MMC secures RM2billion Saudi Port deal

KUALA LUMPUR, Nov 5 (Bernama) -- MMC Corporation Bhd today signed an agreement to acquire rights to jointly develop and operate Tusdeer Container Terminal (TCT), the third container terminal at Jeddah Port, Saudi Arabia, together with partners Saudi Industrial Services Company, Xenel Industries Ltd and Saudi Trade and Export Development Company.The new TCT will comprise three berths with a capacity of 1.5 million TEUs (twenty-foot equivalent units) and cost about SAR 2 billion (SAR 1.00=RM0.90), MMC said in a statement here.Construction is expected to begin in early next year and be fully completed by 2010, the company said.MMC group chief executive Feizal Ali said the deal will further expand the company's footprint internationally in the ports business and complement its strategic focus in Saudi Arabia and other countries in the Middle East and North Africa."We will leverage on our experience in developing and managing our two ports in Malaysia and replicate our success in one of the most dynamic regions in the world," he said.The deal will involve MMC acquiring the entire equity interest in City Island Holdings Ltd through its wholly-owned subsidiary MMC International Holdings Ltd.City Island currently owns the rights to jointly develop and a 30-year concession to jointly operate TCT until 2039, together with its Saudi partners.The deal comes exactly one year after MMC was awarded the rights to develop and manage the new US$30 billion Jazan Economic City in Saudi Arabia on Nov 5 last year.Jeddah Port is centrally located along the Red Sea, close to the southern entrance of the Suez Canal, one of the world's most important international waterways, which handles over 30 percent of global container trade.Feizal said MMC is optimistic about the opportunities brought about by Saudi Arabia's vibrant and rapidly growing economy as well as those in the surrounding region.He said the Red Sea region has seen strong throughput growth, with volumes increasing from 1.15 million TEUs in 1995 to 4.48 million TEUs in 2005, an average growth rate of 14.6 percent."Jeddah Port itself has seen strong throughput growth from both its hinterland areas as well as transhipment. This trend points to a need for Jeddah Port to expand to accommodate future growth. According to forecast, we are expected to break even in the third year of operations," he added.