a key initiative. It aims at improving the cost of the road life cycle, enhancing the performance, and improving the system of operation and maintenance of roads, design, and implementing appropriate concessions and contract structures to rationalize the total cost of ownership of assets - aviation sector.
  • Performance improvement is considered a major initiative and aims at addressing and redesigning the structures of contracts awarding for optimal use of port assets.
  • Strengthening governance is a principal initiative that aims at developing rules and regulations for trucks and preparing an integrated strategy for the transport sector and its governing structure.
  • KPIs (Key Performance Indicators) selected from the percentage of private investment out of the total investment in the road transport sector will be determined later. The private sector investment out of the total investment is expected to be 4% in the year 2020. The private sector investment in public transport is expected to be 16% by the year 2030.
  • KPIs (Key Performance Indicators) selected from airports operated by the private air transport sector will reach 100% by year 2030. 
  • The mainland transport initiatives are to generate revenues from road assets.
  • Air transport initiatives aim at reducing reliance on public funding by increasing participation, improving strategic partnerships with the private sector, and stimulating economic growth through the air transport industry.

Gulf Traffic: What are the departments of the Ministry that constitute the biggest concern?

Yasser Abdulaziz: The Ministry gives special attention to several departments, including those related to maintenance and safety, survey and evaluation management, and emergency and disaster management.

 

Gulf Traffic: Can you give us a glimpse into your participation in Gulf Traffic this year?

Preparations are being made to develop the national transport and logistics strategy. As far as partnership is concerned, the private sector participation in the delivery and operation of transport assets is going to be increased to 16% by 2030. The Ministry has partnered with private and government agencies to launch traffic awareness campaigns. In the future also many such awareness drives have been planned.