SISCO’s Red Sea inks 30-year contract with Mawani to develop Jeddah Islamic Port

Red Sea Gateway Terminal Limited (RSGT), a 60.6%-owned subsidiary of Saudi Industrial Services Co. (SISCO), signed a 30-year concession contract valued at SAR 6.6 billion with Saudi Port Authority (Mawani) to develop and operate Jeddah Islamic Port (JIP).

The new build, operate, and transfer (BOT) contract will come into force in 2020, replacing the current agreement, SISCO said in a bourse statement on Monday.

Under the deal, RSGT will redevelop the northern part of the JIP, which will include the adjacent container terminal and RSGT’s existing terminal to become the largest container terminal in Saudi Arabia and on the Red Sea.

For the first phase, RSGT is required to initially invest SAR 1 billion to consolidate and develop the infrastructure of the new terminal over the coming three years, raising the terminal’s total capacity to 5.2 million TEUs.

Further investments worth SAR 5.6 billion will be injected over the remaining contract term, increasing the total capacity to 8 million TEUs.

SISCO noted that the project will be funded by Sharia-compliant debts and the revenue generated from RSGT’s operations.

Moreover, the agreement is expected to have a positive impact on the company’s financials during the second quarter of 2020.

It is worth noting that RSGT has already invested SAR 2.5 billion in the current concession since the container terminal project started in 2007.

Earlier in December, RSGT received the approval of the Supervisory Committee of Privatization in the transportation sector to sign an agreement for developing and operating JIP.

In January, RSGT and the Saudi Ports Authority (Mawani) signed an MoU to develop a comprehensive long-term plan for the development of JIP.