China Harbour Engineering Company has won a contract to build a container terminal at Jeddah Islamic Port on Saudi Arabia's Red Sea coast.

Although the deal has yet to be officially signed, the Chinese group has won the deal ahead of three other companies: Geneva-registered Archirodon Construction (Overseas), the Italian group Condotte, and Van Oord of the Netherlands. The contract covers the main civil works to expand what is the kingdom's largest port.

Saudi Trade & Export Development Company (Tusdeer), which has a 40-year build-operate-transfer agreement with the ports authority in Jeddah, is expected to confirm the award in late November.

The new third terminal, which is scheduled to open in 2009, will increase capacity at the port by 1.5 million TEUs to 5 million TEUs.

Meanwhile, Tusdeer has approved a change in the make-up of the consortium that will run the terminal.

Malaysia's City Island Holdings, which held a 20 per cent stake in the joint venture to operate and develop the terminal, has been bought by another Malaysian firm, MMC Corporation, for a nominal $2.

MMC joins the local Saudi Industrial Services Company and Xenel Industries which, along with Tusdeer, hold the remaining 80 per cent of the project. The consortium will run the terminal until 2039.