1

PART I

EXECUTIVE SUMMARY

OF

POLITICAL SYSTEM OF

SAUDI ARABIA

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EXECUTIVE SUMMARY

Literally, Islam means submission, peace and salvation. The Islamic religion is the

absolute submission to God according to the heavenly revelations. Thus all Prophets,

peace be upon them, came with the same essentials of belief: belief in Gods Existence

and Unity, final destruction, Resurrection and Judgment etc., as well as common pillars

such as worshipping God, paying zakat and abiding by noble values.

Each prophet hood differed in terms of details of rules and duties. Islam, which was

revealed to Prophet Muhammad, is the most comprehensive of all these forms.This was

clearly stated in the Holy Quran: This day have I perfected your religion for you.

Completed My favor upon you, and have chosen for you Islam as your religion.

There is the system of faith and ideology, the system of worship, and the system of

peoples mutual dealings, in addition to other systems such as that of ethics, sociology,

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politics, management etc. All this serves to confirm Islam as a comprehensive, integrated

way of life.

Saudi Arabia has a land area of 1,960,582 square kilometers according to U.S.

government statistics. Saudi Arabia faces numerous environmental challenges. The

country has very little arable land. Water scarcity is a constant concern, as are the related

issues of desertification and creeping sands The regions dryness results in frequent dust

and sand storms that can cripple transportation. The lack of perennial rivers or permanent

bodies of water poses a continual challenge, as does the depletion of underground water

resources. Additionally, coastal oil spills, though infrequent, contribute to pollution

Saudi Arabias population is very homogeneous. The native population is 90 percent

Arab and 10 percent Afro-Asian. Arabic is the official language. The purpose of education

is to understand Islam correctly and comprehensively, to instill and disseminate the Islamic

faith, and to provide students with Islamic values, instructions and eminent principles

Among developing nations, as categorized by the United Nations in 2005, Saudi

Arabia ranks thirty-second out of 103 countries on the Human Poverty Index,through its

series of five-year development plans, Saudi Arabia continues to try to transform oil wealth

into broader economic prosperity. But despite high oil prices and rising oil production, the

average Saudis standard of living has fallen, and unemployment, especially among young

adults, continues to rise

If we move to the modern Saudi state - the Kingdom of Saudi Arabia - we would face

no difficulty in acknowledging its reality and seeing to what extent it has adopted the

aforementioned pillars.

With regard to their subject to law, governments are divided into two types:Dictatorship:

The autocratic rule of an individual or group. Monocracy: Government through established

laws, to the leadership, governments areal so of two types Monarchy: Government of

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hereditary succession of leadership Republic: Government of which a president is elected

through voting. the source of authority, governments are of three types Dictatorship

An autocratic form of government where the government is ruled by a single person

Oligarchy: leadership by the few, where political power effectively rests with a small elite

segment of society Democracy: government by the people, either directly or

representatively (via elections).

A clearer picture of the Saudi system is obtained if we look at these authorities

individually, as found in the Basic Law of Governance. The judiciary authority is the most

noble and respected authority in Islam Prophets have guided their people and have ruled

them with justice, one of the most famous among being Prophet David, whom God

addressed in the Holy Quran saying

The judiciary is an independent authority. There is no control over judges in the

dispensation of their judgments, except that of the Islamic shariah. The right to litigation is

guaranteed to citizens and residents of the Kingdom on an equal basis. The law defines

the required procedures for this

The courts will apply the rules of the Islamic shariah in the cases that are brought before

them there are many other laws related to the judiciary, but they are merely of an

organizational nature, the most famous of them being:The Law of Procedure before the

Shariah Courts,The Law of Criminal Procedures,The Code of Law Practice,In addition to

other related laws, like:

Real Estate Registration Law,Money Laundering Law,Arbitration Law.

Litigation in Saudi Arabia passes through two parallel channels,The General Judiciary

and The Administrative Judiciary,The General Judiciary has the jurisdiction to settle all

lawsuits that are not under the competence of the Administrative Judiciary.

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The executive authority, as referred to earlier, is the body responsible for the execution

of laws.It is simply referred to as the government, represented by its leader, such as a

King or President, and ministers under his leadership.The Saudi Basic Law of Governance

explains the nature of this authority and its undertakings.

The King, or whoever he deputizes, is responsible for the implementation of judicial

rulings, The King carries out the policy of the nation, in accordance with the provisions of

Islam; the King oversees the implementation of the Islamic Shariah, the laws, the states

general policies and the protection and defense of the country.

The King is the Prime Minister; he is assisted in carrying out his duties by members of the

Council of Ministers, in accordance with the provisions of this and other laws

Fundamentally, a minister is one who assists and supports a King, but the term has often

referred to a particularly robust assistant, as Abu Bakr and Umar were to the Prophet,

peace be upon him The ministers are responsible to the King regarding the

implementation of the Islamic shariah, the laws and the states general policy Within the

ministry there are different departments, committees, and authorities as well as other

structures.

The official governmental agencies and departments, as well as those independent from

the ministries, are part of the executive authority and are responsible for implementing and

maintaining law the Basic Law of Governance states: Ministers and heads of independent

departments are answerable to the prime minister for the ministries and departments

which they administer.

The Saudi regulator prefers the term Regulatory Authority for two reasons:There is a

linguistic difference between regulation and legislation. Regulation is to arrange matters

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and construct them in a cohesive model, while legislation is the process of making and

passing laws.

Laws or legislations are divided into two main parts,The First: The basic law

(legislation) which is the constitution,The Second: Normal laws or legislations. State policy

may differ in the preparation and ratification of the first part. It may be issued by the

primary holder of Within its present status, the Shoura Councils decisions are non-binding,

which represents a different application of the Islamic concept of shoura.

The Council of Ministers, chaired by the King, exercises the same authority and

undertakes necessary decisions within this framework.This means that the Council of

Ministers exercises two authorities at the same time: the Regulatory Authority and the

Executive Authority, and this is a tradition also followed in other countries.

For normal legislations or laws, they are issued by the legislative, or regulatory

authority, as the term is used in Saudi Arabia.In Saudi Arabia, this authority is represented

by the Council of Ministers as mentioned earlier. The Shoura Council issues

recommendations and suggestions Saudi Law has adopted the legal term citizens and

not people the Basic Law of Governance.This may be attributed to the common use of

the term citizen as that which refers to a certain type of inhabitant of a country who also

carries its nationality

The rights of non-Muslims occupy a special position in Islamic jurisprudence due to the

recognition of Muslim scholars of the importance of this issue, and because every Islamic

society includes non-Muslims.

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The status and position of these non-Muslims vary. Some may stay permanently in

the Islamic society, and they are known as Ahl Al-thimma, while others may have

temporary residency only, and they are termed mustamaneen

The Basic Law, which states: Residents on the Kingdom of Saudi Arabia shall observe

its laws. They shall respect the values, traditions and sensibilities of Saudi society. The

King is also the prime minister, chief of state, the head of government, and commander in

chief of the military of Saudi Arabia.

The monarchy is hereditary, so there are no elections for the role.The King's Cabinet, or

Council of Ministers, is appointed by the King every four years, and includes many family

members. There are 22 government ministries that are part of the Cabinet.

In February 2009, King Abdullah appointed Norah Al-Fayez to be the first female

cabinet-level official, a deputy minister for women's education. She had formerly had

worked as an official in the Saudi Institute for Public Administration. This is made up of a

Consultative Council (also known as Majlis as-Shura or Shura Council) advises the King

on issues that are important to Saudi Arabia.

The Consultative Council currently consists of 150 members appointed by the King for

a four-year renewable term. Based on their experience, members are assigned to

committees. There are 12 committees that deal with human rights, education, culture,

information, health and social affairs, services and public utilities, foreign affairs, security,

administration, Islamic affairs, economy and industry, and finance.

In October 2003, the Council announced its intent to start elections for half of the

members of the local and provincial assemblies (there are 13 provinces, each with a

governor and deputy and its own council made up of at least 10 citizens), and one-third of

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the members of the Consultative Council incrementally over a period of four to five years.

No elections have yet been announced.

In September 2011, King Abdullah announced that women would have the right to be

appointed to the Consultative Council. And, in January 2013, the King appointed 30

women to serve four-year terms on the Council, following passing of a law stating that

women should constitute at least 20% of the Council's membership.

Saudi citizens cast votes to select one-half the members of the municipal councils.

The three-stage elections, which will continue through April 2005, represent a fundamental

step away from Saudi Arabias absolute monarchy.

There are also some signs that a portion of the members of the Consultative Council

might be chosen via election in the near future. In general, the expanding power of the

Consultative Council, in comparison to the traditional dominance of the Council of

Ministers, is a positive sign for liberal reformers in the kingdom hoping for increased

popular sovereignty. Nevertheless, out of a population of nearly 26 million, only about 3

million (males only) are eligible to vote.

Political parties are illegal in Saudi Arabia, but distinct political divisions exist. The royal

family continues to fill most of the important political positions in the kingdom, but the king

and the Al Saud are forced to rule by consensus. The ulama, a large and powerful group

of religious leaders, perhaps numbering 10,000, ensure that the king observes Islamic law

above all other considerations. In order to placate the powerful religious majority of Saudi

society, the Al Saud pays close attention to the interests espoused by religious leaders.

Alliances made between important members of the Al Saud family and prominent

religious leaders have long shaped Saudi Arabias society. Saudi Arabias history of tribal

organization also plays into the kingdoms political mix. Leaders of the principal tribes still

command respect and authority. In past years, tribal leaders have proved able to mobilize

military units from among their followers. The traditional merchant families of Saudi Arabia

also have a measure of political influence. The royal family has depended on the

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merchants at various times for financial support, and merchant revenues continue to be a

steady source of government income.

Finally, the new class of Saudi professionals and technocrats, emerging as a result of

increased privatization of the economy, has informal influence on government ministers.

Petitions signed by members of this class have encouraged some reforms.

Supplementing the Shariah courts is the Board of Grievances, which hears cases that

involve the government. The third part of the Saudi court system consists of various

committees within government ministries that address specific disputes, such as labor

issues.

The Supreme Council of Justice, which is comprised of 12 senior jurists, represents

the judicial branch of government. Justice is administered by a system of religious courts

whose judges are appointed by the King on the recommendation of the Supreme Judicial

Council. The independence of the judiciary is protected by law. The King acts as the

highest court of appeal and has the power to pardon.

Local elections in 178 municipalities were first held in 2005, and only male citizens over

21 were allowed to vote.

In September 2011, shortly before the municipal elections, King Abdullah announced

that in subsequent municipal elections, women would be allowed to run and to vote. The

next municipal elections are scheduled for 2015. There are no political parties in Saudi

Arabia.

Newspapers are privately owned but are subsidized and regulated by the government.

Because the Basic Law states that the medias role is to educate and inspire national

unity, most popular grievances go unreported in Saudi Arabia.

In recent years, however, the government has allowed some critical stories to be

written by selected journalists. Although self-censorship continues to be a method of self-

preservation for the nations media outlets, government censorship seems to be

decreasing, especially on journalistic inquiries into crime and terrorism.

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The government owns and operates the radio and television companies in Saudi Arabia.

Censors remove objectionable material deemed offensive by the standards of Islam.

Government censorship, which has always plagued the press in Saudi Arabia, has been

less effective in its control of the Internet.

Legal access to the Internet must be via local servers, which the government monitors

for sites that are pornographic, politically offensive, or un-Islamic. Despite these controls,

however, Saudi Internet users have been able to access most sites they wish to visit by

simply connecting through alternate servers.

Saudi Arabia has strong ties to the nations of the Middle East as well as to other

Muslim states and Western nations such as the United States and Japan. As the guardian

of Islams holy places, Saudi Arabia hosts millions of pilgrims from neighboring Islamic

countries annually.

Additionally, the mutual concern over oil prices has led to cooperation among oil-

producing countries in the Middle East. As one of the more affluent countries in the region,

Saudi Arabia has pursued aid and development for less developed Arab and Muslim

states.

Although Saudi Arabia has, at different times, suspended diplomatic relations with Iran

and Egypt, among others, it continues to play a dominant role in the region. Saudi Arabia

has its strongest diplomatic relations in the region with other members of the Gulf

Cooperation Council (GCC): Bahrain, Oman, and the United Arab Emirates.

Saudi Arabia maintains a complex diplomatic position between the Middle East and the

West. It has consistently sought to promote Arab unity, defend Arab and Islamic interests,

and support a peaceful resolution of the Israeli-Palestinian conflict

Saudi Arabia is a member of the United Nations (UN), most UN specialized agencies,

and numerous other international organizations. Regionally, Saudi Arabia has fostered

close ties to other Arab and Islamic states through membership in organizations such as

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the Arab Bureau of Education for the Gulf States, Arab Monetary Fund, Arab Sports

Federation, Gulf Cooperation Council, Islamic Corporation for the Development of the

Private Sector, League of Arab States, Muslim World League, Organization of Arab

Petroleum Exporting Countries, Organization of the Islamic Conference, and Organization

of the Petroleum Exporting Countries (OPEC).

Saudi Arabia also has membership in the International Monetary Fund and the World

Bank and has applied for membership to the World Trade Organization.

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PART II

TRANSPOTATION SECTOR

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INTRODUCTION TO TRANSPORTATION

In a country once accessible only via the camel caravan, Saudi Arabia has made rapid

improvements in its transportation and communications networks through its five-year

developmental plans. Improvements in roads, railroads, airports, and telecommunications

have come rapidly since 1970. However, with agricultural and industrial development,

traffic also has increased rapidly. Continuing improvements will be necessary to allow for

long-term economic growth as well as to decrease congestion and preserve the quality of

urban life.

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OVERVIEW OF SYSTEM OF GOVERNMENT

After 30 years of intermittent warfare over much of the Arabian peninsula, the late King

Abdul Aziz Ibn Abdul Rahman Al-Faisal Al-Saud completed his consolidation of the

Kingdom of Hejaz and the Kingdom of Nejd into the Kingdom of Saudi Arabia in

1932.1.The Kingdom of Saudi Arabia is an independent Islamic monarchy. His Majesty

King Abdullah Ibn Abdul Aziz Al-Saud, Custodian of the Two Holy Mosques, has been the

head of state since August 1, 2005. The King governs through a Council of Ministers, 2 on

which he serves as President. The King is assisted by His Royal Highness Crown Prince

Sultan Ibn Abdul Aziz Al-Saud, the First Deputy Premier; His Royal Highness Crown

Prince Nayef Ibn Abdul Aziz Al-Saud, the Second Deputy Premier; and by his other

Ministers.

The Basic Law of the Kingdom of Saudi Arabia 3 reaffirmed the Kingdoms status as an

Islamic monarchy and formalized its system of government. In 1993, the Consultative

Council was constituted as an advisory body to the Council of Ministers, with responsibility

for advising on the policies of the Kingdom, reviewing and commenting on laws, bylaws,

contracts, international agreements and special rights; and providing suggestions in

connection with annual reports prepared by the Ministries.

The Kingdom of Saudi Arabia is divided into 13 provinces, each of which is administered

by a provincial governor appointed by the King. Provinces are subdivided into

governorates, districts and centers. Each provincial governor is assisted by a vice

governor. These, together with not less than 10 other members approved by the Minister

of Interior and appointed by the King on the nomination of the provincial governor,

constitute the provincial councils. The provincial councils are empowered to determine the

development needs of their respective provinces, make recommendations for projects and

improvements and request appropriations in the annual state budget. Any member of a

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provisional council is entitled to submit written proposals to the provincial governor and

every proposal will be placed on the councils agenda for consideration.

TRANSPORTATION

The Kingdom of Saudi Arabia has built a massive network of modern roads linking all parts of the

country,in addition to a railway network and air transport services offered by Saudi Arabian Airlines, the

largest air carrier in the Middle East. Sea transportation has also witnessed rapid development,

including the establishment of a number of seaports linking the Kingdom with the rest of the world.

1. Roads

The length of the Kingdom's road network reached more than 42,000 kilometers in 1995 (1415

H).

* The length of paved agricultural roads reached 96,000 kilometers in 1995 (1415 H).

* The cost of the roads total more than SR 130 billion.

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2. Railways

The construction of a railway line linking the capital Riyadh with Dammam, the seaport on the Arabian

Gulf coast, dates to 1951 (1370.H), during the era of the Founding King, Abdul Aziz. As part of the

Kingdom's all-encompassing development a new line was constructed, allowing for the daily operation

of four express trains, two in each direction. This reduced the journey's duration to four hours.

3. Air Transport

Saudi Arabian Airlines (SAUDIA) is responsible for the transportation of passengers and baggage on its

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domestic and international flights. Saudia operates 107 planes of various types, including Lockheed,

Tristar, Airbus and Boeing 747. It has more than 10,000 employees. 73% of its pilots are Saudis. In

1994, Saudia flew 12 million passengers.

4. Airports

The Kingdom of Saudi Arabia has 25 airports. Three are international, eight regional and fourteen

domestic. International airports include:

King Khaled International Airport in Riyadh.

Thirty-five kilometers north of the capital Riyadh, it was opened in 1983 (1403 H). Built on an area of

225 sq. kilometers, its operational capacity is 7.5 million passengers annually.

Dhahran International Airport (Closed 1999)

http://www.the-saudi.net/dia/index.htm

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Built in the Eastern Region in 1953 (1371 H), it was the Kingdom's first international airport. It is an

International transit point for European and Asian airlines.

King Abdul Aziz International Airport in Jeddah

It was built in 1981 (1401 H) on an area of 105 sq. kilometers. Each of its three terminals is considered

a separate airport. There is one for domestic flights, another for international flights and a third for

pilgrim flights. Jeddah is the main air gateway for pilgrims.

King Fahd International Airport in the Eastern Region

This is the Kingdom's most modern airport, comprising an area of 780 square kilometers. Its facilities

are state-of-the-art.

5. Seaports

The number of quays at the Kingdom's ports increased from 27 in 1975 (1395 H) to 182 in 1994 - 1995

(1414 - 1415 H), including 23 at Yanbu's King Fahd Industrial Port. There are 112 maritime companies

in the Kingdom which owns 11 ships and has shares in 48 others.

The major seaports in the Kingdom of Saudi Arabia are:

1.Jeddah Islamic Seaport.

2.King Abdul Aziz Seaport - Dammam, on the Arabian Gulf.

3.King Fahd Industrial Seaport - Jubail, on the Arabian Gulf.

http://www.the-saudi.net/kfia

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4.King Fahd International Seaport - Yanbu, on the Red Sea.

5.Jizan Seaport - in the south of the Kingdom, on the Red Sea.

6.Jubail Commercial Seaport, on the Arabian Gulf.

7.Yanbu Commercial Seaport, on the Red Sea.

Secondary Seaports in the Kingdom include

1. Al Wajh Seaport Red Sea.

2. Haql Seaport Red Sea.

3. Dhiba'a Seaport Red Sea.

4. Al Kheraiba Seaport Red Sea.

5. Farasan Seaport Red Sea.

6. Rabigh Seaport Red Sea.

7. Al Laith Seaport Red Sea.

8. Al Qunfuda Seaport Red Sea.

9. Al Suhail Seaport Red Sea.

10. Al Khobar Seaport Arabian Gulf

11. Al Aqeer Seaport Arabian Gulf

12. Ras Abu Qamees Seaport. Arabian Gulf

These ports are run by the Saudi Ports Authority.

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TRANSPORTATION IN SAUDI ARABIA

There are several transportation modes in the Saudi Arabia.

Road Transportation

File:Riyadh-Mecca Road near Tuwaiq Escarpment.JPG

Riyadh-Mecca Road near Tuwaiq Escarpment in November 2006

Highway 60 passing through Hejaz Mountain Ranges near Taif

Total: 221,372 km

Paved: 47,529 km (includes 3,891 km of expressways)

Unpaved: 173,843 km (2006)

Roads in Saudi Arabia vary from eight laned roads to small two laned roads in rural areas. The city

http://en.wikipedia.org/wiki/Wikipedia:File_Upload_Wizard?wpDestFile=Riyadh-Mecca_Road_near_Tuwaiq_Escarpment.JPGhttp://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/wiki/Meccahttp://en.wikipedia.org/wiki/Taifhttp://en.wikipedia.org/wiki/File:Highway60SaudiArabia.JPGhttp://en.wikipedia.org/wiki/File:Highway60SaudiArabia.JPG

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highways and other major highways are well maintained, specially the roads in the capital Riyadh. The

roads have been constructed to resist the consistently high temperatures and do not reflect the strong

sunshine. The outer city highways such as the one linking from coast to coast are not as great as the

inner-city highways but the government is now working on rebuilding those roads. (htt1)Saudi Arabia

encourages road transport as it has maintained one of the lowest petrol prices in the world, at $0.48 per

gallon ($0.13 per liter).

Some of the important inter-city highways include the following:

Dammam - Abu Hadriya - Ras Tanura Highway (257 km)

Khaybar - Al Ola Highway (175 km)

Mecca - Madinah Al Munawarah Highway (421 km)

Riyadh - Dammam Highway (383 km)

Riyadh - Sedir - Al Qasim Highway (317 km)

Riyadh - Taif Highway (750 km)

Taif - Abha - Gizan Highway (750 km)

Medina - Tabuk Highway (680 km)

Jeddah - Al Leith - Jizan Highway (775 km)

Jeddah - Mecca Highway (80 km)

http://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/wiki/Dammamhttp://en.wikipedia.org/w/index.php?title=Abu_Hadriya&action=edit&redlink=1http://en.wikipedia.org/wiki/Ras_Tanurahttp://en.wikipedia.org/wiki/Khaybarhttp://en.wikipedia.org/wiki/Al_Olahttp://en.wikipedia.org/wiki/Meccahttp://en.wikipedia.org/wiki/Medinahttp://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/wiki/Dammamhttp://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/w/index.php?title=Sedir&action=edit&redlink=1http://en.wikipedia.org/wiki/Al_Qasimhttp://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/wiki/Taifhttp://en.wikipedia.org/wiki/Taifhttp://en.wikipedia.org/wiki/Abhahttp://en.wikipedia.org/wiki/Gizanhttp://en.wikipedia.org/wiki/Medinahttp://en.wikipedia.org/wiki/Tabuk,_Saudi_Arabiahttp://en.wikipedia.org/wiki/Jeddahhttp://en.wikipedia.org/w/index.php?title=Al_Leith&action=edit&redlink=1http://en.wikipedia.org/wiki/Jizanhttp://en.wikipedia.org/wiki/Jeddahhttp://en.wikipedia.org/wiki/Mecca

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ROAD SUB SECTOR

Road sub-Sector/Infrastructure. Construction, rehabilitation and maintenance are expected to be

financed mainly by the public sector for the foreseeable future, with work executed under

competitively-bid contracts. The international experience supports the creation of independent Roads

Boards to represent user groups in overseeing the road network. Construction and maintenance should

be the responsibility of specialist Road Agencies rather than government depart ments. At times,

international experience endorses public enterprise style Road Funds to redress long-term

under-funding of maintenance. These should be supported by road users through appropriate charge

mechanisms, and subject to high governance standards with oversight by the Roads Board. There

continues to be scope for PPP approaches to deliver additional capacity in the form of major highways,

bridges and tunnels. It is likely that multi-year, area-wide road maintenance contracts and concessions

will provide increasing opportunities for the private sector. Intelligent Transport Systems (ITS)

technologies, such as area-wide road pricing, are also possible candidates for PPP as technology risks

may be partly defrayed to the private sector. Road Haulage/Freight. International experience suggests

that road freight services are best provided by the private sector in competitive markets. However, the

industry is poorly developed in many of the developing countries where there may be a case for

enterprise development assistance to road freight operators, and to help build freight forwarding

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capacity. Road Passenger Services. The international experience preferred model is the creation of

competitive or periodically contestable operations by private bus companies, with specific

reimbursements or public service contracts to meet public service..

obligations. However, public ownership remains widespread in some developing countries. Private

sector participation could be for those that have efficient and sustainable business models, and/or in

association with the implementation of credible reform plans involving staged approaches to private

participation in service delivery.

Sea Transportation

Saudi Arabia has a well development sea transport network developed primarily to support the

transport of petrolchemicals. Saudi Ports Authority is the ports management organisation in the country,

overseeing the operations.

The major ports in the country are as follows;

Persian Gulf

Dammam

Jubail

Ras Tanura

Khafji

Khobar

Ras Al-Zour (under construction)

http://en.wikipedia.org/w/index.php?title=Petrolchemicals&action=edit&redlink=1http://en.wikipedia.org/wiki/Saudi_Ports_Authorityhttp://en.wikipedia.org/wiki/Persian_Gulfhttp://en.wikipedia.org/wiki/Dammamhttp://en.wikipedia.org/wiki/Jubailhttp://en.wikipedia.org/wiki/Ras_Tanurahttp://en.wikipedia.org/wiki/Khafjihttp://en.wikipedia.org/wiki/Khobarhttp://en.wikipedia.org/wiki/Ras_Al-Zour

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Red Sea

Jeddah

Yanbu' al Bahr

Al Lith

Duba

Rabigh

Jizan

Farasan (city)

Air Transportation

See also: List of airports in Saudi Arabia

There are an estimated 204 airports in Saudi Arabia (2003 est.).

Airports with paved runways

total: 71

over 3,047 m: 32

2,438 to 3,047 m: 13

1,524 to 2,437 m: 12

914 to 1,523 m: 2

under 914 m: 2 (2003 est.)

http://en.wikipedia.org/wiki/Red_Seahttp://en.wikipedia.org/wiki/Jeddahhttp://en.wikipedia.org/wiki/Yanbu%27_al_Bahrhttp://en.wikipedia.org/wiki/Al_Lithhttp://en.wikipedia.org/wiki/Dubahttp://en.wikipedia.org/wiki/Rabighhttp://en.wikipedia.org/wiki/Jizanhttp://en.wikipedia.org/wiki/Farasan_%28city%29http://en.wikipedia.org/wiki/List_of_airports_in_Saudi_Arabia

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Airports with unpaved runways

total: 133

over 3047 m: 1

2,438 to 3,047 m: 5

1,524 to 2,437 m: 75

914 to 1,523 m: 38

under 914 m: 14 (2003 est.) (Saudia is the nation's flag carrier airline)

Heliports

9 (2009 est.) (htt2)

Rail Transport

This section needs to be further expanded

See also: Saudi Railways Organization

As a result of over-reliance on road and air travel, the rail transport has not received a similar level of

investment in Saudi Arabia. However, there are now plans to add more tracks and develop new railway

routes.

The Saudi Railways Organization (SRO) is a state-owned company that operates Saudi Arabia's rail

network.

SRO provides freight services on two main lines totalling 1018 km. These connect Riyadh with the port

of Dammam on the coast of the Persian Gulf.[4] SRO passenger trains operate between Riyadh and

http://en.wikipedia.org/wiki/Saudiahttp://en.wikipedia.org/wiki/Flag_carrierhttp://en.wikipedia.org/w/index.php?title=This_section_needs_to_be_further_expanded&action=edit&redlink=1http://en.wikipedia.org/wiki/Saudi_Railways_Organizationhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Saudi_Arabiahttp://en.wikipedia.org/wiki/Riyadhhttp://en.wikipedia.org/wiki/Dammamhttp://en.wikipedia.org/wiki/Persian_Gulfhttp://en.wikipedia.org/wiki/Transport_in_Saudi_Arabia#cite_note-4

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Dammam.

There are plans to extend the network to the Red Sea port of Jeddah and, eventually to the borders of

Jordan, Yemen, and perhaps all the way to Egypt.

There is a large scale railway project Haramain High Speed Rail Project underway currently in the

Western province, connecting Makkah with Jeddah and Madinah city. The primary objective of this

railway line is to provide an alternative for the Muslim pilgrims travelling between the 3 cities.

A recent addition is the Al Mashaaer Al Mugaddassah Metro also known as the Makkah Metro tram

system, which was developed in Makkah city. This is a 18.1 kilometers (11.2 miles) track developed to

shuttle a forecasted 8 million pilgrims between Mecca, Mount Arafat, Muzdalifa and Mina in the annual

Hajj pilgrimage.

The Kingdom of Saudi Arabia has built a massive network of modern roads linking all parts of the

country,

in addition to a railway network and air transport services offered by Saudi Arabian Airlines, the

largest

air carrier in the Middle East. Sea transportation has also witnessed rapid development, including the

establishment of a number of seaports linking the Kingdom with the rest of the world.

1.Roads

The length of the Kingdom's road network reached more than 42,000 kilometers in 1995 (1415 H).

* The length of paved agricultural roads reached 96,000 kilometers in 1995 (1415 H).

* The cost of the roads total more than SR 130 billion.

2.Railways

The construction of a railway line linking the capital Riyadh with Dammam, the seaport on the Arabian

Gulf

coast, dates to 1951 (1370.H), during the era of the Founding King, Abdul Aziz. As part of the

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27

Kingdom's

all-encompassing development a new line was constructed, allowing for the daily operation of four

express

trains, two in each direction. This reduced the journey's duration to four hours.

3.AirTransport

Saudi Arabian Airlines (SAUDIA) is responsible for the transportation of passengers and baggage on

its

domestic and international flights. Saudia operates 107 planes of various types, including Lockheed,

Tristar,

Airbus and Boeing 747. It has more than 10,000 employees. 73% of its pilots are Saudis. In 1994,

Saudia flew 12 million passengers.

4.Airports

The Kingdom of Saudi Arabia has 25 airports. Three are international, eight regional and fourteen

domestic.

International airports include:

King Khaled International Airport in Riyadh.

Thirty-five kilometers north of the capital Riyadh, it was opened in 1983 (1403 H). Built on an area of

225 sq.

kilometers, its operational capacity is 7.5 million passengers annually.

Dhahran International Airport (Closed 1999)

http://www.the-saudi.net/dia/index.htm

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Built in the Eastern Region in 1953 (1371 H), it was the Kingdom's first international airport. It is an

international transit point for European and Asian airlines.

King Abdul Aziz International Airport in Jeddah

It was built in 1981 (1401 H) on an area of 105 sq. kilometers. Each of its three terminals is considered

a separate airport. There is one for domestic flights, another for international flights and a third for

pilgrim

flights. Jeddah is the main air gateway for pilgrims.

King Fahd International Airport in the Eastern Region

This is the Kingdom's most modern airport, comprising an area of 780 square kilometers. Its facilities

are state-of-the-art.

5. Seaports

The number of quays at the Kingdom's ports increased from 27 in 1975 (1395 H) to 182 in 1994 - 1995

(1414 - 1415 H), including 23 at Yanbu's King Fahd Industrial Port. There are 112 maritime companies

in the Kingdom which owns 11 ships and has shares in 48 others.

The major seaports in the Kingdom of Saudi Arabia are:

1.Jeddah Islamic Seaport.

2.King Abdul Aziz Seaport - Dammam, on the Arabian Gulf.

3.King Fahd Industrial Seaport - Jubail, on the Arabian Gulf.

http://www.the-saudi.net/kfia

29

4.King Fahd International Seaport - Yanbu, on the Red Sea.

5.Jizan Seaport - in the south of the Kingdom, on the Red Sea.

6.Jubail Commercial Seaport, on the Arabian Gulf.

7.Yanbu Commercial Seaport, on the Red Sea.

Secondary Seaports in the Kingdom include

1. Al Wajh Seaport Red Sea.

2. Haql Seaport Red Sea.

3. Dhiba'a Seaport Red Sea.

4. Al Kheraiba Seaport Red Sea.

5. Farasan Seaport Red Sea.

6. Rabigh Seaport Red Sea.

7. Al Laith Seaport Red Sea.

8. Al Qunfuda Seaport Red Sea.

9. Al Suhail Seaport Red Sea.

10. Al Khobar Seaport Arabian Gulf

11. Al Aqeer Seaport Arabian Gulf

12. Ras Abu Qamees Seaport. Arabian Gulf

These ports are run by the Saudi Ports Authority.

30

Transport in Saudi Arabia

Transportation in Saudi Arabia

31

There are several transportation modes in the Saudi Arabia.

Road Transportation

File:Riyadh-Mecca Road near Tuwaiq Escarpment.JPG

Riyadh-Mecca Road near Tuwaiq Escarpment in November 2006

Highway 60 passing through Hejaz Mountain Ranges near Taif

Total: 221,372 km

Paved: 47,529 km (includes 3,891 km of expressways)

Unpaved: 173,843 km (2006)

Roads in Saudi Arabia vary from eight laned roads to small two laned roads in rural areas. The city

highways and other major highways are well maintained, specially the roads in the capital Riyadh. The

roads have been constructed to resist the consistently high temperatures and do not reflect the strong

sunshine. The

outer city highways such as the one linking from coast to coast are not as great as the inner-city

highways but the government is now working on rebuilding those roads. (htt1)

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32

Saudi Arabia encourages road transport as it has maintained one of the lowest petrol prices in the

world, at $0.48 per gallon ($0.13 per liter).

Some of the important inter-city highways include the following:

Dammam - Abu Hadriya - Ras Tanura Highway (257 km)

Khaybar - Al Ola Highway (175 km)

Mecca - Madinah Al Munawarah Highway (421 km)

Riyadh - Dammam Highway (383 km)

Riyadh - Sedir - Al Qasim Highway (317 km)

Riyadh - Taif Highway (750 km)

Taif - Abha - Gizan Highway (750 km)

Medina - Tabuk Highway (680 km)

Jeddah - Al Leith - Jizan Highway (775 km)

Jeddah - Mecca Highway (80 km)

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33

Road sub-Sector/Infrastructure. Construction, rehabilitation and maintenance are expected to be

financed mainly by the public sector for the foreseeable future, with work executed under

competitively-bid contracts. The international experience supports the creation of independent Roads

Boards to represent user groups in overseeing the road network. Construction and maintenance

should be the responsibility of specialist Road Agencies rather than government depart ments. At

times, international experience endorses public enterprise style Road Funds to redress long-term

under-funding of maintenance. These should be supported by road users through appropriate charge

mechanisms, and subject to high governance standards with oversight by the Roads Board. There

continues to be scope for PPP approaches to deliver additional capacity in the form of major highways,

bridges and tunnels. It is likely that multi-year, area-wide road maintenance contracts and concessions

will provide increasing opportunities for the private sector. Intelligent Transport Systems (ITS)

technologies, such as area-wide road pricing, are also possible candidates for PPP as technology risks

may be partly defrayed to the private sector. Road Haulage/Freight. International experience suggests

that road freight services are best provided by the private sector in competitive markets. However, the

industry is poorly developed in many of the developing countries where there may be a case for

enterprise development assistance to road freight operators, and to help build freight forwarding

capacity. Road Passenger Services. The international experience preferred model is the creation of

competitive or periodically contestable operations by private bus companies, with specific

reimbursements or public service contracts to meet public service..

obligations. However, public ownership remains widespread in some developing countries. Private

sector participation could be for those that have efficient and sustainable business models, and/or in

association with the implementation of credible reform plans involving staged approaches to private

participation in service delivery.

34

Sea Transportation

Saudi Arabia has a well development sea transport network developed primarily to support the

transport of petrolchemicals. Saudi Ports Authority is the ports management organisation in the

country, overseeing the operations.

The major ports in the country are as follows;

Persian Gulf

Dammam

Jubail

Ras Tanura

Khafji

Khobar

Ras Al-Zour (under construction)

Red Sea

Jeddah

Yanbu' al Bahr

Al Lith

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35

Duba

Rabigh

Jizan

Farasan (city)

Air Transportation

See also: List of airports in Saudi Arabia

There are an estimated 204 airports in Saudi Arabia (2003 est.).

Airports with paved runways

total: 71

over 3,047 m: 32

2,438 to 3,047 m: 13

1,524 to 2,437 m: 12

914 to 1,523 m: 2

under 914 m: 2 (2003 est.)

Airports with unpaved runways

total: 133

over 3047 m: 1

2,438 to 3,047 m: 5

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36

1,524 to 2,437 m: 75

914 to 1,523 m: 38

under 914 m: 14 (2003 est.) (Saudia is the nation's flag carrier airline)

Heliports

9 (2009 est.) (htt2)

Rail Transport

This section needs to be further expanded

See also: Saudi Railways Organization

As a result of over-reliance on road and air travel, the rail transport has not received a similar level of

investment in Saudi Arabia. However, there are now plans to add more tracks and develop new

railway routes.

The Saudi Railways Organization (SRO) is a state-owned company that operates Saudi Arabia's rail

network.

SRO provides freight services on two main lines totalling 1018 km. These connect Riyadh with the port

of Dammam on the coast of the Persian Gulf.[4] SRO passenger trains operate between Riyadh and

Dammam.

There are plans to extend the network to the Red Sea port of Jeddah and, eventually to the borders of

Jordan, Yemen, and perhaps all the way to Egypt.

There is a large scale railway project Haramain High Speed Rail Project underway currently in the

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37

Western province, connecting Makkah with Jeddah and Madinah city. The primary objective of this

railway line is to provide an alternative for the Muslim pilgrims travelling between the 3 cities.

A recent addition is the Al Mashaaer Al Mugaddassah Metro also known as the Makkah Metro tram

system, which was developed in Makkah city. This is a 18.1 kilometers (11.2 miles) track developed to

shuttle a forecasted 8 million pilgrims between Mecca, Mount Arafat, Muzdalifa and Mina in the annual

Hajj pilgrimage.

Current practices in the transportation sector

The urban population in Arab countries makes up 57.5% of the total population, compared to a world

average of 49.1% (Croitoru and Sarraf, 2010). Increased urbanization and population growth have

contributed to a rapid rise in the demand for urban transport and hence to a high rate of private car use

and high traffic densities, particularly as mass public transit remains underdeveloped for the most part.

These dynamics are contributing to high emission rates, noise pollution, and land degradation. A

transport sector brief by the World Bank (2010) has thus concluded that many of the [Arab] regions

large urban areas, where the bulk of

[gross domestic product] GDP is produced, face increasingly difficult transport problems with a high

degree of traffic congestion, reduced mobility, and deteriorating air quality.

Transportation trends in Arab countries are characterized by:

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38

Rapid sprawling in the regions major urban centers such as Amman, Baghdad, Beirut, Cairo, and

Damascus, whose populations exceed one million inhabitants.

Government-subsidized gasoline and diesel fuel in many Arab states.

An ageing vehicle fleet in most of the regions cities, where the average age of cars is 15 years, with

countries of the Gulf Cooperation Council (GCC) being an exception. Cars are generally not well

maintained, which contributes to high fuel consumption and elevated levels of emission rates.

Inefficient and inadequate public transport systems and excessive reliance on private cars.

The existence of government policies that encourage private car ownership as opposed to other

modes of transport such as public transport, cycling, and walking.

Inefficient traffic management systems and insufficient public awareness.

Poor urban and physical planning resulting in long travel distances between residential and service

center areas and places of work.

Inadequate governance setup to adequately manage the transportation sector manifested by weak

and insufficiently enforced environmental policies and regulations.

For most Arab countries, especially those with a large rural population such as

Morocco, Egypt, and Yemen, all-weather access in rural areas is limited by the poor condition of road

networks and the inadequacy of basic transport services (World Bank, 2010).

High road traffic mortality rates relative to other regions of the world. Table 1 shows that estimated

death rates (per 100,000 population) in Arab countries are the highest compared with other regions of

the world. In fact, the period from 1990 to 2000 has seen a 20% increase in road accident deaths in the

Middle East, whereas in Australia, Europe, and Japan, mortality decreased by 10% during the same

period

(ESCWA, 2009a). Figure 1 shows that some countries in the Arab region have the highest road traffic

mortality rates (per 100,000 population) in the world.

39

Estimated Road traffics Deaths

MAJOR IMPORTS FROM SAUDI ARABIA

Mineral Fuel (crude & products)

40

Organic Chemicals

Plastics & materials thereof

Inorganic Chemicals and fertilizers

MAJOR EXPORTS FROM INDIA

Mineral Fuels & products

Cereals

Nuclear Reactors

boilers and parts

Electrical machinery & equipment

Sound recorders

Television Image and Sound Recorders, and parts

Iron & Steel and products thereof

organic chemicals; and

apparels.

41

REVENUE AND EXPENDITURES

APTCOs general budget is based on revenues of SR610 million from passenger

fares, cargo and charter operations. The companys expenditures were SR550 million, of

which SR522 million were for operation and maintenance and SR28 million were

administrative and other

overhead expenses. Direct costs of 94% are high by international standards, and although

the company achieves an over-age annual profit of SR60 million, i.e., about 10%,

revenues

are falling.

The drop in profits, despite the huge investments made, is due to competition by

privately-owned small buses and Hajj transportation. It is also due to competition from

international passenger transport companies that transport signifycant numbers of

passengers between cities and across the border of Saudi Arabia, from taxi services, and

from other unauthorized transport services.

SAPTCO plans to increase their market share by providing public transport services to

neighboring countries during the Hajj season and by contracting for services to serve

schools,government employees, women, private sector employees, etc. The company

strategy is to further expand private sector participation via expansion of the bus fleet,

improving the quality of services provided to the public, and in operation and maintenance

activities. SAPTCO is undergoing fleet upgrade and adding new routes, the net effect of

which is expected to further reduce profits and create a financial shortage, wherein lies an

opportunity for the private sector to fill this financial gap. However, several factors

42

discourage private sector investment in SAPTCO: (htt4)

INDIA-SAUDI BILATERAL RELATIONS

India and Saudi Arabia enjoy cordial and friendly relations reflecting the centuries old

economic and socio-cultural ties. The establishment of diplomatic relations in 1947 was

followed by high-level visits from both sides. King Saud visited India in 1955 and the Prime

Minister Jawaharlal Nehru visited the Kingdom in 1956. The visit of the Prime Minister

Indira Gandhi to Saudi Arabia in 1982 further boosted the bilateral relations. In the recent

times, the historic visit of King Abdullah to India in 2006 resulted in signing of Delhi

Declaration imparting a fresh momentum to the bilateral relationship. The visit provided

the framework for cooperation in all fields of mutual interest. The reciprocal visit by Prime

Minister Dr. Manmohan Singh to Saudi Arabia in 2010 raised the level of bilateral

engagement to Strategic Partnership and the Riyadh Declaration signed during the visit

captured the spirit of enhanced cooperation in political, economic, security and defence

realms.

43

RECENT BILLATERAL VISITS

A. Visits from the Saudi side

1. Visit of King Abdullah bin Abdulaziz to India (2006): The landmark visit of King

Abdullah bin Abdulaziz to India in January 2006 as the Chief Guest of Republic Day

celebrations opened a new chapter in the Indo-Saudi bilateral relations. King

Abdullah referred to India as his second home and signed the Delhi Declaration,

first such bilateral document ever signed by a Saudi King which provided a

comprehensive road map for the bilateral relations.

2. Saudi Foreign Minister Prince Saud Al Faisal visited India in February 2006 to

follow up on Kings visit and visited twice thereafter, in February 2008 and

December 2008. The other ministerial visits from Saudi side during 2006-08

included that of Justice Minister, Minister for Higher Education, Minister of Health,

Minister of Commerce & Industry and Petroleum Minister.

3. Prince Salman bin Abdulaziz Al Saud, the Governor of Riyadh, accompanied by a

high-level delegation, paid an official visit to India in April 2010.

4. Grand Imam of the Holy Mosque of Makkah Sheikh Abdul Rahman Al-Sudais paid a

five-day visit to India in March 2011. Sudais is the first ever Imam of Makkah to visit

India.

44

5. Prince Bandar bin Sultan, Secretary General of National Security Council of Saudi

Arabia visited India on March 28, 2011, as special envoy of the Saudi King and met

Prime Minister Dr Manmohan Singh.

6. Dr. Tawfiq Al-Rabiah, Saudi Commerce & Industry Minister led a 76-member

delegation to New Delhi from 4-6 January, 2012, for 9th Indo-Saudi Joint

Commission Meeting.

7. Saudi Assistant Petroleum and Mineral Resources Minister Abdul Aziz bin Salman

visited India and held meeting with Indian Petroleum and Natural Gas Minister S.

Jaipal Reddy on February 24, 2012.

8. Saudi Parliamentary delegation led by Shoura Council Chairman Dr. Abdullah bin

Mohammad bin Ibrahim Al-Sheikh visited India from May 7-10, 2012 and held

meetings with Vice President, Prime Minister, Lok Sabha Speaker and EAM.

9. Saudi Labour Minister Adel Fakeih visited India from November 5-6, 2012, to attend

a conference organised by World Bank titled Employment and Development and

met Minister of Overseas Indian Affairs Mr. Vayalar Ravi on the sidelines.

B. Visits from the Indian side

1. Visit of Prime Minister Dr. Manmohan Singh to the Kingdom of Saudi Arabia

(2010): Prime Minister Dr. Manmohan Singh visited Saudi Arabia from February

27-March 1, 2010 and held discussions with King Abdullah, Saudi Foreign Minister

Prince Saud Al Faisal, Commerce Minister Zainal Alireza and Petroleum and

Mineral Resources Minister Ali Al Naimi. King Abdullah felicitated Dr. Manmohan

Singh with the King Abdualziz Sash of the First Order. Prime Minister addressed the

Majlis Al Shura and Council of Saudi Chambers of Commerce and Industry during

the visit. The King Saud University conferred Honorary Doctorate on the PM.

2. Petroleum & Natural Gas Minister S. Jaipal Reddy visited Riyadh to participate in

the Extraordinary Ministerial Meeting of International Energy Forum (IEF) on

February 22, 2011 and held discussions with his Saudi counterpart Ali Al Naimi.

45

3. External Affairs Minister S.M. Krishna accompanied by Mohsina Kidwai,

Chairperson of the Haj Committee of India, visited Jeddah on March 26, 2011, to

sign the Haj Agreement for the year 2011. Shri Krishna met Fouad bin Abdulsalam

Al-Farsi, Saudi Haj Minister and asked for an increase in the Haj quota.

4. Union Health and Family Welfare Minister Shri Ghulam Nabi Azad visited Riyadh to

offer condolences on the death of the Crown Prince Sultan on October 25, 2011.

5. National Security Adviser Shri Shivshankar Menon visited Riyadh on December 4-5,

2011, to deliver a talk at Gulf Forum 2011.

6. Defence Minister Shri A. K. Antony led a 9-member delegation to Riyadh from

February 13-14, 2012, and held discussions with Saudi King Abdullah bin

Abdulaziz, Defence Minister Prince Salman bin Abdulaziz and Deputy Defence

Minister Prince Khaled bin Sultan.

7. Deputy Chairman of Rajya Sabha, Shri K. Rahman Khan visited Saudi Arabia to

attend the G-20 Parliament Speakers Consultative Meeting on February 25-26,

2012 and held meetings with Dr. Abdullah bin Mohammad al-Sheikh, Chairman,

Saudi Shoura Council; Prince Turki Al Faisal, Chairman, King Faisal Centre, and

Dr. Ali Qasim M. Al Qahtani, Saudi Assistant Deputy Minister for Manpower

Training Development.

8. MOS for External Affairs Shri E. Ahmed visited the Kingdom to participate in the

Friends of Yemen meeting in Riyadh from May 23-26, 2012 and held meetings

with Yemeni Prime Minister Mohammad Basindawa and Foreign Minister Dr. Abu-

Bakr Abdullah Al-Qirbi on the sidelines of the meeting. He also met Saudi Foreign

Minister Prince Saud Al-Faisal, Defence Minister Prince Salman, Haj Minister Dr.

Bandar bin Mohammad Al Hajjar during the visit.

9. Minister of Law and Justice Shri Salman Khurshid led a 3-member delegation to the

Kingdom from June 17-18, 2012, to offer condolences on the death of Crown Prince

Naif bin Abdulaziz Al Saud.

10. Minister of State for External Affairs Shri E. Ahmed visited Jeddah from September

17-20, 2012 and met Saudi Haj Minister Dr. Bandar bin Mohammed Al-Hajjar and

discussed Haj related issues. Shri E. Ahmad led Haj 2012 Goodwill delegation from

21 October 1 November, 2012, and held meeting with Saudi Haj Minister Dr.

46

Bandar bin Mohammed Hajjar in Jeddah on October 23, 2012, to discuss Haj

related issues.

11. Secretary (East) Shri Sanjay Singh led a 3-member delegation to the Kingdom for

the review meeting of 9th JCM on December 23, 2012.

Bilateral Agreements/MoUs:

The bilateral Agreements and MoUs signed are as follows:

1. MoU for Foreign Office Consultations

2. MoU on the Establishment of Joint Business Council between Council of Saudi

Chambers of Commerce and Industry (CSCCI) and Federation of Indian Chambers

of Commerce & Industry (FICCI)

3. Bilateral Promotion and Protection of Investments (BIPA)

4. Agreement on Avoidance of Double Taxation and Prevention of Tax Evasion

(DTAA)

5. MoU on Combating Crime

6. Agreement in the field of Youth and Sports

7. MoU of Scientific and Educational Co-operation between the Ministry of HRD, India

and Ministry of Higher Education, KSA

8. Extradition Treaty

9. Agreement on Transfer of Sentenced Persons

10. MoU for Cooperation in Peaceful Use of Outer Space

11. Agreement on Scientific and Technological Cooperation

47

12. MoU between Centre for Development of Advance Computing (C-DAC) and King

Abdulaziz City for Science & Technology (KACST) on cooperation in

Information Technology and Services

13. Agreement on News Cooperation between Saudi Press Agency (SPA) and Press

Trust of India (PTI)

14. MoU on Cultural Cooperation (htt5)

Legal structures allowed to foreign investors

For foreign investors wishing to engage in business in Saudi Arabia there is, therefore, a

wide range of legal structures available, although it is necessary to obtain permission for

each type from the relevant government bodies. If the business involves commercial

activities in Saudi Arabia, it is necessary to have a company or branch in the Kingdom, but

for public sector contractors there are special rules.

As mentioned above, foreign businesses are increasingly being encouraged to opt for the

joint stock company (corporation) or the limited liability company form in cooperation with

Saudi partners.

48

The rationale behind this is the Government's wish to see foreign businesses making a

more permanent commitment to the Kingdom in situations likely to lead to the transfer of

expertise and technology.The joint stock company is generally only available when it is

envisaged that shares will be issued to the general public in the future. This has been

applied to banking and ventures involving the exploitation of natural resources. In such

cases the joint stock company is the recommended form. For most investors, however, the

limited liability company is the practical form of local incorporation.

As stated above foreign companies wishing to do business in the Kingdom may also set

up a branch which as with most other forms of foreign investment falls within the scope of

the Foreign Investment Regulations. The branch is also subject to the regulatory authority

of the Ministry of Commerce.

ECONOMIC AND COMMERCIAL RELATIONS

Indo-Saudi economic relations have shown remarkable growth with bilateral trade

registering three-fold increase in the last five years. Saudi Arabia is the 4th largest trade

partner of India and the bilateral trade was USD 36 billion in 2011-12.

49

The import of crude oil by India forms a major component of bilateral trade with Saudi

Arabia being Indias largest supplier of crude oil, accounting for almost one-fifth of its

needs. Saudi Arabia is the 14th largest market in the world for Indian exports and is

destination of more than 1.86% of Indias global exports.

On the other hand, Saudi Arabia is the source of 6.35% of Indias global imports. For

Saudi Arabia, India is the 5th largest market for its exports, accounting for 7.55% of its

global exports. In terms of imports by Saudi Arabia, India ranks 9th and is source of

around 3.27% of Saudi Arabias total imports.

INVESTMENTS

According to Saudi Arabian General Investment Authority (SAGIA), it has issued 426

licenses to Indian companies for joint ventures/100% owned entities till 2010, which are

expected to bring total investment of USD 1624.60 million in Saudi Arabia. These licenses

are for projects in diverse sectors such as management and consultancy services,

50

construction projects, telecommunications, information technology, pharmaceuticals, etc.

Moreover, several Indian companies have established collaborations with Saudi

companies and are working in the Kingdom in the areas of designing, consultancy,

financial services and software development. On the other hand, Saudi Arabia is the

46th biggest investor in India with investments from April 2000 to June 2012 amounting to

USD 33.81 million.

Indian Investment and Joint Ventures

The bilateral investment between the two countries is growing steadily. Since mid-2000, a

number of Indian firms have taken advantage of the new Saudi laws and established joint

venture projects or wholly-owned subsidiaries in the Kingdom. According to Saudi Arabian

General Investment Authority (SAGIA), as of 31.01.2006 to 31.12.2010 it has issued 426

licenses to Indian companies for joint ventures/100% owned entities, which are expected

to bring total investment of US$ 1624.60 million in Saudi Arabia (as per latest figures

available). These licenses are for projects in diverse sectors such as management and

consultancy services, construction projects, telecommunications, information technology,

pharmaceuticals, etc. Moreover, several Indian companieshave established collaborations

with Saudi companies and are working in the Kingdom in the areas of designing,

consultancy, financial services and software development. On 12.12.12, Tata has signed a

letter of intent to establish factory in Saudi Arabia to produce 50,000 Land Rovers a year

by 2017. The initial investment is estimated at US$1.2 billion. (htt7)

Saudi investment in India

On the other hand, Saudi Arabia is the 46th biggest investor in India with investments from

April 2000 to December 2012 amounting to US$ 40.90 million. There are a number of

http://www.sagia.gov.sa/http://www.sagia.gov.sa/http://www.sagia.gov.sa/http://www.indianembassy.org.sa/IndianCompaniesInKSA.html

51

Indo-Saudi joint ventures or Saudi owned companies in India, in diverse fields such as

paper manufacture, chemicals, computer software, granite processing, industrial products

and machinery, cement, metallurgical industries, etc. (www1)

Indian Business delegations to Saudi Arabia

During last couple of years, a large number of Indian trade and industry delegationshave

visited Saudi Arabia to explore the opportunities for long-term partnerships and

cooperation, including joint ventures. These delegations received warm and enthusiastic

response from the Saudi business community. Indian and Saudi companies regularly take

part in trade fairs in each others country. The important recent bilateral visits from India

include the historical official visit of Honble Prime Minister Dr. Manmohan Singh, from 27

Feb-March 1, 2010.

http://www.indianembassy.org.sa/MajorIndianDelegations.html

52

India-Saudi Trade (in million USD)

Year

( April

March)

Imports from

Saudi Arabia

Exports to

Saudi

Arabia

Total trade

% increase

in bilateral

trade

% increase

in Indian

imports

% increase

in Indian

exports

2007-2008 19,470.30 3,711.16 23,181.46 - - -

2008-2009 19,972.74 5,110.38 25,083.12 8.20 2.58 37.70

2009-2010 17,097.57 3,907.00 21,004.57 -16.26 -14.40 -23.55

2010-2011 20,385.28 4,684.40 25,069.68 19.35 19.23 19.90

2011-2012 31,060.10 5,683.29 36,743.40 46.57 52.37 21.32

2012

(April-Nov) 21,506.76 6,076.51 27,583.27 15.15 5.37 71.48

Source: Department of Commerce, Ministry of Commerce and Industry, Government of India,

available at .

CULTURAL TIES

http://commerce.nic.in/eidb/default.asp%3E

53

Secretary Tourism, Government of India, led a high-level delegation consisting of State

Tourism officers and tour operators to the Kingdom to participate in Road Shows in

Dammam, Riyadh and Jeddah on 7th, 9th and 11th January, 2012, respectively. A cultural

troupe from ICCR comprising of a Shehnai and a Qawwali group, performed in Jeddah

and Riyadh from 25-29 January 2012, coinciding with the Republic Day celebrations. A 45-

member Saudi youth delegation visited India on 10-day tour from March 22, 2012, to

strengthen the cooperation in the information and communications technology (ICT) sector

and to step-up efforts to promote understanding and friendship among the youth of the two

countries. A 54-member cultural delegation visited the Kingdom to participate in the Indian

Cultural Week, organized in Riyadh in collaboration with the Saudi Ministry of Culture from

November 3-7, 2012.

Indian Community in Saudi Arabia:

The 2 million plus strong Indian community in Saudi Arabia is the largest expatriate

community in the Kingdom and is the most preferred community due to their expertise,

sense of discipline, law abiding and peace loving nature. The contribution made by Indian

community to the development of Saudi Arabia is well acknowledged. The Haj pilgrimage

is another important component of bilateral relations with more than 1,70,000 Indians

performing Haj every year, representing third largest contingent performing Haj. (htt)

Bilateral investment

54

India and Saudi Arabia are developing countries and need two-sided flow of investment in

infrastructure and development. Progressive growth has been observed between the

countries in bilateral investment after the liberalization policy of India in 1991 and little bit

faster increase in new millennium. Saudi Arabia is ranked at 15th position in country-wise

FDI joint venture in India and it is second in Arab countries followed by UAE. Saudi has

$21.55 million dollar worth value in FDI joint venture during 200405 to 200708. Saudi is

also among the major FDI investing countries in India, it has invested 422.1 million INR

during August 1991 to December 1999 and 690.71 million INR during January 2000 to

August 2008. Investment is observed in diverse fields such as paper manufacture,

chemicals, computer software, granite processing, industrial products and machinery,

cement, metallurgical industries, etc. Indian firms also has shown the interest in Saudi

market after new Saudi laws and established joint venture projects or wholly owned

subsidiaries in the Kingdom. According to Saudi investment authority survey, India has 56

FDI projects having worth of 304 million SAR during 2005 in Saudi Arabia. These licenses

are for projects in different sectors such as management and consultancy services,

construction projects, telecommunications, information technology, pharmaceuticals, etc.

Moreover, several Indian companies have established collaborations with Saudi

companies and working in the Kingdom in the areas of designing, consultancy, financial

services and software development.

55

INDIA-SAUDI ARABIA BUSINESS RELATIONS

India-Saudi Arabia Business Relations

Indo-Saudi relations have received fresh impetus in recent years following two very

important State-level visits. The Delhi Declaration signed during the visit of His Majesty

King Abdullah bin Abdul Aziz al-Saud to India in January 2006 followed by the Riyadh

Declaration signed in the course of the Indian Prime Ministers visit to Saudi Arabia in

February-March, 2010 have both given a fillip to an increased level of interaction between

the two countries on areas ranging from oil and gas; science & technology; to energy,

banking & investment. Saudi Arabia and India have established a number of institutional

mechanisms for bilateral economic cooperation. These include the Saudi-India Joint

Business Council; the Indo-Saudi Joint Commission Meetings; the Joint Working Groups

on Hydrocarbons etc. India and Saudi Arabia are also actively engaged with each other in

forums like India-GCC Industrial Conference and the India-GCC Free Trade Agreement

Talks. Progress on these and finalization of tariff lines are expected to provide further

thrust to bilateral trade between India and Saudi Arabia. Earlier, the two countries had

signed the Bilateral Investment Protection and Promotion Agreement (BIPPA) and Double

Taxation Avoidance Agreement (DTAA) during the historic visit of King Abdullah bin Abdul

Aziz Al-Saud to India in January, 2006. (htt8)

Indias bilateral trade with Saudi Arabia has been steadily rising. Saudi Arabia is the 4th

largest trading partner for India. India imports almost 16.17% of its crude oil from Saudi

Arabia. Both countries are committed to elevate the current buyer-seller relationship into

strategic energy cooperation. Saudi Arabia is the 46th biggest investor in India with

investments from April 2000 to December 2012 amounting to US $ 40.90 million. There

are a number of Indo-Saudi joint ventures or Saudi owned companies in India, in diverse

56

fields such as paper manufacture, chemicals, computer software, granite processing,

industrial products and machinery, cement, metallurgical industries, etc. There is

considerable scope for diversification and further strengthening of the economic ties

especially in the field of investments. Saudi investors are also looking at raising the levels

of investment in India including in sectors like infrastructure and real estate.

Many Indian companies are operating in/from Saudi Arabia. According to The Saudi

Arabian General Investment Authority (SAGIA) Indian companies /entities have invested a

sum of US$ million 1624.60 in Saudi Arabia from January 2000 to December, 2010. Saudi

companies are also looking at India as an attractive investment destination.

There are opportunities for Indian businessmen and companies in sectors like construction

industry, petro-chemicals and health & pharmaceuticals in Saudi Arabia while similarly

attractive opportunities are there for Saudi businessmen and companies in sectors like

infrastructure and real estate in India.

Officials from the Saudi and Indian sides met at New Delhi from January 4-5, 2012 for

deliberations marking a successful 9th Joint Commission Meeting between the two sides.

The Saudi delegation, led by the Commerce & Industry Minister, Dr. Tawfiq Bin Fawzan

Al-Rabiah, comprised 76 officials and businessmen. The Chairman from the Indian side

was the then Honble Minister for Finance, Mr. Pranab Mukherjee. A whole range of issues

were discussed at great length and this Meeting is expected to provide even further thrust

and momentum to the ongoing bilateral co-operation between the two countries.

9th Joint Commission Review Meeting took place on 23rd December, 2012 in Riyadh. The

Indian delegation was led by Mr. Sanjay Singh, Secretary (East), Ministry of External

Affairs, GOI. Both sides discussed the progress made and to decide on actions to be

taken.

57

Introduction

India and Saudi Arabia are old business partners: their trade relations go back several

centuries in time. Today, the bilateral business ties are being steadily expanded and

further strengthened by continuous interaction and cooperation, including regular

exchange of business delegations. Besides being a major trade partner, India sees the

Kingdom as an important economic partner for investments, joint ventures, transfer of

technology projects and joint projects in third countries.

Trade

Saudi Arabia is the 4th largest trading partner for India: The value of the two-way trade

between the two countries in 2011-12 exceeded US$ 36 billion. Saudi Arabia is the 14th

largest market in the world for Indian exports and is destination of more than 1.86% of

Indias global exports. On the other hand, Saudi Arabia is the source of 6.35% of Indias

global imports (Source: www.dgft.gov.in).

For Saudi Arabia, India is the 5th largest market for its exports, accounting for 7.55% of its

global exports. In terms of imports by Saudi Arabia, India ranks 9th and is source of around

3.27% of Saudi Arabias total imports (2011 figures) (Source: Saudi Arabian Monetary

Agency (SAMA) Annual Report 2011, www.sama.gov.sa, extracted from import, export

statistics published by Central Dept. of Statistics & Information, Ministry of Economy &

Planning, Saudi Arabia). (htt6)

http://www.dgft.gov.in/http://www.sama.gov.sa/

58

Trade figures for the last six years are as follows:

Indo-Saudi Trade (in million US $)

Year

( April -

March)

Imports from

Saudi Arabia

Exports to

Saudi Arabia

Total

trade

Increase in

bilateral

trade

Increase in

Indian

imports

Increase in

Indian

exports

2006-2007 13,355.33 2,590.77 15,946.10 .

2007-2008 19,470.30 3,711.16 23,181.46 45.37% 45.79% 43.25%

2008-2009 19,972.74 5,110.38 25,083.12 8.20% 2.58% 37.70%

2009-2010 17,097.57 3,907.00 21,004.57 -16.26% -14.40% -23.55%

2010-2011 20,385.28 4,684.40 25,069.68 19.35% 19.23% 19.90%

2011-2012 31,060.10 5,683.29 36,743.40 46.57% 52.37% 21.32%

59

Source: Department of Commerce, GOI. ; www.dgft.gov.in(as on 29.09.2012)

Indo-Saudi Trade (in million US $)

December 2011 December

2012

April-

December

2011

April-

December

2012

% increase

Imports from Saudi

Arabia 2681.25 2781.19 23028.47 24803.52 7.71

Exports to Saudi

Arabia 396.23 693.64 3939.70 6776.67 72.01

Total 3077.48 3474.83 26968.17 31580.19 17.10

Source: DGCI & S, Ministry of Commerce, GOI (as on 31.1.2013)

List of recent visits is as follows:

1. An eight member delegation from the Chemicals and Allied Products Export Promotion

Council of India (CAPEXIL) visited Riyadh from 28-30 January, 2011 to hold Buyer-Seller

Meet (BSM) with the Saudi businessmen. The BSM was held on 29th January, 2011.

2. A 16-member business delegation from Synthetic & Rayon Textiles Export Promotion

http://www.dgft.gov.in/

60

Council (SRTEPC) visited Saudi Arabia and held a BSM/ Exhibition in Riyadh Chamber of

Commerce & Industry from September 13th to 14th, 2011. The BSM/ exhibition in Riyadh

drew several businessmen including importers and suppliers of textile items. The SRTEPC

also held a similar BSM/ Exhibition in Jeddah from September 17th to 18th, 2011.

3. A 13-member delegation from the Confederation of Indian Industries (CII) visited the

Kingdom (December 10-18, 2011). The delegation was made up of representatives from

sectors like engineering and auto components; rubber moulded and extruded products;

infrastructure; hospitals; IT Consulting including business process outsourcing;

construction; communication technology; process plants in fields like fertilizers, ammonia

scrubbing etc.; management consultancy; and engineering solution provider in sectors like

energy and environment. The delegation had business meetings in the Chambers of

Commerce & Industry in Jeddah, Riyadh and Dammam. The delegation also met some

prominent businessmen in the cities of Jeddah and Riyadh. The visit of the CII delegation

is yet another testimony to the growing business interaction between India and the

Kingdom of Saudi Arabia.

4. A Tourism Road Show was held in the cities of Dammam, Riyadh and Jeddah (January

7-12, 2012). The tourism delegation, comprising representatives from State Tourism,

including the Tourism Minister from the State of J&K; tour operators, representatives from

airline industry; and officials from the India Tourism Office, Dubai participated in the Road

Show. The delegation was led by Secretary, Tourism, Mr. R.H. Khwaja. The delegation

had meetings with their opposite numbers in all the

5. A 3-member delegation from the Gems & Jewellery Export Promotion Council (GJEPC)

of India visited Riyadh and Jeddah from 27th to 29th May, 2012. The delegation organized

Road Shows in the cities of Jeddah and Riyadh.

6. A seven member business delegation consisting of growers and exporters of

Cardamom, headed by the Director (Marketing) Spices Board of India visited Riyadh and

Jeddah from 3rd to 5th June, 2012 and held Buyer-Seller- Meets (BSM) with Saudi

61

businessmen at the premises of Riyadh and Jeddah Chambers of Commerce and

Industries.

7. A five member high level official delegation led by the Secretary (Economic Affairs),

Ministry of Finance, Government of India, accompanied by senior officials from Ministry of

Commerce, Reserve Bank of India and the Securities and Exchange Board of India visited

Riyadh on 10th June, 2012 and organized a Road Show on Investment Opportunities in

India at Al Faisaliah Hotel, Riyadh. The delegation also had interactive meetings with

senior officials of Saudi Arabian Monetary Agency (SAMA) and Saudi Arabian General

Investment Authority (SAGIA).

8. Mr. Satyan Sharda, Director and Mr. M.P. Singh, Director (cost) from Ministry of

Commerce & Industry, New Delhi, India visited Saudi Arabia. The delegation visited

facilities and had meetings with officials of Saudi Basic Industries Corporation (SABIC) and

Saudi Petrochemical Company (SADAF) in Riyadh and Jubail respectively from 30th June

to 4th July, 2012.

9. A two member delegation comprising Shri Shashank Goel, Joint Secretary Ministry of

Heavy Industries and Public Enterprises and Shri A.K. Verma, Director Finance of

Engineering Projects (India) Limited (EPI), a Central Public Sector Enterprise under the

administrative control of Department of Heavy Industry visited Saudi Arabia from

14.07.2012 to 16.07.2012.

10. ITPO participated in Saudi Agro Food 2012 in Riyadh from September 24-27, 2012 at

Riyadh International Convention & Exhibition Center. 38 Indian companies including

APEDA participated in the Exhibition under the ITPO banner.

11. A three member delegation led by Shri Sanjay Singh, Secretary (East) visited Riyadh

on 23.12.2012 to participate in the 9th India-Saudi Joint Commission Review Meeting.

12.An 11 member business delegation from CAPEXIL held Buyer Seller Meet in Riyadh

Chamber of Commerce & Industry on 27.02.2013.

62

Proposed Indian delegations and Commercial events during 2012/

early 2013

1. India Food Festival at Elaf Jeddah Hotel from 20-28 March, 2013 by Consulate

General of India, Jeddah.

2. Catalogue Show of Indian Companies at Bisha Chamber of Commerce and Industry

from 25-26 March 2013.

3. Catalogue Show of Indian Companies at Yanbu Chamber of Commerce and

Industry from 29-30 April 2013.

4. Incredible India Tourism Road Show is planned at Jeddah (19th May 2013), Riyadh

(21st May, 2013) and Dammam (23rd or 24th May, 2013).

5. ITPO would be participating in Saudi Agro Food 2013 in Riyadh from 15-18

September 2013 at Riyadh International Convention & Exhibition Center.

6. Embassy of India Riyadh has proposed to Ministry of Commerce & India Trade

Promotion Organisation (ITPO) to organise an India Trade Fair in December 2013 /

early 2014.

7. The 3rd Round of FTA negotiations between India and GCC to be held in India (date

to be decided)

8. 4th GCC-India Industrial Conference is scheduled to be held in Jeddah, Saudi

Arabia from 25-27 May, 2013.

9. A delegation of Overseas Indian Facilitation Centre (OIFC) {A not-for-profit

initiative of MOIA & CII} is planning to visit Saudi Arabia for a two day meet to

expand the economic engagement of the NRIs/PIOs in the Kingdom of Saudi

Arabia with India and is likely to be held with GCCI-India Industrial Conference.

Saudi Business delegations to India

In recent times, the number of Saudi businessmen and delegationsvisiting India has grown

http://www.indianembassy.org.sa/SaudiDelegations.html

63

substantially, indicating a growing interest in emerging business opportunities in India.

List of recent visits is as follows:

1. A 33 member Saudi business delegation led by Dr. Abdulrahman Alrabiah, Chairman of

the Saudi-Indian Business Council (SIBC): (set up by Council of Saudi Chambers of

Commerce and Industry) visited India during February 2011 to attend the 3rd India-Saudi

Joint Business Council Meeting held in New Delhi in February, 2011. The delegation had

interactive meetings with FICCI, CII and ASSOCHAM and Indian businessmen

representing various sectors. MOUs/JVC agreements between India and Saudi

Companies were also signed during the visit.

2. A six membe