Saudi Jordanian Investment Fund Seals $705 Million Aqaba Rail Network Deal

Published February 11th, 2019 - 10:57 GMT
The Saudi Jordanian Investment Fund said it has signed a deal with Aqaba Special Economic Zone Authority. (Trade Arabia)
The Saudi Jordanian Investment Fund said it has signed a deal with Aqaba Special Economic Zone Authority. (Trade Arabia)

The Saudi Jordanian Investment Fund (SJIF) said it has signed a deal with Aqaba Special Economic Zone Authority (Aseza) to develop a rail network at an investment of JD500 million ($705.2 million) that will connect Aqaba’s seaports to a dry port in the Ma’an area of the kingdom, thus forming the first phase of Jordan’s national railway network.

The SJIF is a Jordanian limited public shareholding company set up in 2017 as a joint venture between the Saudi wealth fund Public Investment Fund (with 90 per cent stake) and 16 conventional and Islamic Jordanian banks (with the remaining 10 per cent) .

As SJIF’s first major investment in Jordan, the Aqaba-Ma’an railway and the Ma’an dry port project is planned to enhance Jordan’s transportation sector and its capabilities in logistics services.

The MoU outlines the form of co-operation between SJIF and Aseza to advance the railway and dry port project, which includes completing thorough technical and feasibility studies, said the statement from the joint Saudi Jordan fund .

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Upon completion of the studies, SJIF and Aseza would commence project development.

The scope of work includes construction of a new railway line inside the city of Aqaba connecting the southern seaport and container terminal with the existing line, renovation of the existing railway line connecting the city of Aqaba to Ma’an besides procurement of new rolling stock, wagons, and other equipment, and constructing a dry port in Ma’an on 4 million sq m of land.

Upon completion, the railway will operate along a 195-km rail track, transporting cargo containers from and to Aqaba as well as phosphate from the mines in Shidiya to Aqaba for export, said the statement.

The project is a major public-private partnership (PPP) aimed at enhancing Jordan’s logistics offering through providing more efficient transportation solutions and supporting growth and job creation in the local communities in Aqaba and Ma’an, it added.

SJIF chairman Hisham Attar said: "As our first major investment in Jordan, we are pleased to sign this MoU aimed at establishing this major infrastructure project. The Fund continues to be committed to pursuing investment opportunities that create value for Jordan and its citizens."

"We are confident that our partnership with Aseza will serve as a model for effective cooperation between the public and private sectors – a model we hope will demonstrate Jordan’s investment potential, encourage future investments in Jordan, and improve Jordan’s competitiveness, in addition to fostering further cooperation between Saudi Arabia and Jordan," he stated.

Fund CEO Omar Alwir said its investment strategy revolves around building a diversified portfolio along three key tracks: investing in large infrastructure projects; pursuing investments in key economic sectors, such as healthcare, information technology, and tourism; and participating in the growth acceleration of established Jordanian companies by providing growth capital.

Aseza Chief Commissioner Nasser Shraideh said: "We are proud to partner with the SJIF to develop a key transportation project that promises to strengthen Jordan’s logistics offering and drive economic growth."

"The Aqaba-Ma’an railway and Ma’an dry port would reduce transportation costs and spur the development of the logistics ecosystem in southern Jordan and could be the first step in the development of a national railway network," he added.

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