www.sagia.gov.sa

SAUDI ARABIA TRANSPORTATION

AND LOGISTICS OPPORTUNITIES

September 2016

1

Saudi Arabia at a glance

Diversified Economy

17thLargestexporter

20thLargest economy

29thLargestimporter

$653GDP in Billions

5thHighest Growth (G20)

$20,494GDP per capita

Largest free marketeconomy in GCC

31.7 M Population

Direct Land, Sea andAir link to GCC & AfricaMarket

0%

5%

10%

15%

20%

2% 6% 7%

12% 12% 13%

19% Producers of Gov Services Transport Storage & Comms Finance & Business Services Agri, Forestry & Fishing Trade, Restaurants & Hotels Manufacuring Construction

Economic Activity as % of GDP (Non-Oil & Mining) 2015

Market Access-Hub to Dynamic MarketsSaudi Rail, Ports & Airports Infrastructure proviedes companies

with market access to over 1.5 billion people

Riyadh

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Market Access A Dynamic Global HubMarket Access-Hub to Dynamic Markets

Saudi Rail, Ports & Airports Infrastructure proviedes companies with market access to over 1.5 billion people

Riyadh

Saudi Arabias transport sector enjoys a geographical competitive advantage with its accessibility to major emerging markets and important marine passages.

3

Achieving The Vision

*Certain conditions apply

Saudi Arabias transport sector abounds with unfulfilled potential. The Kingdom offers a strategic location for logistics companies, supply chain managers and manufacturers. From here, companies can service a regional market of more than two billion potential customers on three continents. Private sector participation is vital to development of the sector and is strongly encouraged.

Saudi Arabia's ports are located along a critical intersection of the East-West shipping routes. The integration of ports with rail, road and air networks give Saudi Arabia many natural advantages. New infrastructure along with specialized facilities and economic zones will further extend that advantage.

The Kingdom is committed to meeting strong public demand for transit services to support the countrys overall growth adding further appeal to investors. This commitment is mainly focused on railway and envisages an additional 10,000 kilometers in rail and metro by 2030. In particular, the Kingdom has approved and commenced the development of five flagship projects will cover a total length of 5,500 kilometers. One of those is the Riyadh metro project, which has an allocated investment of SAR 90 billion and is scheduled to launch operations in 2018.

Growing demographic pressure, urbanization, and the Kingdoms long-term commitment to infrastructure development are key characteristics that make the transport and logistics sector attractive to investors. To realize its ambitions, the Kingdom is encouraging private sector investment in Saudi Arabia's pipeline of projects. By participating in the development of infrastructure at the scale and speed required, experienced investors can take advantage of many exciting opportunities in the Kingdom.

4

Transport & Logistics in Vision 2030

1. Develop a unique regional logistical hub and establish special economic zones.

2. Maximize existing investments in ports, railways, roads and airports

3. Partner with the private sector to develop and improve our transport infrastructure

4. Unlock our infrastructure by improving our laws, regulations and processes

5. Maximize current capacity and open new trade routes reinforce our unique position as a logistical gateway to three continents

6. Improve integration regionally and internationally

Compound Annual Growth Rate*

12%Employment Increase

1.1 Million From 356,000

Under the National Transformation Plan and Vision 2030, the Kingdom has set up an ambitious investment program to significantly enhance the quality of the transportation sector and the socioeconomic development of the country.

Projected Investment

$141 Billionby KSA Government over

the next 10 years

Growth Objectives to 2030

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Transport Expansion Program

Transport Opportunities

Railroad Projects Kms

Haramain High Speed Railway 450

Saudi Landbridge 950

North-South Railway 2,700

Saudi-Bahrain Railway 90

Upgrade Riyadh-Dammam line 1,005

Jubail-Dammam line 11

Metro, Education andHajj Bus Projects Kms

Riyadh Metro 25.05

Madinah Metro 21.06

Makkah MMRT 17.06

Dammam PTS 15.99

Jeddah PTS 11.99

Bus projects 9.06

Transportation and Logistics powers the Saudi Arabian economy. The Kingdom has begun a major expansion of its transportation networks, launching projects in mainline rail, metro and bus services. Across the range of projects, the Government is strongly encouraging private sector participation, Transport creates over $100 billion in opportunities in rail infrastructure, components & technology. Among the most immediate are:

Education and Hajj bus manufacturing

Rolling stock manufacturing

Components (metro, train and automotive)

Operations & Maintenance

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Attractiveness to Manufacturers

Att

ract

iven

ess

to th

e K

ingd

om

Low Med High

High

Med

Low

High priority

Mid priority

Low priority

De-prioritized

Market size

Components considered

Wheels

Rails Switches

GSM rail equipment

Signal equipment

Seats

Slab track Fire safety systems

Rails

Fastenings

Poles / Masts

Catenary

HVAC parts Security systems

Brake parts

Rail Components OpportunitiesA strong rail sector supply chain is essential for future productivity in this vital industry and the

Kingdom is open to manufacturers and service providers that are ready to take advantage of new

and existing opportunities. From a base in Saudi Arabia, manufacturers can service their existing rail

customers and access other markets in the MENA region.

Opportunities exist across the full range of rail infrastructure and rolling stock components. SAGIA

has developed a number of example business cases for key components and would be delighted to

discuss these opportunities and others with you.

We will work with you from first contact through the full project life cycle to help you establish a

successful business in the Kingdom. The Kingdom is committed to improving the ease of doing

business through ongoing regulatory reforms. We will also design flexible incentives packages to

suit your business needs.

Example: Rail Components Opportunities

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Market CharacteristicsSAGIA is working with Tatweer Education Holdings, a strategic investment company with

responsibility for provisioning a number of core and support educational services, including

student transport in public schools. From an investors perspective, education transport in Saudi

Arabia is a large and growing sector and service operations are already privatized. Tatweer

currently serves a student population of almost 1.25 million and operates a fleet of over 35,000

(changed from 27,000) vehicles. As the service expands to include private schools, higher

education and special-needs students that population is expected to grow to 2.5 million

students and the fleet size to increase to 45,000 vehicles.

Along with the existing education bus market there is an additional opportunity to supply buses

for Hajj pilgrims. The bus sector has a safety and compliance-driven culture and will continue

to evolve, incorporating more types of services and products for schools, staff, parents and

students.

This financially-stable and growing market offers a very attractive value proposition for local bus

manufacturing and for bus Operations & Maintenance. A manufacturing base in Saudi Arabia

would also generate opportunities for manufacturers to address other markets in the GCC region

and in neighbouring countries.

Land is available at several strategic locations in the Kingdom, some of which offer special

incentives to investors. Utility costs are low. Skilled labour is accessible and Goverment funding

is available for workforce development. Industrial supply chains in the Kingdom are serviced by

many of world-leading providers. Investment funding is available from a number of Goverment

agencies.

Opportunity Overview

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Since 2000, SAGIA has been the central agency for inward investment into Saudi Arabia.SAGIAs mission is to help industrial and service organizations to access businessopportunities in the Kingdom which are aligned with Saudi Arabias objectives for growing anddiversifying its economy.

SAGIA is coordinating with other government entities to implement an integrated strategy forinvestor support. This strategy encompasses a range of investment opportunities in thetrading sector.

SAGIAs ambition is to work with investors across all stages of their journey in the Kingdom:from initial market entry to supporting their growth plans; to facilitating the development oftheir businesses and to work with them to manage their contribution to the Saudi economy.

SAGIA will facilitate introductions to co-investors, incentives providers and key stakeholders inthe Kingdom.

I look forward to supporting you in the Kingdom. It is my pleasure to invite to disc