- Saudi 25-year concession first in GCC aviation history
- Expanded airport to accommodate 8 million passengers annually
- $1.2bn project financed by National Commercial Bank, Sabb and Arab National Bank
The GCC regions first airport expansion project developed using a public-private partnership (PPP) has become operational following on-time completion of construction work, which began in 2011.
Saudi Arabias General Authority of Civil Aviation (Gaca) awarded the 25-year concession in 2011 for the development, operation and maintenance of Prince Mohammad bin Abdulaziz airport in Medina to Tibah Airports Development Company, a special-purpose vehicle created for the project.
The $1.2bn project is financed by Saudi Arabias National Commercial Bank (NCB), Sabb and Arab National Bank under the supervision of the Washington-based International Finance Corporation (IFC). The project reached financial close in June 2012, at which time it had set the first half of 2015 as the target completion date. The scope of the expansion scheme included the construction of a new terminal building and apron, among others.
The airport going into full operation is a significant development for the kingdoms Western Province, which has consistently struggled with logistical issues due to the high influx of people during the annual hajj pilgrimage. The expansion project has aimed to bring the airports annual passenger capacity to 8 million. This capacity is expected to double by 2034, when the concession period expires.
The PPP model took a long time coming into the GCC region, with engineering, procurement and construction (EPC) being the preferred procurement model for most infrastructure projects. The timely completion of the airport expansion scheme could bode well for the future adoption of the PPP model across industries in the region.