RIYADH (Reuters) - Saudi Arabia launched on Sunday a new logistics zone open to private investors in the Red Sea port city of Jeddah, as part of a wider industrial initiative to diversify the economy away from oil and create jobs for Saudis.
The al Khomra zone - which will support activities around shipping, freight distribution and transport of goods - extends over 2.3 million square meters in Jeddah, home to one of the kingdom’s largest ports.
As the biggest logistics zone in the country, it hopes to turn Saudi Arabia into a global logistics hub and create 10,000 direct jobs, said Minister of Transport Nabeel al-Amudi.
It is part of the broader National Industrial Development and Logistics Program (NIDLP), which aims to create 1.6 million jobs and attract investments worth 1.6 trillion riyals ($427 billion) over the next decade. Of that, 135 billion riyals is earmarked for investment in the logistics sector.
Under its ambitious reform strategy, the kingdom plans to have the private sector operate much of its transport infrastructure, including airports and sea ports, with the government keeping a role as regulator.
Details of what the government plans to offer investors in al-Khomra were not disclosed, but the Saudi Ports Authority said the zone would offer opportunities to investors on a lease basis.
“Investment in the logistics zone in al-Khomra and other ports will total 7 billion Saudi riyals,” said Saad al-Khalb, president of the Saudi Ports Authority, without giving further details.
Al-Khomra joins other logisitics zones in the kingdom - the King Abdullah Economic City north of Jeddah has its own port and offers logisicts investments and NEOM, a mega project announced in 2017, has plans for a logistics zone.
Over a decade ago, Saudi government spent $30 billion to build six economic cities across the kingdom to diversify the economy, create jobs for young Saudis and attract foreign investment, though many of the projects have failed to achieve expected results.
After decades of spending on development projects, the government has made attracting greater foreign investment a cornerstone of its Vision 2030 plan.
But foreign investment has failed to live up to the government’s ambitions, especially after the murder of journalist Jamal Khashoggi at the hands of Saudi agents in October 2018 strained ties with Western allies.
Reporting by Marwa Rashad; Editing by Deepa Babington