With more than seven million inhabitants, Riyadh is the largest city in the Arabian Peninsula and the capital of the Kingdom of Saudi Arabia (KSA). Riyadh is more than 400 km from Dammam, its nearest port and the current gateway for most of Riyadh’s trade with the rest of the region and world.
These cities are connected by the Dammam-Riyadh railway line, which is owned and operated by the Saudi Railways Company (SAR). Rail services between the Dammam Sea Port and the Riyadh Dry Port have dominated import logistics for the Saudi capital since the arrival of the era of containerisation (with market share of more than 65% of imports), positioning the Sea Port-Railway-Dry Port ecosystem as a critical corridor for the city’s economy.
The Riyadh Dry Port had been operated by a consortium led by the Bass International Group (BIG) since 2012, under a 10-year concession contract from the Saudi Railways Organization (SRO), which was incorporated into SAR in April 2021.
This concession also included an Empty Yard in Dammam used to support the handling of empty containers returned from Riyadh. Months before the finalisation of BIG’s concession contract, the National Center for Privatization (NCP) initiated a process to engage a new operator for the Riyadh Dry Port. This process aimed to increase its current capacity and enhance the commercial and operating capabilities of the ecosystem. SAR was to take over the role of grantor once SRO was integrated into it.
Objectives, goals and purposes
ALG was selected as the technical and commercial advisor by NCP to support the process for the Riyadh Dry Port.
Study methodology and activities
- Preparation of a business case for the upcoming concession period, covering the strategic approach, demand forecasts, concept design and infrastructure interventions, the operating and commercial plan, and the implementation requirements.
- Support in defining the procurement strategy, and the commercial structuring and economic structure established for the transaction.
- Market soundings and shortlisting of potential bidders for the opportunity.
- Preparation and evaluation of requests for proposals.
- Support in the negotiation and closure of the terms and conditions of the transaction.
- Leading and implementing the transition from the incumbent operator to the new operator, supporting the activation of the new concession agreement.
Success and outcomes
The transaction was successfully executed within the target timelines, engaging with Saudi Global Ports (PSA Group), which would lead the transformation and operation of the site for the next 10 years. The agreement included investment commitments to multiply the capacity and performance of the site, in accordance with best international practices in terms of quality, safety, health and the environment, and to meet the country’s objectives to increase local capabilities.