Jeddah-based Saudi Ground Services (SGS) has signed a memorandum of understanding (MoU) with local firm Jabal Omar Development to study the possibility of building a new passenger terminal in Mecca.

The MoU was signed on 21 February, SGS said in a statement

“We will be working together to explore the possibility of building a passenger terminal in the central district of Makkah, that would serve hajj pilgrims and umrah performers who arrive at and depart from the King Abdulaziz International airport,” Yasser bin Faisal al-Sharif, CEO of Jabal Omar, said.

Saudi Stock Exchange (Tadawul)-listed SGS is the integrated company that emerged from the merger in 2011 of Saudi Arabian Airline Ground Services, National Handling Services and Attar Ground Handling.

King Abdulaziz International airport is Saudi Arabia’s largest airport in terms of passenger traffic; it handled 31.15 million passengers in 2016, some 3.5 per cent more than in 2015.

A $7.5bn new passenger terminal at the airport is expected to open in May.

However, the 20-year operation and maintenance (O&M) contract with the selected contractor, Changi Airports Saudi Arabia (Casa), was cancelled on 21 February.

The redevelopment of the airport began in 2010 when Gaca awarded local Saudi Binladin Group two contracts worth a combined $7.2bn for the overhaul of the existing terminal at the airport and the construction of a new one. The new terminal has a design capacity of 30 million passengers annually.

The masterplan for the airport envisages increasing its capacity to up to 43 million passengers a year by 2025 and 80 million passengers annually by 2035.

In February, Mecca governor Khaled al-Faisal announced that an estimated SR14.6bn ($3.9bn) of new infrastructure projects will be developed across the provinces of Taif, Moya and Misan.

The largest portion of the budget, SR11bn, is to be allocated to projects in Taif where a new international airport is under development using a public-private partnership (PPP) model.