Medina public-private partnership to set standard

08 August 2011

Medina is the first airport project in the region to be developed under the public-private partnership model. High visitor numbers due to the hajj and umrah pilgrimages gives the scheme a unique advantage

Religious tourism means big business in Saudi Arabia and the volume of pilgrims travelling to the kingdom is rising each year.

At the end of August, more than 3 million pilgrims will descend on the kingdom as they embark on the annual hajj. In recent years, the sheer volume of pilgrims has resulted in congestion, bottlenecks and even deaths due to trampling and the heat.

For Medina, the problem is that it is restricted by lack of infrastructure and inundated with demand, which is rising. If ignored, the problem will worsen as 14 million pilgrims are expected by 2035. To tackle the accommodation problem, the Saudi authorities plan to build more hotels. The city needs 82,000 new hotel rooms by 2019. It also needs to improve the city’s roads, as well as develop its rail infrastructure. The Medina Municipality is planning a monorail in the city and plans to build the $8bn Haramain high-speed passenger line between Medina and Mecca are progressing.

In Mecca, the new metro system is due to be fully completed by the time of this year’s hajj. The first phase of the metro has been successful in alleviating congestion problems.

It is also important to expand and upgrade existing airports as the majority of the pilgrims live outside Saudi Arabia.

Unlike other airports, Medina airport constantly has high volumes of traffic due to the annual hajj and umrah. This gives it a unique advantage over other airports in the kingdom and the wider region when it comes to financing. Medina will be developed using a public-private partnership (PPP) model, the first such airport project in the region.

The fact that it is being carried out on a PPP basis is important because Medina airport has real demand and it is growing annually. Other PPP projects that have failed in the region can be attributed in part to a lack of definite demand. Millions of people will always travel to Medina each year and this means the new airport should be profitable.

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