STREAMLINING FOR THE FUTURE

Saudi Arabia 2017 | TRANSPORT | INTERVIEW

TBY talks to Nabeel M. Al-Amudi, Minister of Transport, and President of Saudi Ports Authority, on optimally restricting concession agreements, resolving bottlenecks in the logistics chain, and privatizing as rapidly as possible.

Nabeel M. Al-Amudi
BIOGRAPHY
Prior to his appointment as President of the Saudi Ports Authority, Nabeel M. Al-Amudi served in several managerial and leadership positions at Saudi Aramco and its various subsidiaries, most recently president of Aramco Services Company in Houston. During his tenure at Saudi Aramco, Al-Amudi was involved in the development, negotiation, and implementation of a number of pioneering Saudi Aramco joint ventures and financings, including the Rabigh Development Project (Petro Rabigh) and the Saudi Aramco Total Refinery Project (SATORP). Al-Amudi is a graduate of Harvard Law School and holds a BSc in chemical engineering from Stanford University. He was elected as a Young Global Leader in 2014 by the World Economic Forum.

What changes must happen to more deeply involve the private sector in the nation's ports?

The port sector was one of the first sectors that privatized its operations through concession and BOT agreements. There were long-term incentives for the private sector to invest and reinvest in the terminal operations and various ports. This started nearly 20 years ago, when everything was based on a revenue-sharing model where the regulator and the Saudi Port Authority (SPA) and operator were incentivized to increase volumes and thus revenues for both sides of the concession. Looking forward, we see a two-pronged approach to the next round of privatization. We have learned a great deal through 20 years of experience about what works and what does not in these long-term concession agreements. We are keen on addressing those deficiencies that imbalance some of the concession concerns over the next 20-30 years. This is building on the great work of the past 15-20 years; we already have three of the top four port operators operating in the Kingdom now. Though the overall structure is good, we are working on the next round of concession agreements and the restructuring of those agreements to improve it all the more.

What have you done to improve human capacity and work culture?

The key to the National Transformation Program (NTP) and Vision 2030 is not just a new vision of how the economy is structured, but a new vision of how the government operates. This vision is about demanding efficiency from government agencies and responsiveness to requests, either from the business sector or the citizen. We are seeing more demand for more business-friendly practices and an opening up of data and better statistics for the country. One of the things we are working on is having clearer KPI structures within SPA that allow us to pinpoint the bottlenecks in our port logistics chain.

What does that shift imply about the way the authority is run today?

My job here is to sweat our assets and not to build something new. It is to make sure I get everything out of the assets I already have. The government has spent in excess of SAR40 billion (USD10.7 billion) over the past 30-40 years in ports, and we need to ensure the investment gets an adequate return. Anything that can be done by the private sector will be. There is no desire for the government to crowd out the private sector. My predecessors went down this path and privatized the ports' operations. We need to stay on that path and be more aggressive about privatizing as much of the operations as we can.

Where do you hope to achieve in the rest of 2017?

The NTP has targets for 2018. By the end of 2017, we hope to have a better delineation between the various authorities within the SPA and ensure the inner workings between the various government agencies are clarified. There are other minor steps along the way in terms of our corporatization process and internal assessments in terms of where we are and the authority's overall balance sheets. Another major aspect of the 2030 national transformation program is a big shift on the logistics front.