JEDDAH, 6 May — The Jeddah Islamic Port (JIP) is soon to become a major hub in the Middle East-Africa region with its first Bonded and Re-Export Zone (BRZ) becoming operational.
With this, the JIP will attract cargo from all over the world for transshipment to ports overseas, especially in the Middle East-Africa region, according to Saleh A. Hefni, president of Saudi Trade and Export Development Co. (TUSDEER) and president and managing director of Saudi Industrial Services Co. (SISCO).
TUSDEER, which has been specifically established to develop and operate the ambitious BRZ at the JIP, entered into a 20-year agreement with the port authority four years ago to reclaim nearly 1 million square meters of land.
The project is being executed in four phases on a build, operate and transfer (BOT) basis. Its first phase, covering 240,000 square meters, is designated for vehicle storage of major car dealers. The phase also envisages 32 warehouses, each 500 square meters. All of them have been leased to local and international firms dealing in food, electronics and other commodities. Phase One also includes a container yard for storage of full and empty containers.
The three other phases are due to be completed and become operational by the end of this year. Phase two will provide container services, phase three warehousing and phase four assembling and re-packaging.
“The zone’s development goes in line with the process of port privatization,” Hefni said in an interview with Arab News yesterday.
JIP, the largest and most modern seaport in the Middle East, is equipped with the latest berthing and handling facilities. Its performance rivals that of the world’s busiest and greatest ports. The port handles 1.5 million containers a year and has the facility to dock and unload 10 large container vessels simultaneously. It is against this background that the BRZ is seen as an excellent new business opportunity with growth potential to tap the one billion strong African-Middle East region, Hefni said. He added that the leaseholders could construct buildings in the zone provided they follow the design and specifications of TUSDEER.
“There is no payment of customs duty involved on the goods kept in the zone. In case of splitting a bill of lading, customs duty will be charged according to the exchange rate prevailing on the day goods are cleared,” he said, emphasizing that the customs had the right to inspect the cargo before cleared into the Kingdom and to process all necessary documents within the zone. While labor was available in the zone, heavy equipment could be provided by TUSDEER on request, he said.
Aside from break bulk/repackage and re-export facilities, licensees can undertake transportation directly from the zone Kingdomwide and transshipment worldwide. “There is no customs duty or demurrage involved on goods stored in the zone. Nor is there a time limit for goods stored in the zone,” Hefni said.
TUSDEER had earmarked an investment of SR132 million for land reclamation and development of the site, and the total investment would reach half a billion in the next ten years, he added.
TUSDEER’s vision was to become a world-class operator of bonded and re-export zones. Its main activities will include storage for vehicles, heavy machinery-equipment and tires, container services for breaking-bulk, transit and transshipment, warehousing, and assembling and repackaging for imports and re-exports.
New rules and regulations to improve Jeddah Islamic Port were approved three weeks ago by a royal decree, according to Asharq Al-Awsat newspaper. The new rules entitle the Re-Export Zone to operate round-the-clock with the operator’s full authority to operate the zone without direct involvement from the port and customs authorities.
Also, the zone will include all marine services, container handling, storage facilities, industrial projects, re-packaging, labeling and a complete management information system that will support e-commerce. One of the major rules issued was the cancellation of what is called the “port fees”. Now the fees will be collected only if cargo entered into the Kingdom. The port authority will ensure that all cargo carrying re-export status will be handed over to TUSDEER without any delays or fees.
TUSDEER, established with a capital of SR45 million and headquartered in Jeddah, is owned by the Saudi Industrial Services Company (SISCO) & Partners. SISCO’s ongoing projects include an existing desalination plant that provides 15,000 cubic meters of potable water to factories in the Jeddah Industrial City and the JIP. The company is also increasing the production capacity to 39,000 cubic meters by the end of year 2004. SISCO will increase its capital this year from SR100 million to SR200 million.
