Saudi Arabia’s transport boom paves way for major private investment

 

Saudi Arabia’s booming transport sector opens investment opportunities for private players 

Saudi Arabia’s booming transportation sector is opening up a wave of investment opportunities for private players, both domestic and international, as the Kingdom accelerates its transformation under Vision 2030.

At the heart of this strategy is the ambition to position Saudi Arabia as a global logistics, tourism, and business hub — with transportation seen as a critical driver of economic diversification.

Speaking at the third PIF Private Sector Forum earlier this year, Minister of Transport and Logistic Services, Saleh Al-Jasser, announced that private entities are expected to contribute nearly 80 percent of total investments in the transport and logistics sector. The total value of projects available for privatization and other investment models could reach SR240 billion ($63.95 billion).

 

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Private sector takes the lead

Joseph Salem, Partner and Transportation Practice Lead at Arthur D. Little, Middle East, emphasized that public-private partnerships (PPPs) are central to the sector’s strategy.

“Privatization of key infrastructure like ports and airports is unlocking new investment avenues. Cargo terminals managed via PPPs bring in private efficiency and capital. Megaprojects like the Riyadh Metro and NEOM’s mobility network are generating opportunities across construction and engineering,” said Salem.

Alessandro Tricamo, Partner at Oliver Wyman’s Transportation and Services Practice, echoed that sentiment. He noted that airports and seaports tend to be more “bankable” assets that can yield strong returns for investors — unlike railways and public transit systems, which often need government backing to ensure viability.

“To attract private capital, project structures need to align more realistically with market expectations,” Tricamo added. “That clarity will unlock broader private sector participation.”

 

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Logistics infrastructure on the rise

Saudi Arabia’s logistics ecosystem is undergoing rapid growth. A December 2024 report from the General Authority for Statistics revealed a 267 percent increase in logistics facilities since 2021, with the Eastern Province emerging as a major hub, covering over 6.3 million square meters.

“Private firms are entering trucking, warehousing, e-commerce, and freight forwarding. We’re also seeing tech firms bring innovations in AI, EVs, and autonomous transport,” said Salem.

He added that this transformation is creating a more diversified, competitive business environment, vital for the Kingdom’s long-term economic aspirations.

 

Transport as an economic enabler

According to Anthoine Barthes, Vice President at Al-Futtaim Automotive, transportation is more than just mobility — it’s a foundation for connecting economic zones, enabling trade, and driving foreign investment.

“Saudi Arabia’s aim to become a global logistics hub hinges on cutting-edge ports, a high-capacity rail network, robust roads, and modern airports. The Riyadh Metro, spanning 176 km across six lines, is a testament to the country’s progress in mass transit,” Barthes said.

Road upgrades, smart city integration, and enhanced mobility systems are also boosting access to tourism destinations like Qiddiya and Amaala, while improved infrastructure around Makkah and Madinah is enhancing the Umrah and Hajj experience for millions.

 

Building a global logistics powerhouse

Efficient supply chains are crucial to Saudi Arabia’s economic goals, said Tricamo.

“A connected transport network improves the speed, cost, and reliability of moving goods and people. It’s fundamental to the Kingdom’s broader economic ambitions.”

According to Salem, infrastructure modernization and technology integration have elevated Saudi Arabia’s global standing, with the country rising 17 spots to rank 38th in the 2023 World Bank Logistics Performance Index.

• By 2030, Saudi Arabia plans to:
• Expand its rail network from 3,650 km to 8,000 km
• Increase air cargo capacity to over 4.5 million tonnes annually
• Boost port handling to 40 million TEUs
• Establish 40 new logistics centers across 100 million sq. meters

 

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These moves are expected to reduce logistics costs, enhance reliability, and grow the sector to $57 billion by the end of the decade.

Reshaping the business landscape

The transformation of transport infrastructure is already impacting the Kingdom’s business climate.

 “Lower logistics costs and faster, more flexible supply chains are making Saudi Arabia a more attractive destination for foreign direct investment,” said Barthes. “Multinationals can now operate with greater efficiency and reach.”

Salem noted that the ripple effects are being felt across tourism, retail, and real estate, while modernized trade routes are also supporting sectors like agriculture and construction.

 

Technology at the core

Digital innovation is emerging as a cornerstone of Saudi Arabia’s transport evolution.

“Smart ticketing, real-time tracking, and AI-powered management systems are reshaping how people and goods move,” said Tricamo.

Salem added that electric mobility and smart infrastructure are gaining momentum, with plans to deploy thousands of EV charging points across 1,000 locations by 2030. In Riyadh, 30 percent of vehicles are expected to be electric by that time.

Smart city projects like NEOM are integrating IoT sensors, AI-driven traffic systems, and predictive congestion management, while logistics companies are adopting automation and AI to streamline operations.

 

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Challenges and solutions

Despite strong progress, the sector still faces obstacles — including an overreliance on roads, vast geography, regulatory delays, and skill shortages.

Salem noted that the government is addressing these with strategic initiatives, such as investing in rail and transit networks and extending infrastructure to underserved areas. The National Center for Privatization is also helping to simplify regulatory processes and attract private partners.

“Partnerships with global firms are also helping close the skills gap and build local capabilities,” said Salem.

Tricamo added that the scale and pace of Vision 2030 remain a challenge in themselves.

“Balancing the sheer scope of projects with investor expectations requires thoughtful asset selection and a clear roadmap. The private sector will be critical in sharing this load.”

 

Conclusion:

Saudi Arabia’s transportation transformation is not only reshaping infrastructure — it’s redefining the Kingdom’s investment landscape. As Vision 2030 accelerates, private sector involvement will be instrumental in building a smarter, more connected, and economically diversified future.

Source: Arab News