Saudi port operator to develop Bangladesh terminal

CC BY-SA 4.0/Moheen Reeyad

• $170m deal for Chittagong Port
• Concession for 22 years
• RSGTI in talks with other ports

Saudi company Red Sea Gateway Terminal International Limited (RSGTI) has signed a 22-year concession to develop a container terminal at Bangladesh’s primary port in a deal worth $170 million.

RSGTI, a subsidiary of the Sustained Infrastructure Holding Company (Sisco), signed the deal with the Chittagong Port Authority to develop Patenga Container Terminal.

In a filing to the Saudi Stock Exchange, the company revealed it is in “advanced negotiations” with several other international ports to expand its project pipeline.

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Under the Bangladesh concession agreement, RSGTI will develop and operate a 500,000-twenty-foot equivalent unit facility. 

The terminal, which currently features a 580-metre quay, will be equipped with new technologies to handle the fast-growing export market, the company said. 

The capital expenditure for the Bangladesh concession will be funded through debt and equity, it added.

The concession has been signed in partnership with the Public Investment Fund, a 40 percent shareholder in RSGTI, to accelerate its global expansion ambitions. 

The financial impact of the Bangladesh concession on Sisco’s financial statements is expected to be reflected from 2024.

The Port of Chittagong serves as the gateway for 90 percent of import and export activities in Bangladesh, which has a population of 160 million people. 

Sisco’s five-year strategy, announced in late 2021, aims to double revenue to SAR2 billion and increase assets under management to SAR6 billion by 2026. 

According to latest data from the Observatory of Economic Complexity, Saudi Arabia exported products worth $1.1 billion to Bangladesh in 2021, while goods worth $488 million went the other way.

Fertilisers and clothing were the most traded products.

In October, the International Monetary Fund revised down its growth forecast for Bangladesh’s economy to 6 percent for the fiscal year 2023-24 amid sustained high inflation and external payment challenges.